Russian PR market volume in 2009: updated AKOS forecast

Actual results of first nine months of 2009 are slightly better than predicted; forecast for the whole 2009 is better than expected

Moscow, December 4^th, 2009. The Russian Communications Consultancies Association (ÀÊÎS) reveals updated forecast of PR market in Russia in 2009. After first nine months of the year, the Russian PR market size decreased by 24% compared to 2008, which is 4% better than previously expected (earlier this year a 28% decrease was expected). This information is based on AKOS experts' opinion and results of a survey conducted by AKOS during The Baltic PR Weekend — totally, on the evaluation of about 100 PR specialists and experts.

“The Russian PR market suffered from global financial crisis and slowed down after a very rapid development over the last few years”, Elena Fadeeva, Chairwoman of AKOS, General Director of Fleishman-Hillard Vanguard, said. “But in October-December 2009 we expect the market to continue the growth that we could see beginning in September. Thus, total market decrease in 2009 compared to 2008 will be 20%, which is a far more optimistic forecast than we gave earlier this year (28%)”.

Single PR practices show different dynamics of development. During first nine months, B2C PR budgets dropped by 24%, while B2B PR suffered under decline by 30%. Corporate communications budgets were reduced by 22%, financial communications — by 35%. Public affairs, crisis and internal communications fell down less dramatically — by 21%, 17% and 20% accordingly.

According to the research conducted by AKOS request in the beginning of 2009, Russian PR market size in 2008 reached $2.5 billion. Predictions for 2009 assumed 28% market size reduction to $1.8 billion. Now AKOS corrects the forecast positively and expect the year market size to reach $2 billion.

Total PR budgets reduction in 2009 was less dramatic than in other communications industries like advertising and marketing. The Russian Association of Communication Agencies reported 30% decline of advertisement volume in Russia during January-September 2009, compared to the same period in last year. Russian Association of Marketing Services estimated Russian marketing services drop during this period by 30% as well.

PR market achieved better results thanks to several Russian PR market trends that are also to see globally: increasing share of PR in marketing budgets, growth of PR B2C, corporate communications, crisis management (including CSR) and digital PR.

AKOS experts mention that budgets development differ not only from one PR practiñe to another, but also depending on the industry specifics. For example, PR budgets in pharmaceutical and IT sectors were stable or positive during 2009. In many cases, Governmental Relations budgets also show positive dynamics.

“New information presented by AKOS once again confirms that PR is one of the most efficient communications disciplines, and the value it can provide to business is highly appreciated even during crisis, while advertisement instruments show worth results. This allows Russian PR market to continue its successful development” — Elena Fadeeva mentioned.

John Saunders, past president of International Communications Companies Organization (ICCO), honorary member of PR Consultants Association Ireland, Fleishman-Hillard Regional President Continental Europe, Ireland & Eurasia, director of Fleishman-Hillard Ireland: “While advertising for so long has dominated marketing in the West, in the new Russia public relations and marketing were growing side by side. PR has been accepted more broadly at an earlier stage as a major discipline, than perhaps it was in the West. Also, international clients who come to Russia, recognize the value of public relations. As the consequence of both of these things, PR has done very well in Russia. But I believe that the best days of public relations in Russia are yet to arrive. It's clear that the whole industry is evolving at the phenomenal rate, so it comes as no great surprise for me that PR in Russia has been very robust during the economical downturn”.

Notes

* PR market volume — cumulative PR budgets in Russia, including implementation by both PR-agencies and in-home PR departments/press-offices. The number include all PR costs, among them PR professionals' and third-parties' expenditures necessary to implement the campaign, e.g. rent of premises for events, production of materials, etc.

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