Reading Frank Rich in the New York Times is my Sunday morning treat.   His opinion piece last Sunday was about cultural patterns of denial, arguing that we fool ourselves into refusing to face reality unless we hear warning signs over and over to accept “the wolf is actually at the door.”  These denials, of course, are not exclusive to the economy.  Mr. Rich states “Denial won’t fix the economy anymore than it won the war in Iraq.”

I’m afraid that our PR industry is gripped by the same impulse of denial as people  show about today’s economy.  The industry had it so good for so long, it’s hard for practitioners to imagine what is going to happen to PR budgets if the current recession becomes depression.  And that shouldn’t come as a surprise.  Some people still fondly recall those unforgettable messages on tech PR agencies’ answering machines: “Please only leave a message if your current or planned budget is over $40,000 per month…” In the late 90s, the fattest tech agency cash cows were quickly eaten by huge communications conglomerates and expected to generate the same revenue and margins year in and year out.  Actually, it was more like quarter after quarter, because now they had to meet Wall Street’s expectations in addition to satisfying clients.  This new blend of the street’s needs and clients’ needs may turn out to be about as toxic as derivatives and other instruments of mass destruction were to the financial sector.

While the PR industry seemed to have survived the tech bubble, I’m not sure that its habits and expectations changed that much.  Remember the key prerequisite needed to join a tech PR firm in the 90s?  Enthusiasm.  It sounds like a Reganesque requirement, but it all came from California where, to this day, its governor’s favored word is fantastic. The whole tech bubble era had a fantastic, out-of-the-world experience.

A lot is going to change if this economy gets worse. Today, survival is the common denominator behind every budget item review for every business.  Yet, the Publicis Groupe stated that “despite the ‘many challenges’ ahead, it remains ‘confident’ because of its ‘solid’ balance sheet and ‘flexible organization’,” according to MarketingWeek.  It reported a 1.1% drop in full-year net profit and predicted a “very difficult” 2009.  I’m not picking on Publicis, as other media holding companies have issued similar warnings.

Perhaps what the PR industry needs is the equivalent of Dr. Roubini, also known as Dr. Doom. We need an ice-cold analysis of where our industry came from, where we are, and where we’re going.  Right now, I’m afraid, we’re in a state of denial.  Let me know your thoughts.

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