Challenges and opportunities for corporate communication and public relations function

30 Jul

The Wadds Inc. Summer Annual - our mid-year report on corporate communication and public relations - raises an uncomfortable question about who is equipped to act on it.

My Grandad Fred turned up with a Summer Annual every year as school broke up for the holidays. It was always hardback and packed with cartoons, stories and puzzles. It signalled the start of the summer as much as buckets and spades, and the ice cream van.

Wadds Inc. has published its own Summer Annual this week. It’s a PDF and there are no cartoons or puzzles in it, but it does tell the story of the challenges and opportunities in management communication for the rest of the year across 20 pages of data. It’s my gift to you for your summer holiday.

The headline? Our function is becoming more important within management at exactly the moment that AI and underinvestment are eroding its future capability. It’s frustrating.

Download The state of corporate communications and public relations research report

In January I set out four management communication themes for 2026.

The function is becoming organisational sensemaking and risk management.
AI is a governance and legitimacy challenge rather than an adoption challenge.
Legacy media models are collapsing under behavioural reality.
Capability, culture and ethics have become performance constraints of the industry’s own making.

Here is how each one held up.

Theme 1. Sensemaking and risk management

Verdict: half right. The market made the case for the work. Building the expertise to claim it is a work in progress.

Ocean Tomo describes a 50-year inversion. Tangible assets were 83% of S&P 500 market value in 1975. By the end of 2025 they were 8%. The assets that dominate corporate value are the ones that our discipline exists to build and protect.

Echo Research attributes 28% of FTSE 350 market value, some £841 billion, to reputation. Beyond Communications, an independent study by CBI Economics commissioned by the PRCA, valued the UK sector at £7.1 billion in gross value added. The PRCA is led by Sarah Waddington, my wife, and Wadds Inc. is a PRCA member.

Here’s the issue. These studies measure reputation as an outcome. They do not explain the mechanisms through which perceptions are shaped, or the contribution of communications activity to them. That is the attribution gap at the heart of the reputation economy.

Deloitte’s The Road to 2030 records the same problem from inside the function. The share of leaders describing themselves as growth drivers has more than doubled since 2024, to 43%. 70% of those believe their CEO or board shares the view. Only 26% measure their work in economic terms.

You cannot claim to be a growth driver and then measure your value using media metrics. It just doesn’t make sense. Closing the gap between reputation valuation and communications evaluation is the defining measurement task of the next few years.

Theme 2. AI is a governance and legitimacy challenge

Verdict: confirmed.

CCOs at Europe’s largest companies produced the line of the year, so far, for me in the annual European Communication Monitor (ECM) report: “we are right in the foothills [of AI adoption]”. Use is cautious and fragmented, driven from the bottom up by super-users while senior leaders watch.

The 2026 Communication Management Radar maps emerging issues in management communication. Three of it five themes are AI-related.

Simulated communication: up to 60% of web traffic is machine-generated. You may be talking to a robot. This newsletter is all me.
Constrained AI agents: my co-editor of AI for PR (also highly recommended as a summer read) Ben Verinder, poses an important question - who is accountable when AI acts for an organisation?
Cognitive drift: sustained reliance on generative AI weakens critical thinking and judgement. AI is making us stupid.

The PRCA’s AI Green Paper positions human oversight as the overarching principle for responsible use. It’s a useful start point. Sarah Waddington is still my wife.

The Generative Engine Optimisation (GEO) evidence firmed up over the Spring despite Gartner’s hype. Muck Rack found that around 84% of AI citations come from earned media. No other discipline can claim that structural advantage.

AMEC published its GEO Principles in May, giving the industry an open measurement standard. At this stage GEO looks like a very safe bet.

Theme 3. Legacy models are collapsing

Verdict: confirmed, and it took less than six months.

The Reuters Institute’s Trends and Predictions report finds that publishers expect search traffic to fall by more than 40% over the next 3 years.

The data is brutal. Facebook referrals are down 43% in 30 months, X is down 46% and Google’s AI Overviews answer roughly 1 in 10 queries before a click happens. That number is almost certainly an underestimate.

Its Digital News Report recorded the crossover moment. For the first time, social media and video networks are the most widely used way of getting news online. They reach 54% of people against 51% for news organisations’ own sites and apps.

Creators now reach 46% of people with news. 82% of them say at least some of their stories start with a pitch, and 72% say most pitches are irrelevant. The opportunity belongs to those who work on the creators’ terms. I welcome fine wines, whisky and cash, thank you very much.

Theme 4. Capability, culture and ethics

Verdict: understated. This is the theme that got worse rather than better. I was much too cautious in January.

Let’s start with the ethics. In 2023, nine in ten practitioners told USC Annenberg that companies have a responsibility to advocate on social issues not directly relevant to the business. This year the figure is 55%.

C-suite social content since the November 2024 US election shows LGBTQ+ posts down 77%. The volume of corporate communication has not changed. The content has been rewritten in 3 years.

41% now agree that silence can be the best communication strategy, rising to 52% in-house. Sometimes that’s the case, but it’s also a convenient way to dodge a hard question.

ECM found AI increasing the value of experienced practitioners as their work shifts from production to judgement. A systematic review of 28 studies on the European public relations workforce found the mirror image. Entry-level and mid-level roles are being hollowed out. How do we develop the next generation of practitioners if the traditional entry route into practice disappears?

Here’s an irony: the EU AI Act’s literacy requirement becomes enforceable in August, at the moment the on-the-job path to that literacy is being automated away. Our report describes work that needs exactly the capability that the industry is eliminating. It’s frustrating isn’t it?

Download the Wadds Inc. Summer Annual

Work through these issues with me

I love my job and of my favourite things about it is running our one-day online Communication Management and Leadership course built on my PhD and the research behind this report. It treats communications as a management discipline covering sensemaking, governance, behavioural insight and organisational legitimacy.

The curriculum covers:

organisational sensemaking and business intelligence
geopolitics and risk
AI governance and the legitimacy deficit
GEO and AI-mediated visibility
behavioural publics
generational dynamics and leadership volatility
an operating model for the function in 2026

It is designed for senior in-house leaders, agency directors, independent practitioners and those moving into leadership roles. Cohorts are capped at 8 so everyone gets time to work on their own situation. £850+VAT. Use WADDSNEWSLETTER to get a £100 discount. Bookings are open for September, October and November.

Have a great summer. We’re taking a break until September.