Sorry, couldn’t resist that headline. I don’t mean it though.
However, if you’ve read at least one newspaper or listened to/watched at least one news bulletin this month you’re probably aware that the UK economy is heading for a downturn. Some are saying a recession while others are believe it’s more of a slow down; depending on where their vested interests lie, of course.
One thing’s for sure though, the UK has enjoyed excellent economic growth over the last ten years. Unemployment is at an all time low; London is the financial capital of the world; property prices have risen (a ridiculous) 190% and the banks are were willing to give the public cheap credit willy nilly.
Just to touch on house prices a second: The Express newspaper’s journalism quality/integrity has been shocking. Here are a few of their headlines from the last few weeks:
28th December 2007 Daily Express headline HOUSE PRICES FALL AGAIN
29th December 2007 Daily Express headline HOUSE PRICES RISING AGAIN
1st January 2008 Daily Express headline HOUSE PRICES PREDICTED TO FALL
9th January 2008 Daily Express headline HOUSE PRICES UP 5.2%
Friday 11th January 2008 Daily Express headline HOUSE PRICES NOW SET TO ROCKET IN 2008
Obviously a few things have happened recently. We’ve had our first run on a bank in over a hundred years and now none of them are lending to one another. The British tax payer has had to pick up the £24bn Northern Wreck bill and will be doing so for years to come. The many Americans who were given sub-prime mortgages have since defaulted causing financial firms like Citigroup, the world’s biggest bank (I believe) to write off billions of dollars due to the fiasco and like the dollar, the pound is weakening.
Only just yesterday the global stock markets were at their worst performance since 9/11.
There’s a saying I’ve heard mentioned a couple of times which goes something like “if the US has a cough the UK usually catches a cold.” We’ve certainly got a tickly throat.
It’s little wonder that incidents like these have started to trickle down to the PR industry? Here are a few posts/articles I’ve read lately:
Tim Dyson – Next Fifteen
Will McInnes – Nixon McInnes (Will isn’t strictly PR but he’s a digital/social media guy so still relevant)
Stephen Waddington – Rainier PR
Peter Chadlington (in a letter to PR Week) – Huntsworth Group
Whether or not these factors will have an impact on the PR industry remains to be seen but I believe the online/digital PR sector will remain sturdy throughout any economic downturn. Other sectors might not. As proved, online PR is becoming increasingly important to both PR people and their clients so 2008 should prove to be the year when a bigger slice of the (potentially decreasing) budget is allocated to the online arena.
However, as I mentioned in a tweet last month, social media activity in 2008 will demand more measurement and results. Why? As Ben Ayers said in his response “businesses will demand it”
Stephen is a communications consultant based out of the UK. You can connect with him on Twitter or check out his LinkedIn profile. | Email Stephen
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Drew B
The Express isn’t the most innovative of papers when it comes to variety of its headlines. Every other day it’s “Diana’s inquest…”
Rodger D. Johnson
It’s your PR mate across the pond, here. I didn’t know the Motherland was in such economic straits, akin to the pain we’re feeling in America.
I don’t see PR taking a hit from a sluggish economy in America, either. As communication manager for three, Indiana-based wealth management firms, we have been taking a proactive approach to PR, assuring our clients that the markets and their money will survive. We’ve also taken the opportunity to communicate this same message to the media, distributing news releases discussing strategies folk can weather a slowing economy.
The bottom line, however, is that recessions are part of the economic cycle. We should be capitalizing on the situation. Excellent post, by the way.
Alastair McKenzie
No long term memories here then?
I think we KNOW what happens in a recession – the finance directors take over and start looking for budgets to trim. They always concentrate on areas where the cost/return is not mathematically clear to them. EG instead of NOT investing in that machine tool, they choose to NOT invest in that PR campaign.
Furthermore accountants are instinctively drawn (like Harry Potter’s dementors) towards the areas of advertising, marketing, PR they least understand.
So, with or without the social media results & measurements you mention, online/digital PR will the first to suffer the inevitable cutbacks.
Greg Brooks
I don’t know if the comparison would carry over to the UK, but here in the U.S. my company has avoided recessionary cycles by doing a significant portion of our business with the public sector.
Governments only rarely (and that would be “rare” as in “perhaps during depressions”) actually shrink, so it’s a steady-growth industry during belt-tightening times. And some portions of the bureaucracy (workforce development agencies in the U.S. come to mind) automatically grow their budgets during tight times.
There are other counter-recessionary plays in a tightening economy, certainly. But none quite so large as the government.