Holmes Report Global 250
World Report | Trends & Attitudes

TRENDS & ATTITUDES

Optimism Rebounds As Marketers Spend More On PR

By Holmes Report

14.07.2014

- Marketers increase PR budgets
- Digital and social media upturn 
- Corporate reputation and responsibility less important

- Talent remains perennial concern

Public relations agency leaders from around the world are generally bullish on the outlook for their business, expressing greater optimism about the growth of the PR market in general and about their own agencies’ profitability.

That optimism appears to stem from a belief that marketers are increasing the share of their budget allocated to public relations, and are increasingly willing to turn to public relations firms for non-traditional services, including digital and social media work—offsetting some concerns about the importance of corporate reputation and corporate responsibility.

Optimism levels rebounded from last year’s survey, with agency principals averaging a 7.69 (on a scale of one to 10) when asked whether they were optimistic about the future of public relations in their market (up from 7.50 in 2013) and a 7.60 (up from 7.38) when asked whether they expected profits to increase this year.

Optimism

The research—conducted by The Holmes Report and the International Communications Consultancies Organisation (ICCO) among more than 500 PR agency principals as part of the World PR Report—found a continuing gap between the Americas and Europe when it comes to optimism: Latin American agency principals were the most optimistic (8.71), followed by those in North America (8.46) and Asia (8.35). But Eastern Europeans (6.89) and Western Europeans (7.28) were considerably less confident about the future, with firms in the UK (7.83) somewhere in the middle of the two extremes.

The optimism level of Western European firms was actually an improvement over 2013, when it was just 6.70, but Eastern Europe suffered a sharp decline, down from 7.31—the only region where agency leaders were more pessimistic than the year before.

“Agency leaders were more optimistic all around the world as markets rebound and social media force companies to engage with their stakeholders in a more meaningful way,” said Paul Holmes, publisher/CEO of The Holmes Report. “The only exception is Eastern Europe, where PR firms are not feeling the benefit of the recovery.”

Globally, agencies were increasingly convinced that marketers are increasing their spending on PR relative to other disciplines (6.19, up from 5.63 the previous year). Agencies in the Asia (6.56), the UK (6.53) and North America (6.51) were the most likely to see such an increase, while Eastern European agencies were the least likely (5.48).

Marketing Spend

Another major difference between Europe and the rest of the world is the willingness of clients to turn to PR firms for “non-traditional” services such as corporate advertising, digital services, and word-of-mouth. Western European firms were the least likely to see this kind of diversification (6.65), although Australian agencies seem to be stuck in a similar rut (6.67) compared to their peers in North America (7.49) and Latin America (7.71).

Non traditional Service

But if agency principals are more optimistic when it comes to marketing budgets, they were less likely to see corporate reputation being prioritized. When asked if CEOs in their market were taking corporate reputation seriously, the average score was 7.35, down from 7.54 last year. When asked whether clients were taking corporate responsibility more seriously, the average score was 6.76, down from 6.88.

Corporate reputation was seen as a big issue in North America (8.20) but is being taken least seriously in Eastern Europe (6.52). CSR is a significant priority in Latin America (7.94) but again lags in Eastern Europe (6.14).

"Optimism is clearly the watchword for this year's World PR Report — and as we head further out of the downturn, there are some clues here as to what holds the best opportunities for the industry," added ICCO chief executive Francis Ingham. "Non-traditional services continue to grow as a client draw, and while corporate reputation services seem to have waned a little, let's not forget that they still remain important for over 70% of agencies around the world."

Globally, the perennial concern about talent intensified, with agency heads less confident (6.01, compared to 6.13 in 2013) that there was “a plentiful supply of intelligent, well-educated talent” in their market. The concern was greatest in Eastern Europe (5.40) and in the UK (5.77).

Talent

“In some ways, that number is the most worrying for Eastern Europe,” said Holmes. “In the past, we have seen the greatest concern about talent in markets where the PR business is flourishing—where the demand for good people is outstripping supply. The fact that Eastern European agencies are struggling to find talent suggests a deeper malaise. The PR industry in the region has not convinced either potential clients or potential employees of its value."

TOMORROW: Which sectors and practices are growing, and where are PR firms are investing?

Holmes Report logo
&
ICCO logo
 
Capstone Hill Logo