Last Friday, Interpublic Group (IPG) – one of the ‘big four’ marketing groups, and owner of Weber Shandwick and GolinHarris – told PRWeek it had seen ‘single-digit organic growth’ in PR revenues for the final quarter 2008, despite an overall drop in its CMG division.
And earlier this week, Havas – owner of Biss Lancaster, Maitland and Cake – reported a 4.7 per cent growth in its overall revenues, although it did not break out PR specifically.
Elsewhere, analyst KBC Peel Hunt issued ‘buy’ advice for Chime shares, arguing that the market was undervaluing the UK’s biggest PR-based group (Bell Pottinger, Good Relations, Resonate).
PR revenues in the UK are likely to see a year-on-year drop during 2009, but this is far from Armageddon.
If we look more closely at the IPG figures, certain below-the-line spend has been hit globally. This is most notable in sports sponsorship, where experts suggest falling confidence in Formula One and a general suspicion of anything resembling a lavish event are taking their toll. Yet PR appears to be holding up, thanks to three factors.
First, owing to the recession, there is no shortage of corporate crisis work. Second, PR spend is still seen as cost-effective and often billed as a long-term retainer. Third (and this is a structural rather than cyclical trend) there has been an explosion of interest in marketing via digital social media.
KBC Peel Hunt concurs, pointing out that while PR spend is not yet counter-cyclical, it is often driven by factors other than economic conditions.
The biggest global marketing group WPP (including Hill & Knowlton and Burson-Marsteller) was due to report as PRWeek was going to press.
Nevertheless, one remains confident that seismic geopolitical changes and an accelerating digital revolution mean PR spend will resume its longer-term growth curve.