It begins with some sobering facts about PR during the last economic slowdown. Full service firms faced 30% declines in revenues, while technology boutiques closed their doors for good. It makes me wonder about the current wave of technology boutiques. There are a handful of social media boutique shops around these days, and I wonder if a slow economic market will shut them down, or perhaps force them to amalgamate into the larger PR or marketing firms. On the other hand, perhaps they will do more business as companies look for innovative and affordable ways to engage their customers and stakeholders? I hope the latter is true, but the former seems more likely to me.

Edelman’s first two points especially ring true for me. Traditional marketing is becoming less effective every day.

His final point and example are good indicators of both Marketing and PR working in new ways to reach people. He references the Dove Campaign for Real Beauty, an Edelman affair, part of which (or related to?) is the Ogilvy “Dove Evolution” video, which was produced right here in Toronto. Both have a similar message, but with different tactics, and both have been very successful.

So check out the link, it’s an excellent read! Hat tip to Stephen Davies, who sent the link through Twitter.

In reality, I’m sure PR budgets would be cut a bit, or remain the same, hiring would slow down, all the usual impacts a recession has. But let’s take a look at some key practice areas of PR, and how I think they can play a pivotal role in a tight economy.

MarComm: I figured I would start here since this is such a common area of PR. If times are tight, I would advocate using public relations over marketing. You can accomplish a lot with a very small PR budget, through publicity, creativity and good relationships with your community. Traditional marketing can get costly, ad space doesn’t come cheap.

Investor Relations: If your stock is falling, or your business isn’t getting the returns it used to, the investors are going to want some serious reassurance. Investor relations should be a crucial facet of any business in a recession. If your ROI is coming back red, and your company remains silent, investors will be dropping out faster than Rudy Giuliani. If you employ some excellent IR, you can maintain their trust and hopefully keep them on board.

Internal Communications: I personally consider this to be the most important function of any company. Productivity and profit are directly linked to how engaged, enabled and happy the employees are. Nothing puts more strain on employee relations than a recession. Potential layoffs, salary increases and bonuses getting the axe, terms like “restructuring” being tossed around, it’s a time of high anxiety for everyone. A good internal communications plan can diffuse the tension, reassure doubts, or at the very least, keep people in the loop about what’s happening.

So there are three key areas PR can really aid a company when the chips are down. This is just my opinion, during the last recession of the early 90s I had a paper route, so I’m not speaking from experience. What do you think? If you have worked in PR through a recession, or just want to share your opinion, leave your two cents in the comments below. Thanks for reading!