PR's Role in a Recession

Evan Goldberg

Other than obsessing over the latest Kardashian scandal, questioning why “American Idol” is back on TV, and yearning for the New England Patriots to stop winning the Super Bowl, the vast majority of Americans don’t agree on too many issues these days.

There is, however, one other area of concurrence among a majority of us: a consensus that the next recession will occur sooner rather than later. Presently, more than half of all CFOs and half of all small business owners believe that a recession will begin this year. And the debate among “conservative” and “liberal” economists isn’t about if a recession will occur, but rather when.

Suffice to say, the 125-year-old public relations industry has survived many recessions. But it hasn’t done so without some bumps and bruises along the way. According to a study conducted by the USC School of Communication, 51 percent of PR agencies reported smaller client budgets while 20 percent were forced to decrease headcount during the Great Recession (December 2007 - September 2009).

Such statistics could be discerned as a worrisome precedent for the next recession; however, the PR industry actually fared well when compared to others. One reason the repercussions weren’t worse: recessions have been known to increase demand for PR about as much as they have facilitated contraction.

Using PR fearlessly

For companies of all sizes, there’s often, unfortunately, a knee-jerk reaction by the Board or C-Suite to scale back or eliminate PR initiatives out of recession speculation. This rationale from both a practical and emotional perspective is understandable. In fact, the inclination to protect cash amidst economic uncertainty isn’t just the sign of good leadership, but it’s essentially what one might think any fiscally responsible organization would do.

But history suggests that this predisposition to tighten the belt, especially as it relates to cutting PR, might be the wrong approach. In fact, recessions often represent the perfect time to invest more in PR services instead of retracting them.

One of the most prominent validators of this argument comes from Subaru, which not only bucked the trend of automotive sales declines during the last recession, but set the course for record-breaking sales in the years to come. Of all the losses incurred by car brands, how was Subaru the outlier?

An old Ad Week article interviewing then Subaru of America corporate communications director Michael McHale credits PR. According to Ad Week, “McHale attributed that (record sales) to the consistent message that the company puts forth from all facets of the company — ‘people love Subaru’ — and its efforts to tell its ‘good news story.’” He later added, “We’re a small company. It’s a reality of share of voice. In PR, we’re used to facilitating the news. Now we’re getting more used to making the news.”

Three ways to utilize your PR team during a recession

Aside from the obvious corporate communications and crisis communications benefits of PR during a recession, there’s precedent (beyond Subaru) to avoid immediate budget cuts to PR. While ultimately the Board or C-Suite may have the final budgetary decision, it’s up to us as marketers and PR practitioners to make the valid arguments for why continuing to invest in PR during a recession, or even increase spend, can actually benefit the company in the long-run. Here are three contentions to aid your conversations:

No better time to go on the offensive. Make no mistake, a majority of businesses will scale back or eliminate some, if not all, of their PR efforts prior to or during the next recession. This reality provides an incredible opportunity for brands to task their agency to go on the offensive while the competition has their guard down. If your company measures share of voice and notice competitors in stagnation or decline, there is a sound argument to be made that it’s time to push the PR engine beyond what’s currently the status quo and challenge the PR team to accelerate mindshare at a time when it’s there for the taking.

Do more, spend less. The laws of supply and demand tell us that the prices associated with PR activities are almost certain to decrease during a recession. So rather than reduce spending, look for savvy opportunities to invest in integrated PR campaigns that perhaps your company would not have previously considered. Whether via digital channels, brand journalism or sponsored content, there is no shortage of opportunities to extend brand reach, build trust and solidify perception without breaking the bank. Your agency partner should be able to help you discover the best opportunities under the circumstances.

Prioritize advocacy to prepare for a rebound. During a recession, it is prudent to revisit all PR goals and objectives because, based on your buyers’ ability to continue buying, you might need to change course. At a time when a consistent bombardment of sales messages might be viewed without favor, work to refocus the PR plan on brand identity, corporate citizenship, employee engagement and thought leadership. In doing so, you’re helping to indirectly build trust, reinforce credibility and booster perception so that when the recession reverses course, purchasing from your brand is top of mind.

There are several articles that talk about PR being a recession-proof industry. Such stories are self-serving at best and full of misinformation at worst. What’s factual, however, is that recessions can and have bred opportunity for PR so long as decision-makers can be convinced of the cost-benefits and risks-rewards.

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Evan Goldberg is senior vice president of client service at ARPR.