Monday, May 3

Analyzing Budgets: Public Relations And Communication

Despite the gloom and doom atmosphere of the public relations and communication industry, 57.5 percent of public relations/communication departments in the private and public sectors saw an increase or no change in their budgets last year. This year, 78.5 percent expect the same in 2010.

Those were among the findings of the Sixth Communication and Public Relations Generally Accepted Practices (GAP) Survey, published by the Strategic Communication & Public Relations Center at the University of Southern California. The study, and previous study, can be found here.

Characteristics Of Companies That Grew Public Relations/Communication

• They do not report to marketing, but directly to executive management.
• Most characterize their organizations as focused on long-term strategic planning.
• Budgetary spending is cautious, but neither frozen or reactive to the economic climate.
• Most indicate they have strong internal communication, with proactive people-driven environments.
• The increase in optimism for 2010 is tied to organizations that grew or expanded budgets during the recession.

Government agencies fared even better than the private sector. Almost 70 percent of government agencies were either not impacted or saw budget increases in 2009; 53.4 percent of nonprofit organizations saw no change or increased budgets.

Interestingly enough, government agencies and nonprofit organizations also allocate more of their total communication and public relations budget to staff. Most private sector companies allot approximately 42 percent of their budget to staff (except for the largest companies). Nonprofit organizations allot 55.3 percent to staff (and increased staff in 2009); government agencies allot as much as 56.8 percent to staff.

In general, only 23.2 percent reduced staff, within a modest .8 to 5.5 percent range. And among organizations that did make cuts, they typically scaled back work sent to outside agencies. In a previous study, companies reported allocating 26.6 percent of their budget to outside agencies. In 2009, only 15.4 percent was outsourced.

Organizations in the United States also fared better than international organizations. However, U.S.-based companies are less optimistic than their international counterparts. Smaller companies also tended to fare better and have more optimism.

The study helps pinpoint several conditions in public relations and communication last year. The numbers demonstrate why external agencies faced greater hardships. It also alludes to specific geographic areas in the United States that were harder hit, with their localized economies more reliant on short-term reactionary companies such as auto manufacturing, residential and commercial construction, tourism, and real estate.

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