K Street Cafe

Now that the first two months of the new year are behind us, I thought K Street Café readers would be interested in some articles on the outlook for the Public Relations, Advertising and Public Affairs industry in 2010. Some of the articles survey the PR or advertising industry nationwide, while others are focused on the DC market specifically. All the articles are helpful for understanding the state of affairs for the specific corner of the world we operate in.

Public Affairs Council – 2009 Corporate Government Relations Washington Office Benchmarking Report

Key Points:

• Despite the economic downturn, companies are finding a presence in Washington critical — and are maintaining their staffing and budget levels.

• The Washington office, rather than being exclusively devoted to government relations, is now taking on additional functions.

• Washington offices are beginning to use more sophisticated performance measurement.

The Economist – Public relations in the recession: Good News

“According to data from Veronis Suhler Stevenson (VSS), a private-equity firm, spending on public relations in America grew by more than 4% in 2008 and nearly 3% in 2009 to $3.7 billion. That is remarkable when compared with other forms of marketing. Spending on advertising contracted by nearly 3% in 2008 and by 8% in the past year. PR’s position looks even rosier when word-of-mouth marketing, which includes services that PR firms often manage, such as outreach to bloggers, is included. Spending on such things increased by more than 10% in 2009.”

PR Week – Year End Survey by Stevens Gould Pincus on 2010 Outlook for PR Industry

The majority of PR agencies saw revenue declines in 2009, according to a year-end survey by StevensGouldPincus (SGP). Of the 157 agencies polled, 63.7% reported revenue declines from the prior year. They also reported an average 11.6% profit margin, a drop from last year’s figure of 19.2%

Despite the results, firms remain optimistic for the upcoming year. Sixty-four percent of agencies said they expect higher revenues in 2010, a prediction that Gould believes will come true.

Advertising Age – Ad Spending Heads Into Tepid Recovery

By most accounts, this recession is over, but advertising is likely to see only a modest recovery. Interpublic Group of Cos.’ Magna forecasts that media firms’ U.S. ad revenue will be lower in 2015 than in 2000.