Revenue among members of the Council of Public Relations Firms increased by 4 percent in 2003, following two years of steep decline.

A new report found revenues rebounding, and considerable optimism about the future, with 50 percent of member firms indicating that they expected their clients’ 2004 budgets to increase; while another 40 percent expected budgets to remain the same.

Following on the heels of last week’s GAP (Generally Accepted Practices) study from the University of Southern California’s Annenberg School—which found PR spending by America’s leading corporations had declined by 5.5 percent in 2003—the Council data suggests either that member firms outperformed the industry as a whole or that the data are in some way unrepresentative (perhaps because the largest PR firms no longer provide revenue numbers).

Still, the bullishness among responding members indicates that PR may have turned the corner at the end of 2003.

“Clients are discovering that there are many cost-effective alternatives to paid advertising, such as event marketing and guerilla marketing; those activities can be defined as public relations,” said Lauren Rich Fine, a managing director and equity analyst at Merrill Lynch who analyzes the publishing and advertising industries. “The good PR firms know how to break through the clutter to deliver the right message to the right audience.”

Participating firms were asked to list their top three internal practice areas by percent of the firm’s total revenue. Overall, consumer marketing, corporate communications and business-to-business communications were most frequently cited. Crisis and issue management, media relations and employee communications are also part of the mix for many firms.

“Most client prospects are aware of the value of public relations for product promotion and corporate communications; they may not be aware of the role of public relations in business-to-business or employee communications,” according to Lou Capozzi, Council chair and chief executive of Manning Selvage & Lee.

The firms were also asked about the industry sectors they represent.

“Historically technology and healthcare companies accounted for the greatest percent of public relations spending,” says Council president Kathy Cripps. “But other industries such as retail consumer products, professional services and industrial products are also increasing spending.