Spending on PR isn’t falling

Washington Mutual may spend less on public relations this year, but the facts are that long-term trend is of investing more in PR. That’s why we disagree with Duncan Brown’s un-evidenced statement that PR is falling in importance.

Spending on public relations and marketing has continued to increase in recent years, even in the tech sector. Spending on public relations in Britain, for example, has risen by one third since the year 2000. This might not change, even during recession: During the recession of 1991, spending on public relations increased, while spending on advertising decreased.

Generally, we think that’s wise. Research at Harvard Business School shows that firms that maintain their sales and marketing spend during a recession are the ones that grow best. What we might see is a shift between the proportion of PR staff that are in-house or agency side. PR agencies can suffer in recessions because more PR staff are hired in-house. However, public relations agencies grew employment in the past year by focusing on healthcare and government work.

Of course, recession means shifting tactics. Spending needs to be pushed out from the centre and towards support of national subsiduaries and business units that are driving sales. PR, AR and advertising are all getting aligned more directly to sales. Specialist public relations activities, like influencer relations and blogger relations, are also growing – but generally not at the expence of other marketing disciplines.

Seth’s post, which Duncan uses as a source, doesn’t argue that PR is falling in importance, or suggest any trend at all. He names some brands which didn’t spend hundreds of thousands of dollars on launching but which got their PR after launching. What he does argue is that great publicity is a gift, but not something firms should chase.Of course other’s don’t take such a dim view of PR spending, including Bill Gates, who famously said “If I was down to my last dollar, I’d spend it on public relations”.

Duncan Chapple

Duncan Chapple is the preeminent consultant on optimising international analyst relations and the value created by analyst firms. As the head of CCgroup's analyst relations team, Chapple directs programs that increase the value of relationships with industry analysts and sourcing advisors.

There are 4 comments on this post
  1. Duncan Brown
    October 02, 2008, 11:49 am

    Hi Duncan. A couple of responses to your post.

    1. I don’t use Seth Godin as a source, but as a prompt. I thought my words “Seth reminds me” might have made that clear.

    2. I didn’t say that spend on PR is falling. However, since you cite IDC, IDC’s figures for PR in the tech sector are thus: In 2007 PR spend was 7.1% of marketing spend. In 2008 IDC expects this to fall to 6.3%.

    3. The point of my post isn’t that spend was rising or falling. I haven’t met a marketing director in the past 5 years that thought PR gave his firm a strategic advantage. PR is necessary, they tell me, but it’s not sufficient. So my point is that PR is increasingly commoditised, and so PR firms and technology vendors need to do something different. Targeting influencers is an effective strategy in optimising PR, and other marketing activities.

  2. October 02, 2008, 2:30 pm

    Hi Duncan,

    Thanks for the reply. I think my issues are these:

    First, both you and Seth (and me and everyone else) continues to be frustrated with weak execution and impact from public relations. But that does not mean that PR is falling in influence. There’s real effort to align all communications activities more closely with stakeholders interests. However, there’s just nothing to suggest that PR is falling in importance: these are old frustrations and the long-term trend remains an increase in the investment in public relations. IDC’s forecasts for tech PR spending are not the most over-laboured, and the real figures always differ (as we saw with Blackfriars, who used a similar methodology which was also over-volatile).

    Second, I think colleagues at influencer50 need to be careful to not be the little boy who cried “Wolf!”, and to not suggest that PR, AR, marketing and other imperfect things are in decline when they are, generally, not.


  3. October 06, 2008, 3:59 pm

    One more thought about this: IDC’s data are based on 80 responses. In the current context, which is one in which the overall IT marketing budget continues to grow, a marginal decline in the percentage spent on PR could still a marginal increase in the spend on PR. Furthermore if we are right in our observation that spending will shift cost-effectively in-house and away from agencies, then total effort could be stable, or even increasing, even in the TI sector.

  4. October 12, 2011, 5:52 pm

    […] That’s unheard of by most technology company CEOs.  Bill Gates is also rumored to have stated “If I was down to my last dollar, I’d spend it on public relations.”  If the two […]