According to the latest Communications Industry Forecast by Veronis Suhler Stevenson, spending on PR will top $8 billion in the next three years, a 55 percent increase over 2008 expenditures. Part of this growth is attributed to the more complex and fragmented media landscape that has developed. 

"With a 24-hour news cycle, different outlets and formats including online, companies need more advice around PR than they did in the past," according to Jim Rutherfurd, EVP and managing director at VSS. "Businesses also continue to understand the value of having their message validated by a third party, even if they know they can't entirely control that message." 

In 2008, spend on PR and word of mouth increased by 7 percent - to $5.2 billion - versus the prior year. Much of the growth was in the nascent word of mouth and social media areas, while traditional PR grew at a rate of 4 percent - commendable given that many mediums saw an actual decrease over the same period. 

According to the forecast, advertising retracted by 11 percent. Advertising represented the smallest share of the four major communication segments in 2008, the first time that has happened since the study began in 1986. Companies spent $210 billion on advertising in 2008, behind $215 billion on "consumer end user" (videogames, newspaper and magazine subscriptions, etc.), $216 billion on "marketing services" (PR, direct marketing, etc.), and $241 billion on "institutional end user" (Internet and wireless, tradeshows, etc.). 

VSS found that while in 2009 the media and communications industry will endure its first spending decline since the 2001 recession, it is expected to rise from the fourth position to the third fastest-growing economic sector in the U.S. over the next five years, and also rise to become the fourth largest sector overall by 2013, up from the fifth largest sector in 2008. 

"While we have seen consumer media usage remain generally flat over the past year, the way in which consumers are spending their time continues to evolve. No longer are newspaper and magazine subscription purchases and network prime-time viewing the norm. Instead, they are declining and consumers are spending more time with media which they support and pay for as opposed to ad-supported media," said John Suhler, co-founder, president and general partner of VSS. "This development is a culmination of two decades of this secular shift towards consumer-controlled media, and shows no signs of slowing."