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 Pets.com, 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.