Last year was hideous for PR agencies, and 2003, while still tough, has shown that at least the industry has hit the bottom of the recession.
But as agencies crawl out of the bad times, there is a recognition that the decline brought with it permanent structural change to the agency business.
Big agencies suffered the greatest losses, with a 25% fall in income not uncommon in 2002. Many clients realised they could cut fees and in some cases get snappier service by switching accounts to the young, hungry shops that had emerged during the dotcom years.
This year, that trend has accelerated. Last year's Agency of the Year, The RED Consultancy, had another strong 12 months, picking up business from Disney, Marks & Spencer, Visit London and Universal Studios, among others.
Emerging shop Revolver won an account from Yahoo! and tightened its grip on the Unilever roster, with work for Knorr, PG Tips and meal-kit brand Rocket. Unilever is one of the bigger investors in small agencies; its Lever Faberge subsidiary appointed Brave PR in October to relaunch the Sunsilk brand.
Some of the big PR agencies have tried to recreate the best parts of small-agency culture and service. Hill & Knowlton launched a guerilla-style consumer agency, PiranhaKid, in 2001, which appears to be doing well. This year, Chime poached two directors of Shine Communications to create boutique consumer agency Resonate, and Fishburn Hedges, one of the few star performers in corporate PR in 2003, unveiled plans for its own consumer agency.
Many agencies report with optimism that they have formally lost few clients this year. However, in many cases that is because of a new trend in the PR agency world - the dormant account.
"Many of the big companies have reacted to the downturn by focusing their marketing support on their superbrands," says Lancaster.
"This has meant they simply stop spending on the second tier and so accounts take a 'fee holiday'. This has also happened where clients go through significant restructuring and do not want to initiate campaigns until things are settled."
Greater pressure on client budgets over the past two years has led to marketers putting ever-smaller pieces of business out to pitch to demonstrate to directors that they are getting the best value for money. They are also inviting more agencies to pitch and taking longer to decide on the winner.
All of this puts extra pressure on already-stretched agencies, which must make tough judgement calls on whether to take part in the contest.
"Whereas in the past it might have been a PR manager deciding on an appointment, this year we have seen far more procurement people getting involved in the process," says Alex Young, head of PR at the AAR. "This can extend the time it takes to make a decision, but should also make for a longer relationship."
But all the evidence points to the fact that the PR industry has passed the nadir of the slump.
Weber Shandwick chief executive Colin Byrne reports that his agency has seen an increase in actual business being put out to pitch in the past six months, as clients become more bullish about budgets for next year.
"A lot of those clients that drew in their horns over the past two years now want to get back into the market and see how agencies have changed in that time," he says.
Retainer fees have taken a hit since the middle of last year, as clients began to favour project-based relationships with agencies. But fees have started to re-emerge over the past six months, particularly in competitive sectors such as pharmaceuticals, financial services and food.
Among the scramble for new business have been some great examples of high-profile campaigns over the year. On the entertainment front, Taylor Herring performed a miracle turning around an initially dismissive public attitude to BBC's Fame Academy.
Outside of consumer work, Citigate Dewe Rogerson laboured for months aiding Morrisons in its quest to buy Safeway, while Penrose Financial was responsible for the City PR surrounding WPP's closely-fought battle to take over Cordiant.
Fishburn Hedges helped Ken Livingstone to an early victory for London's Congestion Charge and worked with the Department of Health on its 'Frank' drugs campaign.
Public sector PR was one of the bright spots of the industry this year, with increased government spending finally filtering through to communicating new initiatives.
Specialised public sector and corporate social responsibility agency Geronimo PR won £1.26m worth of business this year, including the Department for Work and Pensions' 'Age Positive' campaigns for Wales, Scotland and Northern Ireland.
Healthcare, one of the boom areas a couple of years ago, is emerging from a slow period. Of all industry sectors, pharmaceuticals is one that is particularly suited to global accounts and so is proving a welcome boost to the bigger, networked agencies.
Corporate PR is also starting to pick up again as directors have learned tough lessons about the fragility of corporate reputation. Scandals such as Enron and WorldCom have shown that reputations can be destroyed on a global basis in a matter of days.
But Fleishman-Hillard vice-president Simon Kleine believes that agencies in this sector will have to work hard to reassure clients that they have something of value to offer. "The legacy of the boom years is that clients are now cynical about what corporate PR can achieve," he says.
Fleishman picked up a big piece of European corporate strategy work for Cadbury-Schweppes in October, advising on the childhood obesity issue. In this sector at least, corporate PR is starting to be taken very seriously.