The Global Economy and Public Relations: Impact and Outlook

On February 14, a group of senior corporate and agency PR executives came together, under the sponsorship of PRWeek and MSLGroup, to discuss a number of issues that had also been on the agenda of the World Economic Forum at Davos.  One of the top questions:  quantifying the impact of the global economy on the communications industry across key regions of the world.

Not surprisingly, we concurred that — in our industry — the impact of the economy has been a very mixed bag. 

A week ago, I surveyed my colleagues at IPREX , an independent global communications network with over 100 offices and 1,500 staff worldwide.  Roughly half of the respondents were from North America; the remainder were European.  I asked them whether and what kind of growth they had experienced over the past two years.

Their answers varied wildly from country to country and city to city.  One respondent reported revenues that increased 44%; another confessed to a decline of 20% between 2011 and 2012.  Many reported that the economy had “no discernible impact” on their business.

Veronis Suhler Stevenson (http://media.prsa.org/pr-by-the-number/), a leading private investment firm, is bullish on our industry.  They’ve predicted that annual U.S. spending on combined public relations and word of mouth marketing services will increase at a compound annual growth rate of 14% between 2010 and 2015, to $10.96 billion.  (Of course, not everyone agrees.)

There’s one unassailable fact:  the fate of our firms is closely linked to the health of our clients.  The IMF estimates that the world economy will grow about 3.5% this year, just slightly better than last year's 3.2%.  Of course, that improvement will be uneven from region to region.

According to PwC’s 16th Annual Global CEO Survey, when it comes to the economy, CEOs are definitely not relaxing.  In fact, they’re worrying more — and have more to worry about — than ever before … including economic and policy threats well outside their direct control.  Of all the threats that concern CEOs, social unrest is the most worrisome by a significant margin.

Burying your head in the sand is not an option.  Working with experienced and capable communications experts is essential for maintaining dynamism while minimizing potential risks.