Public Relations Industry

Public Relations Industry

Business is booming for the public-relations (PR) industry on both sides of the Atlantic; the top 30 agencies saw increases of around 17% in the US and by 10.5% in the UK in 2006 compared with 2005.

PR's own reputation has emerged from the shadows as the industry itself has become more professional. It is increasingly being seen as the guardian of both brand and corporate reputation, especially in an environment that is becoming more fragmented across a very diverse number of media platforms.

The very nature of this diversity is adding to the strength of the PR industry, as the astonishing growth of social community sites, citizen journalism and, most of all, `the blogosphere' (the weblogging environment) provide a hotbed of opinion in which reputation can rapidly be consumed. Only PR can hope to interact at the deep levels needed to influence online opinion. It is here that practitioners have told Key Note that PR needs to develop its talents, and also where most caution is required.

In these days of increased globalisation, corporate reputation is at the top of everyone's `shopping list'. It is in this discipline that the industry has seen most growth and expects to see continuing growth in the future. In terms of vertical markets, healthcare has been identified by several of the industry spokespeople Key Note consulted for this report as the fastest-growing sector; however, the public sector (particularly in the light of the new Labour leadership), the environment and corporate social responsibility (CSR) are all emerging as growth areas for PR.

The overriding concern of the industry is the skills shortage. Almost all agencies are hiring, a trend that is itself indicative of growth, and some are looking outside the PR industry to bring in new skills.

In the past, there has been a relatively clear distinction between PR and other marketing disciplines, but this is changing. The giant marketing communications companies, such as WPP and Omnicom, have always numbered PR and communications agencies among their holdings. These are now rising to greater prominence within the groups, although not yet rivalling the mighty advertising agency networks that occupy pride of place.

Nonetheless, the number of newcomers to the scene is growing, mainly through acquisitions, largely in the PR field. Companies such as Huntsworth and Chime, and the world-leading Edelman, which are PR centred, are able to compete with the WPP and Omnicom networks on a global scale in order to manage clients' corporate and brand reputations.

Even these companies have rivals; other service groups are also taking an interest in the PR market. 2006 saw strategic acquisitions made by a leading global financial consultancy and by leading information-services companies. PR is becoming `hot'. It is also becoming global.

Although there are many thousands of small agencies and individual consultants serving very local markets, larger agencies are forging partnerships across the globe to meet demand from clients that themselves are extending their global reach. Yet it is not enough to simply market goods and services in individual territories: there must be a deeper understanding of those cultures for PR to be effective.

The issue of how to measure the effectiveness of PR continues to be raised by practitioners, who need to demonstrate value for money to their clients. Market-research companies can measure attitudes but, as has been noted in previous editions of this report, that research comes at a cost that many clients are not willing to pay. The challenge has been taken up by those in the support sector, which offer more than simple news clippings or news-distribution services. Technology has advanced to allow them to provide automated services, which can present clients with detailed reports of not just coverage and tone but also comparisons with competitor coverage.

1. Introduction
REPORT FOCUS
DEFINITION

2. Strategic Overview
BACKGROUND
Qualifications
MARKET DYNAMICS AND SEGMENTATION
Market Sectors
Trade Associations
Association of Media Evaluation Companies
British Association of Communicators in Business
Chartered Institute of Public Relations
Council of Public Relations Firms
Fédération Internationale des Bureaux d'Extraits de Presse
Healthcare Communications Association
International Communications Consultancy Organisation
International Public Relations Association
Public Relations Consultants Association
UK Media Monitoring Association
Marketing
Total Industry Value and Growth
DISTRIBUTION
Table 1: Top 20 Public Relations Consultancies Located Outside of London by Fee Income† (£), Years Ending 31st December 2005 and 2006
COMPETITIVE STRUCTURE
Omnicom Group Inc (US)
WPP Group PLC (UK)
Interpublic Group (US)
Publicis Groupe (France)
Havas Group (France)
Huntsworth PLC (UK)
Financial & Corporate Communications
Public Affairs
Public Relations
Healthcare
Chime Communications PLC (UK)
INDUSTRY ISSUES
Skills Shortage and Staffing Issues
Online PR
Search-Engine Optimisation
Agency/Client Relations
1. ``PR Takes The Lead
2. ``Keeping The Magic Alive
3. ``It No Longer Does What It Says On The Tin
A Marketing Perspective
Environmental Issues
THE CONSUMER
``Tip 1: Focus On A Clear Theme
``Tip 2: Create A Catchy Headline
``Tip 3: Format Your Press Release Correctly
``Tip 4: How To Write Your Press Release
MARKET FORECASTS
Table 2: Average of Independent Forecasts for Gross Domestic Product Growth in Real Terms, Inflation by Consumer Price Indices and Retail Price Index, and Claimant Unemployment (% and million), 2007-2011
Table 3: The Forecast UK PR Industry† by Value at Current Prices (£bn), 2007-2011

3. Public Relations Consultancies
BACKGROUND
MARKET SIZE
Table 4: The UK Market for Public Relations by Top Four Marketing Communications Groups and Independents (£m), Years Ending 31st December 2005 and 2006
Profitability
Table 5: Top 30 UK Public Relations Consultancies' Joint Profitability (£000 and %), Previous and Latest Results
COMPETITOR ACTIVITY
AGENCY LEAGUE TABLES
Table 6: The PRWeek Top 20 Consultancies by Fee Income† (£), Years Ending 31st December 2005 and 2006
Table 7: The PRWeek Top Ten Consumer Agencies by Fee Income (£), Years Ending 31st December 2005 and 2006
Table 8: The PRWeek Top Ten Healthcare Consumer Agencies by Fee Income (£ and % of total income), Year Ending 31st December 2006
Table 9: The PRWeek Top Ten Financial Consultancies by Number of Deals and Total Value (number and £bn), 1st October 2005-30th September 2006
PUBLIC RELATIONS EXPENDITURE TRENDS
MARKETING ACTIVITY
Industry Awards
The Public Relations Consultants Association FrontLine Awards
Chartered Institute of Public Relations Excellence Awards
Communicators in Business Communications Excellence Awards
PRWeek Awards
Gold Awards
People & Agencies
Corporate & Public
Product & Promotion
Specialist & Technique
CONSUMER BEHAVIOUR
Top Tips for Client Meetings

4. Public Relations Support Services
BACKGROUND
MARKET SIZE
SUPPORT SERVICES BY SECTOR
Media Monitoring and Evaluation
Expanded Services
Fees
Competitive Structure
Cision UK Ltd (formerly Romeike)
Durrants Ltd
Precise Media Group
TNS Media Intelligence/PressWatch Media Ltd
Others
News-Release Distribution
Glide Technologies Ltd
Gorkana Data Systems Ltd
SUPPORT SERVICES AWARDS
CONSUMER BEHAVIOUR
Table 10: The Most Important Research Methods for Journalists (%), April 2007
Table 11: Journalists' Usage of Blogs and Wikis (%), April 2007
Table 12: Proportion of Press Releases Received of Genuine Interest (% of journalists), April 2007
Table 13: Factors That Would Make Journalists Likely to Read a Press Release, April 2007
Corporate Rankings
Table 14: UK Top 20 Companies by Overall Mentions and Score, 2005 and 2006
Table 15: UK Bottom Ten Companies by Overall Mentions and Score, 2005 and 2006

5. The Blogosphere
BACKGROUND
What's Hot?
MARKET SIZE
Most Linked-To Sites
1. Engadget
2. Boing Boing: A Directory of Wonderful Things
3. Gizmodo, the Gadget Guide
4. TechCrunch
5. Breaking News and Opinion on The Huffington Post
6. Lifehacker, the Productivity and Software Guide
7. Ars Technica
8. Daily Kos: State of the Nation
9. PostSecret
10. TMZ.com
Most Favourite Sites
1. Boing Boing: A Directory of Wonderful Things
2. Make Money Online Problogger Blog Tips
3. Techcrunch
4. Lifehacker, the Productivity and Software Guide
5. 43 Folders
PRACTITIONER VIEWS OF INTERACTIVE CUSTOMER COMMUNICATIONS
COMPETITOR PROFILES
Technorati Inc
Del.icio.us
Digg Inc

6. An International Perspective
MARKET DEVELOPMENT in CHINA
``Mainland China: A Maze of Contradictions
The Chinese Media Landscape
``Newspapers
``Business Papers
``Television
``China Central Television www.cctv. com.cn/default.shtml
``Portal Websites
``Baidu
``Sina
``Netease
``Sohu
``Tom
``Eastday
``Other Media Entities
MARKET SECTOR GROWTH
Table 16: Best and Worst Growth Prospects by Line of Business by Number of Mentions, 2006
Table 17: Best and Worst Growth Prospects by Industry Sector by Number of Mentions, 2006
COMPETITOR ENVIRONMENT
Table 18: Top Ten US Independent Firms by Fee Income and Number of Employees ($), 31st December 2006
Table 19: Predicted Assessment of 2007 Local Market Conditions by ICCO Member Country
Consumer Behaviour
Table 20: Posts by Language (% of blogs measured), as at Fourth Quarter 2006

7. PEST Analysis
POLITICAL FACTORS
ECONOMIC FACTORS
SOCIAL FACTORS
TECHNOLOGICAL FACTORS

8. Industry Dynamics
INDUSTRY RESEARCH
Interviewees
Suzanne Peck, Chairman, British Association of Communicators in Business
Nick Fulford, Managing Director, CanCan
Adrian Brady, Managing Director, Eulogy! Ltd
Ross Furlong, Furlong PR Ltd
Charles Lewington OBE, Founder, Hanover Communications
Bill MacIntyre, Co-Founder, IrisPR
Patrick Barrows, Director General, Public Relations Consultants Association
George Blizzard, Co-Founder, The PR Network
Questions and Answers
1. ``What Are the Three Most Important Issues Facing the Industry Today?``
2. ``Which Vertical Sectors Have Shown the Strongest Growth in the Last Year? (Health? Environment? Political? Some Other?) And Why?``
3. ``Which PR Discipline is Growing Fastest?``
4. ``What Progress Has Been Made in Online PR in the Past 12 Months? What Are its Strengths and Weaknesses?``
5. ``Are Clients Now Allocating Greater Percentages of their Marketing Budgets to PR?``
6. ``What Headway is PR Making as Far as Influencing Client Company Strategies Is Concerned?``
7. ``Biggest Challenge for the Future?``

9. Company Profiles
INTRODUCTION
HUNTSWORTH PLC
Corporate Information
Strengths and Weaknesses
New Product/Brand Development
Innovations
New Research
Appointments
Profitability
Table 21: Financial Results for Huntsworth PLC (£m), Years Ending 31st December 2004-2006
Future Company Developments
CHIME COMMUNICATIONS PLC
Corporate Information
Strengths and Weaknesses
New Product/Brand Development
Innovations
New Research
Appointments
Profitability
Table 22: Financial Results for Chime Communications PLC — Public Relations Division (£m), Years Ending 31st December 2005 and 2006
Future Company Developments
EDELMAN INC
Corporate Information
Strengths and Weaknesses
New Product/Brand Development
Innovations
New Research
Appointments
Profitability
Future Company Developments
FTI CONSULTING INC
Corporate Information
Strengths and Weaknesses
Financial Communications
Brand Communications
Public Affairs and Crisis & Issues Management
Business Consulting
New Product/Brand Development
Innovations
New Research
Appointments
Profitability
Future Company Developments

10. The Future
MARKET GROWTH
Table 23: Practice Areas Where Most Growth is Expected Over `The Next Few Years' (% of respondents), June 2007
Table 24: Sectors Where Most Growth is Expected Over `The Next Few Years' (% of respondents), June 2007
MARKET ForecastS
Table 25: The Forecast UK PR Industry† by Value at Current Prices (£bn), 2007-2011

11. Glossary

12. Consumer Confidence
METHODOLOGY
KEY FINDINGS THIS QUARTER
THE WILLINGNESS TO BORROW
Confidence Improves
Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007
Willingness to Borrow Slips Slightly
Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), February 2006-2007
SPENDING FROM SAVINGS
Slight Increase in Spending from Savings
Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007
Saving Grows in Relative Importance
Table D: The Average Amounts Adults Are Confident Spending to Purchase Expensive Items (£ and %), February 2006-2007

13. Further Sources
Associations
Publications
Government Sources
Other Sources
Bisnode Sources