Can PR Spending Predict a New Tech Bubble?


Earlier this week the San Francisco Chronicle published a sort of insider’s perspective on how the state of tech PR could reveal a pending Silicon Valley “bubble”—and they asked a couple of our favorite contacts to weigh in.

Tech’s venture capital take in 2013 was its highest since 2001, leading some unnamed observers to both wonder whether there’s a new bubble approaching and, if so, when it might burst. As white-hot industries begin their rapid fall back to earth, PR budgets are usually the first to get cut—so market experts look to the communications industry for clues regarding the health of Silicon Valley at large.

According to Christina Farr of Venture Beat, one important factor to note is how many big names take their operations in-house after “realiz[ing] that managing the press should be done the same way as their investors.”

Harrison Wise of Wise PR says the move toward in-house teams emphasizes the importance of “hard results”, implying that increased PR spending with an ever-greater focus on ROI simply means that the industry is growing more competitive (and healthier).

Ed Zitron of EZ-PR says that “Smart companies realize PR isn’t the golden goose”—it’s just one part of a working whole. As Farr’s quote indicates, changes in public relations budgets might just mean that the tech industry’s current incarnation is maturing and learning how best to spend all that capital.

As interesting as the article and quotes are, they don’t really tell us whether anyone’s predicting a bust to follow the current boom. We don’t see increased PR spending as evidence of a pending tech bubble—but we don’t live on the west coast or read every single Valleywag post either.

[h/t Dorothy Crenshaw]