Most agencies surveyed recently by the Council of Public Relations Firms are predicting slower growth than in the past few years, a period that in some ways has been a boom time for a marketing function that hasn't always gotten a lot of respect. Far from a doom-and-gloom outlook, the survey shows that both agency hiring and increased interest from corporations is moving apace. Nevertheless, most of the 62 agencies queried are looking at this year's economy with some trepidation.
Eighty-four percent project growth of 8% to 10% in 2008. In 2007, average growth was 12.3%. In 2006, it was 13.9%. And the council's figures aren't the only indicator that growth is slowing. Investment bank Veronis Suhler Stevenson is forecasting growth of 9.9%.
As you'd expect, the head of the trade group put a positive spin on the numbers. "We're building on a great year, and as you get bigger, it's harder to keep achieving a bigger increase in percentage," said Kathy Cripps, president of the council. "The growth is also backed by the amount of hiring agencies are doing, which was greater than last year, and growth in areas like health care, consumer and technology."
'Issues with the economy'
Another council exec had a different take. "I thought that number might even come in lower because of a lot of uncertainty about the economy," said VP Matt Shaw. "I was surprised they were as optimistic as they were. But there are issues with the economy and a lot of people talking about recession, and you can't ignore that."
Forecasting aside, Andy Polansky, president of Weber Shandwick, said: "Our major clients haven't indicated any pullback with budgets. In fact, some are increasing their spend in areas such as [corporate social responsibility]." And a number of major brands are issuing RFPs, he added.
Like many business sectors, PR bottomed out in 2002. But "we've had a good run over these five years, and from the CMO on down, people have a better understanding of the benefit of PR," said Ray Kotcher, CEO of Ketchum and chair of the council. "And as marketers look to maximize their ROI, the price point of PR and the job it does within the marketing mix is becoming very much appreciated."