Posted At: March 23, 2009 12:39 PM
By Julie Brown
Money is the ensurer of success. Businesses either rise or fall in the presence or absence of money. To succeed in any business sector, your industry has to be in demand. During the country’s hard economic times, the advertising and public relations industries have been experiencing a downturn in capital, but which industry is fairing better during these hard economic times?
In 2008, the media sector, comprised of newspapers, magazines, radio, television, advertising and marketing firms, laid off 65,100 people. The only sector that appears to have increased is Internet media companies, which encountered a growth of 7 percent, due in part to easy access of news and increased online advertising options.
Advertising agencies are experiencing a downturn in revenues like most media businesses. Clients are cutting back due to smaller fiscal year budgets, but some are finding alternative outlets to advertise. Most clients are leaning toward online and digital media outlets for reaching out to the public. Television advertisements are also becoming an option to the dying newspaper and radio outlets. However, cutting out advertising all together can be costly for future business.
The University of Southern California issued a report on The Impact of the Current Economic Situation on Public Relations/Communications, which surveyed 200 senior-level staff members from various organizations. Their study showed that in the coming year, half of the firms will implement smaller budgets, 20 percent of the firms will experience some staff layoff and 56 percent expect salary freezes. These numbers may seem alarming, but most industries are experiencing these same numbers.
Some professionals are encouraging the use of public relations during the recession. Connections with publics through online media outlets can create a better relationship with people at a lower cost. Large companies such as Home Depot, Ford and Burger King have utilized social media sites such as Twitter to connect with target publics on a more personal level. Professional blogs are also becoming the trend with large corporations to update investors and consumers on the company’s actions.
“Public relations is doing well in this economy because it provides even greater value and a third party “halo effect” through endorsement by non-paid media and others,” said Keith Burton, president of Insidedge, GolinHarris’ global communications group. “With the new social and digital media, leveraging these communities and channels may be even more cost effective than with traditional PR programs because of the reach and perceived credibility of men and women who populate these new media.”
Firms like Ogilvy have created online tools for companies to utilize during this economy. Topics like “Turning Shoppers Into Buyers,” “Improving Sales Performance” and “Optimizing Production and Creative” offer alternative solutions to costly public relations ventures.
In these economic times, it is best to always be on the target audiences’ mind. With online outlets booming due to easy access, public relations seems like the best option. Increasing and maintaining relationships will ensure a company’s success for years to come. A company should always stay in contact with investors and customers to inform them about how they are coping with the economic times.
“What I have encouraged clients to do is to continue investing at appropriate levels to distinguish their brands right now,” Burton said. “That’s critical to maintain brand awareness in a difficult economy.”
Whether a company is featured on the Fortune 500 list or is located on Main Street USA, hard times in the economy affect everyone. The bright side is that recessions are normal in the economic cycle. Public relations has proven to be a vital asset to any organization while easing budget strain.