USC’s PR Industry Study: Recession Was Not Crushing, Expect Modest Increase for 2010

After the financial meltdown in late 2008 hit, we heard a lot of survival stories from agency heads, ranging from “down 40%,” “took care of redundancy,” “we kept our clients by reducing retainers,” to “we’re not firing anyone”.

“Flat is the new up” was the cliche and the goal.

In Part One of USC Annenberg Strategic Communication and Public Relations Center (SCPRC) Professor Jerry Swerling‘s latest Public Relations Generally Accepted Practices (GAP) Study released this week, it appears 2009 wasn’t as bad as once thought, and that 2010 will end up ok.

“GAP VI” found that 42.5% of respondents reported a decrease in PR budgets, averaging 5.3 less money than the year before. While 28.8% expect increases this year, the average amount is just 1.56%, signaling widespread caution. According to Swerling, the industry should be happy that there will be increases at all, and that “from a historical perspective, it appears that we have weathered the recession far better than previous recessions.”

While not apocalyptic, GAP VI reveals the hurt on agencies. The ratio of revenue to PR spend remained nearly the same from 2007 to 2009 (.07 to .08%), and internal staff actually increased at 61.6% of companies surveyed. However, the percentage of the budget on outside agencies dropped from 30% to 20%.

The SCPRC’s Economic Impact Survey press release and findings presentation can be found here.

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