As we near the end of this very difficult year for communications companies of all stripes, let’s take solace in an industry first. Public relations has outperformed advertising in this recession, according to William Blair analyst, Meggan Friedman. In fact, this trend began before the recession of 2008-09. She told my executive committee last week in Chicago that, “increase in advertising spend has exceeded growth in GDP on an historical basis but not since year 2000. There is clearly a move of advertising dollars to digital and marketing services such as public relations.”

Let’s be honest—the average large PR firm has declined in revenue between 8-10% this year. This reflects companies reduced communications budgets; the impact of procurement officers on hourly rates; and the clients’ desire to preserve internal staff and contract more project/less retainer work. The financial results reported by the large holding companies, such as Omnicom and Interpublic, reflect revenue drops of 14-17%, with the ad agency subsidiaries such as McCann Erickson or Ogilvy down 15% or more. Ad agencies such as JWT are reinventing themselves by staging events for clients like DeBeers, filming couples kissing in a famous location, then posting the smooches online (sounds like PR to me).

So why am I optimistic amid the gloom? Here are ten good reasons to pop the cork on a decent bottle of bubbly:

1) We are attracting the best and the brightest—PR looks a lot better when media jobs are evaporating and investment banking hours exceed 80 per week. Young people are being given real responsibility, particularly in digital units. The bottom is on top now and for good reason.

2) The chief communications officer is at the table in the C suite, in every troubled sector, from automotive to banking to insurance. Policy is being formulated based on advice from the CCO—we are no longer just sent out to deflect and defend.

3) The business is officially global—more companies are looking for communications support from Jakarta to Mumbai, from Abu Dhabi to Moscow, premised on genuine level of stakeholder engagement, transparency, accountability and public leadership.

4) The budgets available to PR firms now include digital, HR, legal, government affairs plus PR.

5) Government is more fully involved in business than at any time since the Great Depression. Note the UK Government’s decision this week to tax investment bankers’ bonuses over UK £40,000 at 50% and Japan’s $81 stimulus investment, or the continued large government stakes in auto, financial and insurance concerns. Companies need assistance in making the case that societal and shareholder objectives are being met equally.

6) The devolution of mainstream media means that companies must engage an ever increasing number of new media in order to reach mass audience. We can do this more effectively than other forms of communications, with speed and accuracy.

7) Every company can be a media company, so said Andrew Heyward, former president of CBS News. How right he has proven to be. From BabyCenter.com to British Airways Metrotwin.com, companies are offering their unique expertise to the community and asking the community for personal experiences that enrich knowledge and content.

8) Employees are the new credible source for companies. The best practice today is inside out communications, informing the employees first, providing them with material that can be sent along to friends and family. They dominate the horizontal or peer-to-peer conversational axis that goes along with the vertical axis of authority or “talk to” mode.

9) The mantra for consumers is immediate justification, not immediate gratification. They seek broader purpose and a way to participate in their causes through their purchases—with brands that have a tie-in with cause, a relationship with a brand.

10) Advertising firms have lost their long-held primacy as the leading communications discipline. Companies and organizations are now actively seeking opportunities to fund any initiative, firm, channel that achieves its business outcome, and no longer simply default to advertising.

PR people, this is not the time for gloating or glib commentary (the amateurish advice offered through the media to the beleaguered Mr. Woods). We need to demonstrate superior results, an intelligent point of view premised on intellectual capital and creativity in linking client objective to societal goals.

'We are no longer just sent out to deflect and defend.'

Probably the most important shift in how we are viewed and utilized in my experience. We're depended upon to identify, support and participate in communities, not just thrown in later when 'it' gets angry. Excellent post and great news.

Great list here Richard.

I would be very interested to see a post from you about what trends/strategies/etc. you imagine for 2010. What do you think is in store for PR? How will our industry change throughout the year? How will the journalism industry alter the way we as professionals operate and draw attention for our clients? Any vision about how social media will be different in one month, six months, one year?

You noted how various social media tactics are being tapped by companies across all industries. It will be important as PR professionals to continually set new trends and develop effective uses for social media. Although other companies have done a terrific job implementing social media campaigns, our industry must take the lead here and continually ask ourselves how we can advance our ability for communication innovation - as budgets constrain, the need for sizable ROI will be in higher demand.