Fortune 500s Limit PR Spending When Economy is Healthy
A study which goes against the grain of other market research which has shown that PR budgets are growing concludes that 60 percent of about 97 companies reported that their PR budgets remained unchanged or declined in 1998.
The report, released last week by Nichol & Co., is based on a 21 percent response rate among 459 public companies queried about their PR budgets. Participating companies included 3Com, Airborne Freight, Bear Stearns, Bell Atlantic, CVS Corp., Dell Computer, Freddie Mac, IBM, Johnson Controls, Giant Food, Monsanto, Motorola and Owens-Corning.
Findings show:
- 40 percent spent between $500,000 and $2 million annually for internal and external expenditures;
- 37 percent spent 20 percent or under on external PR;
- 31 percent have a PR staff of one to five employees;
- 37 percent consider PR "to be very important" and
- 98 percent have corporate Web sites.
"Our interviews with PR executives in 1998 indicate that most companies' PR budgets are determined by corporate priorities, not the economy or profits," says Nichol & Co. President Betsy Nichol. "Y2K projects, technological efficiency, a cost-consciousness and 'why spend more money when things are good' attitude were reasons PR budgets were stagnant at corporations."
(N&C, 212/889-6401)