While marketing budgets tend to be one of the first items targeted in cost-cutting efforts, public relations (PR) services are often seen as better value for money than media advertising
Melbourne, Australia (PRWEB) January 24, 2015
Mixed economic conditions in the past five years have not affected the Public Relations Services industry in the same way as traditional advertising. According to IBISWorld industry analyst Alen Allday, “while marketing budgets tend to be one of the first items targeted in cost-cutting efforts, public relations (PR) services are often seen as more focused and therefore better value for money than media advertising.” As a result, spending on PR tends to be less volatile and holds up better when budgets are cut. Additionally, some aspects of PR, such as communication with stakeholders, can be crucial in a downturn to allay fears and manage crises. This, along with a longer term trend towards more below-the-line marketing methods, is expected to result in industry revenue growing at a stronger rate than that of the Advertising Agencies industry over the five years through 2014-15. In 2014-15, industry revenue is forecast to increase by 4.1% to total $496.6 million. With steady demand over most of the past five years, industry revenue is estimated to increase at an annualised 5.2%. Industry profit has also increased at a steady rate in the past five years due to strong demand.
PR activities are becoming more diverse due to media fragmentation, with new media opening up a broader range of communication channels to reach target audiences. “The internet and social media have presented marketers with a new opportunity to target specific audiences,” says Allday. The ease with which marketers can contribute to content, and attempt to sway public opinion and reach stakeholders, has resulted in an increase in the use of online PR activities. The rise of PR and the convergence between some aspects of PR and advertising have resulted in many mergers between PR firms and advertising agencies in the past decade. This trend is expected to continue over the next five years as the industry becomes more globalised.
IBISWorld estimates that the Public Relations Services industry has a low concentration level. Historically the industry had been highly fragmented, with a large number of small agencies, often operating as partnerships and family companies. Industry consolidation began in the 1990s as major global advertising firms began aggressively acquiring complementary marketing and communications businesses including PR firms. Many of the larger PR firms operating in Australia are now part of international firms that were swallowed up by the likes of advertising giants WPP and Omnicom.
For more information, visit IBISWorld’s Public Relations Services industry in Australia report page.
Public relations agencies manage the communications between an organisation and its publics in order to promote favourable relationships and portray a desired image. This includes communication with the general public as well as employees, investors, customers, analysts and other stakeholders. In contrast to advertising, PR campaigns aim for exposure through public interest and news items rather than paid advertisements in order to give their message third-party legitimacy.
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