There was an interesting topic brought up on Inside PR this week, and it’s something I’ve been thinking about for a while, especially while watching my mutual funds tank. The R word, recession. With all the talk of a potential recession on the horizon, how does this affect Public Relations? Personally, I think in Canada we will experience some economic slowdown, but I think we’re in much better shape than our neighbours to the south. I’m not exactly a financial expert, so don’t make investment choices based on this blog, but if I were running a business I would put more money in PR during a recession.
In reality, I’m sure PR budgets would be cut a bit, or remain the same, hiring would slow down, all the usual impacts a recession has. But let’s take a look at some key practice areas of PR, and how I think they can play a pivotal role in a tight economy.
MarComm: I figured I would start here since this is such a common area of PR. If times are tight, I would advocate using public relations over marketing. You can accomplish a lot with a very small PR budget, through publicity, creativity and good relationships with your community. Traditional marketing can get costly, ad space doesn’t come cheap.
Investor Relations: If your stock is falling, or your business isn’t getting the returns it used to, the investors are going to want some serious reassurance. Investor relations should be a crucial facet of any business in a recession. If your ROI is coming back red, and your company remains silent, investors will be dropping out faster than Rudy Giuliani. If you employ some excellent IR, you can maintain their trust and hopefully keep them on board.
Internal Communications: I personally consider this to be the most important function of any company. Productivity and profit are directly linked to how engaged, enabled and happy the employees are. Nothing puts more strain on employee relations than a recession. Potential layoffs, salary increases and bonuses getting the axe, terms like “restructuring” being tossed around, it’s a time of high anxiety for everyone. A good internal communications plan can diffuse the tension, reassure doubts, or at the very least, keep people in the loop about what’s happening.
So there are three key areas PR can really aid a company when the chips are down. This is just my opinion, during the last recession of the early 90s I had a paper route, so I’m not speaking from experience. What do you think? If you have worked in PR through a recession, or just want to share your opinion, leave your two cents in the comments below. Thanks for reading!
Hey Tom, interesting analysis. Thanks for continuing the conversation…
Ter
By: Terry Fallis on February 4, 2008
at 11:39 pm
Did you see this post by Josh Bernoff on the Forrester Groundswell blog, Tom?
Why Social Applications Will Thrive In A Recession
by Josh Bernoff
Interesting concept that I’ve been talking about to a few people (including staff from the Canadian Public Relations Society and the Canadian Marketing Association), i.e., the idea that a recession might be a great time to “sell” the idea of more investment of resources (staff time, if not money) into social media.
The reason we were having the discussion is because I’m doing a webcast of a (work-related) conference keynote, Economic Update 2008 (with an economist from RBC) later this month. Derek Holt and I were discussing whether or not the US (and, specifically, Canada) is likely to go into a recession (Derek termed it “entertaining the ‘R’ word,” which was used in the public webcast announcement), and if either country did, what impact it might have on PR/marcomm agencies and their clients (particularly if the clients are multinationals or US-based). Or in-house PR folks, too, when much of the company’s products or services are sold to American customers.
As you said, recessions can mean opportunities, in addition to challenges.
By: Judy Gombita on February 7, 2008
at 12:30 pm
Hi Judy, thanks for the great comment!
I hadn’t read Josh Bernoff’s post, but I checked it out on your recommendation. It’s a good read, a more thorough analysis of the situation.
I especially aprpeciated his points about measurement. In a recession, programs that can’t demonstrate a solid ROI may be the first things cut by upper management. If a social media plan is concretely demonstrating value there’s no reason it shouldn’t continue.
You’re right about staff time as well. Social media plans don’t necessarily need substantial budgets, just people dedicated to working with it.
Adversity should be a breeding ground for innovation, not convention. Thanks again Judy.
By: TomToronto on February 7, 2008
at 2:19 pm
Agreed. I was also saying to my (blogwriteforceos) pal, Debbie Weil, that a recession might be a perfect time for an organization to launch a CEO blog. I can’t think of a better opportunity for an organization’s leader to try to humanize a company then during a recession…i.e., how the recession is impacting not only the business, but its customers and employees. What innovations an organization is doing to counteract the effects and speed up the upturn process. Perhaps ask for feedback from constituents on what the company could try to do better.
You’re welcome for the link. And I was delighted to see you registered for our (free) February 21st webcast. Cheers, Judy
By: Judy Gombita on February 7, 2008
at 4:31 pm