Global report forecasts PR growth, predicts changes
The annual Global Communications Report has been published.
Growth over the next 5 years
PR agency leaders predict agency business will grow from today’s global $14 billion to $19.3 billion, a 38% increase. They anticipate their headcount will increase by about 26%.
By comparison, corporate leaders expect budgets to increase by just 13.1% over the period, with an increase in headcount of 11%.
What specific services that will drive future growth? Agencies and client-side respondents expect increased demand for:
- content creation (81%)
- social media (75%),
- brand reputation (70%)
- measurement and evaluation (60%).
Change is coming
Only 27% of agency leaders believe that by the year 2020 the term “public relations” will clearly and adequately describe the work they do.
Current measurement models are still ‘alarmingly’ focused on measures of output—such as total reach or total impressions—rather than on business outcomes.
Agency and client-side respondents cite the following as their current forms of measurement:
- reach (68%)
- impressions (65%)
- content analysis (64%)
- brand perception (47%)
- attempts to measure return on investment (41%).
Social media measurement is ‘equally unsophisticated’. The most common metric reported by agency and client-side respondents is:
- a simple count of followers (78%)
- reach (77%)
- interactions such as likes or comments (76%).
The report notes that relatively few are tracking sentiment (62%); social listening, such as real-time monitoring on conversations (47%); or changes in opinion or action (36%).
As for the drivers of change, agency leaders see the adoption of new technologies (4.1 on a scale of 1 to 5) as the primary factor, followed by increased demand for content (4.0), the expansion of communications channels (3.8), increasing use of data and more demand for specialization (3.5). Corporate leaders also ranked the same areas as key drivers.
Reliance on agencies
The majority (55%) of client respondents expect their reliance on outside agencies to remain about the same over the next five years.
In what ‘may be a major shift’, PR agency leaders report that today 30% of the time they are reporting into the marketing division (21.8%) or brand management (9.6%) versus corporate communications (33.7%).
Client-side respondents cited the most important reason to bring in outside agencies are:
- strategic insight as (3.73 on a scale of 1 to 5)
- creative thinking (3.67).
Clients said top criteria for determining agency compensation are:
- strength of strategic counsel (4.05 on a scale of 1 to 5)
- quality of creative work (3.85)
Hours required to execute a program came lower (3.00), even though that is the billing model employed by most agencies.
Earned vs owned media
- 31.9% of the average corporate department’s media budget is being spent on earned media—the traditional focus for corporate communications.
- 32.1% is being spent on owned media, such as websites and blogs.
- 17% is being spent on paid media.
- 16.4% is being spent on shared media.
In-house respondents expect the shift away from earned media to continue over the next five years. They project that by 2020:
- 26.6% will be focused on earned channels
- 31.3% to owned media
- 22.8% - the biggest increase - going to shared
- 17.3% being spent on paid media.
In contrast, agencies report that more than 50% of their revenue is currently derived from earned media activities, followed by 20.5% from owned media, 17.2% from shared media and 9.3% from paid media.
Both agency and corporate executives agree that the ability to attract and retain the right talent is the greatest challenge preventing them from achieving their future goals.
But note that both are recruiting 'from the same ponds'. Despite changes in the communications landscape, PR agencies are most likely to recruit new talent from competitive agencies (3.69 on a scale of 1 to 5). Corporate communications departments continue to focus on other in-house departments as their primary source (3.53), followed by PR agencies (3.21) and news media (3.02). The report questions the wisdom of this.
Most important skills
Written communications is the skill ranked most important by client and agency respondents.
- Writing skills (89%)
- Strategic planning (84%)
- Social media expertise (76%)
- Multimedia content development (76%)
- Business literacy (62%)
- Analytics (62%)
- Research (48%)
- Search engine optimization (41%)
- Behavioral science (32%).
When asked what personal traits they felt were critical for the future, industry leaders said:
- teamwork (92%)
- hard work (82%)
They thought that both traits are already strong in their sector. But they wish applicants were stronger in:
- critical thinking
Global Communications Report is by the University of Southern California’s Center for Public Relations — in conjunction with the Holmes Report, the Institute for Public Relations, the Global Alliance for Public Relations and Communication Management, and others.
The 16-page executive report is at http://annenberg.usc.edu/sites/default/files/USC_REPORT_New.pdf