Anyone who skims the headlines knows that most of the world is challenged by an economy that’s losing its steam. It’s been that way for almost a year and the timing of an upturn is indeterminate, most likely not until well into next year.

The impact on public relations has been interesting – somewhat different from the dozen or so recessions Burson-Marsteller has weathered in its 55-year existence.  Invariably, public relations/ communications budgets and cuts in staff were the first manifestation of rough economic goings in times past.

With the exception of the financial services and real estate/development sectors, that hasn’t happened with this recession.  Of the several public relations firms with which I have discussed the subject, none has suffered reduced fee income or profits. In fact, at the current rate of activity, 2008 promises to be the best year for agencies since 2001/2002 –when the high tech bubble burst. 

There seem to be several reasons for this new paradigm in the economics of public relations – over and above the intangible supposition that CEOs really believe reputation is a company’s most important asset.

The oncoming of the digital era is, I believe, the most significant factor underpinning the corporate commitment to maintain public relations budgets at present levels despite recession talk.   Digital is still a “work in process” for most clients and their agencies.   As an information dissemination vehicle, it has established itself; as an advertising vehicle, much remains to be learned on how best to use it. 

Experimentation is taking place on how to deliver messages that are most persuasive in influencing listeners/viewers to buy one product or service over another. Clearly, the conventional full page newspaper ad or magazine spread won’t work in the new digital environment nor will the age-old dependable 30-second commercial.

Digital media present alternatives, some of the most effective at a relatively low cost. Clients and their public relations firms are deep into identifying what works – very definitely, one style doesn’t fit every foot.  It’s a race no marketer can ignore – and at a time when the nature and ownership of digital content is still to be defined, public relations firms have proved to be both innovative and nimble navigating this fast-moving milieu.

A second reason is that marketers are more likely to recognize that public relations support can be effective in winning new customers and keeping those who have committed to a specific product or service.   The increased use of research on how consumers make purchasing decisions has renewed interest in what we old-timers call product publicity.

A third reason for the sustained use of public relations even as the business momentum slows is that there is no longer a single unified economy for the global corporation.  Even in the U.S., the economy varies by industry and by geography; the Midwest has been hard hit because of the loss of auto industry jobs while Silicon Valley, Texas and the southeast generally have had little adverse impact.   Although now showing signs of a slowdown, both Europe and Asia have produced excellent profits for global corporations.

This is not to say that public relations/communications offers a guaranteed safe employment haven in a falling economy. But we can take some comfort in that we no longer seem to be a leading indicator for an economic recession.