INTERNATIONAL: Research shows American budgets in sharp decline

NEW YORK: American PR budgets plummeted by 39 per cent last year, despite cautiously positive predictions from the industry, according to the PRWeek/Biz360 Corporate Survey 2003.

Figures from the study show the average PR budget among the 1,273 corporations polled fell to £1,440,865.

Moreover, PR budget as a percentage of total revenue also dropped from 0.14 per cent last year to 0.08 per cent this year.

Despite the budget cutbacks, many communicators are also failing to use one of the few powerful weapons available: measurement.

Barely half - 53 per cent - of the executives questioned had a measurement budget, and of those that did, only 59 per cent have those metrics requested by the executive suite.

Biz360 chief executive You Mon Tsang directly equated the budget drop with the lack of measurement: '(Corporate communicators) can't really prove their effect on the organisation. If you talk to a sales person, he can come right back and say, "If you cut five heads out of my department, this is what's going to happen", and show you figures and proof right there.'

Of the measurement tools used, press clippings were by far the most popular - measured for both quality and quantity.

Predictably, the tech sector saw the hardest budget declines, with a 61 per cent drop, while healthcare and consumer also fell by 35 per cent and 46 per cent, respectively.

The non-profit sector was the only area to see a budget increase, with a 100 per cent rise.

There is an increase, however, in the number of companies looking to hire external support - from 54 per last year to 58 per cent in 2003.

But the budget cuts highlight the trend that many firms are eschewing expensive, retainer-based relationships in favour of hiring on a project basis.

The survey reveals that public affairs and government relations are hot growth areas, with 23 per cent of communicators expecting to increase budgets in those sectors by more than ten per cent this year.

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