Monday, March 26, 2007

Public Relations Rises from Ashes of "Dot-Com Bust"

While most people will remember the dot-com bust for the demise of technology and e-commerce companies like, one of the sectors that suffered most dramatically was public relations. Perhaps nowhere was this felt greater than at agencies that had ramped up their technology practices to handle the accounts of the many new e-marketplaces and promising new business and consumer products.

The resulting bust that followed in 2001 was painful across the board, but especially at small and mid-size agencies that didn't have a large enough account base to weather the storm that resulted in the loss of many technology accounts. In some cases, small and mid-size agencies had a technology practice in name only for a good period of time following the dot-com bust.

While the "good old days" of $30K budgets across the board, combined with the almost limitless optimism that accompanied them still may seem in ways like a distant reality, recent statistics show that public relations has indeed recovered nicely and is competing well with advertising for a company's overall marketing dollar. As chronicled in a new story in Adweek, after hitting a bottom in January 2004, employment in the overall marketing sector has grown 12 percent. What's more, since 1990, employment in public relations has grown 44 percent, compared to advertising's overall 14 percent. So overall, while PR remains a very volatile sector save for a few very well-established names that have secured the business of multinational corporations, things for the industry as a whole are definitely on the rise.

Not only does this point to an increasing economic influence of public relations, but it hopefully will also bring about a coalescence around best practices and standards that will keep the next inevitable downward business cycle from business as painful as the "dot-com bust." Unfortunately, PR agencies can in many ways blame themselves for that; sure, it's not like we told people that selling pet food over the Internet would be a billion-dollar business, but we did in many ways promise more than we could deliver to get business in what was at the time a fiercely-competitive race to win the next hot company.

Hopefully, the industry's growth will make major players realize that we don't have to do that anymore. Instead, we should see the value in giving better, more objective counsel that will not only help viable companies prosper, but will keep agencies from banking their futures on companies that we can all sense aren't likely to pan out.

Monday, March 19, 2007

Public Relations Industry Continues to Suffer From a Leadership Vacuum

It seems as if the Public Relations Society of America can't even get out of its own way these days. For those who haven't been following the issue, over the past year, the organization has faced a deluge of criticism, both from PR pros themselves, as well as from industry observers. One of the many complaints centers around the fact that, while PR continues to suffer a bad reputation, the organization never really comes out swinging in its defense, nor does it avoid getting into PR flaps of its own on many occasions.

One of the biggest thorns in the side of PRSA has been newsletter publisher Jack O'Dwyer. O'Dwyer has criticized many of the organization's decisions, including the fact that the organization hasn't operated transparently in quite some time and generally avoids answering any questions publicly about the way it operates. There were high hopes that this would change with the arrival of a new president and chief operating officer, Bill Murray. However, if anything, the first few weeks of Murray's tenure has been as rocky as his predecessor's.

In an internal letter addressed to the organization's leaders that was leaked to O'Dwyer and others, Murray takes on O'Dwyer, calling his editorials on the PRSA "inaccurate." He goes on to label O'Dwyer's coverage of the organization as containing stories that are "unsubstantiated," "misleading" and "erroneous," yet does not give any examples. He also refutes O'Dwyer's contentions that the organization's finances are anything but healthy, although separate analyses conducted by independent college professors maintain that the organization doesn't fully report its expenses, including rent for its Manhattan headquarters and costs associated with the annual PRSA conference.

O'Dwyer goes on to criticize the organization for ceasing the publication of its annual printed membership directory, in factor of an online only directory -- a decision that was said to have been done to hold down costs, yet raised the ire of many members.

All this comes as the organization lost two key executives last week, both with long tenures. Communications chief Cedric Bess left after five years and CFO John Colletti left after six.

The most baffling thing about the PRSA has always been the way it responds in a time of crisis. One would think an organization of PR leaders would know how to respond in such situations, but rather than keeping cool and on point, the PRSA seems always and only to attack the messenger, as if to say they're above reproach and the only reasons anyone attacks them or one of their positions is they just can't understand.

Let's hope at some point the PR profession can get an organization that will understand the battles those of us in the trenches face every day, in terms of the impact the profession's poor reputation has on everyone. What the industry needs more than ever is not an organization that's not always on the defensive, but one that will take stances that will actually advance the profession's standing and will enhance its reputation.