It’s that time of year again: PR budgets for 2012 are in the planning stages, and with the economy still stagnant, many communications pros are configuring not only where their dollars will be spent, but also refiguring where their dollars will come from.
But, according to Art Stevens, managing partner at StevensGouldPincus, a communications merger and management consulting firm, organizations are in a quandary. “Blue-chip companies are making cuts like never before, and are running without new personnel,” he says. “They feel that there’s a sword over their heads—they want to tell good stories about themselves, through CSR, for example. But it’s tough to do that when you’re downsizing.”
Which means communications pros may be up in the air with how they will spend—or whether they will get—their money to tell those stories. What does Stevens see out in the field? Contrary to all the brouhaha about digital PR and social networks, media relations is probably the most sought-after function in terms of PR agencies, says Stevens. “Media relations budgets remain strong, despite the fact that many PR pundits believe that execs are budgeting less for it and moving those dollars to social media,” he says.
Stevens has noted a couple of other trends: Event spending has plateaued, while public affairs budgets within corporations are going up. “Companies are reaching out to constituencies to achieve community goals in connection with corporate goals,” says Stevens.
In B2B, some companies—particularly within the financial sector—are cutting back their PR budgets because they want to go “underground” due to poor public opinion.
In other sectors, Stevens sees pharmaceutical PR budgets flattening, while consumer-based companies are going strong. “In all areas that continue to rise, consumer is by far on top,” he says.
All in all, 2011 has been a pretty good year thus far for budget spend, as witnessed by a PR agency surge in profits. Agencies, Stevens says, have “rebounded nicely,” and he has the data to back that up: the StevensGouldPincus Best Practices Benchmarking report, which finds operating profits returning to the 2008 rate of 15.6% (see 07/11/2011 PRN “Agency Watch” for details).
One Stevens prediction that may affect organizations’ budgeting for agencies: greater consolidation in the PR agency industry in 2012.
“More of the big firms—and there are not that many left—will pick off agencies with $10 million to $20 million per year in fees,” says Stevens. “The majors are looking to make some acquisitions, and we’ll see fewer, larger, independent agencies.”
So what is Stevens’ prediction for what will be “in” in 2012? “Ambiguity,” he says.
To see what’s in and what’s out in 2012 budgets among your peers, see the accompanying table.
CONTACT:
Art Stevens, [email protected]; Patricia Reilly, [email protected]; Tom Buckmaster, [email protected]; Eileen McComb, [email protected]; Helene Solomon, [email protected].