PR agencies attack Bellwether report for painting gloomy picture

PR bosses say the picture of declining comms budgets is at odds with their experience.

'Not struggling': Burson-Marsteller CEO Matt Carter
'Not struggling': Burson-Marsteller CEO Matt Carter

PR agency bosses have dismissed suggestions that the industry is falling behind other marketing disciplines.

The quarterly Bellwether Report, which measures client marketing spend, painted a gloomy picture of the PR industry in the first few months of 2011.

The report, which covers the first quarter of 2011, found that the 'all other' category, which includes PR, experienced a negative net balance in budgets of 11.2 per cent - making it the worst hit of any marketing discipline. The overall figure for all marketing budgets during the first quarter was a downward revision of 5.1 per cent.

However, several PR leaders brushed off the findings, suggesting that the report is contrary to the true picture in the industry.

Matt Carter, CEO of Burson-Marsteller, rubbished claims that PR was among the worst hit marketing disciplines: 'While the UK economy is still struggling, in our experience PR is certainly not.'

Ketchum Pleon president David Gallagher said the report contradicted what he was hearing from colleagues in the agency world. He said his own agency had 'just finished one of our strongest quarters ever'.

Avril Lee, CEO of Ketchum Pleon London, added the consultancy had experienced 'strong growth' in the first quarter. 'This has come from a wide range of clients and has been both from organic and new business opportunities,' she said. 'On a macroeconomic level, the past few years have been marked by volatility to be sure, but with our business experiencing consistent year-over-year growth and such a strong start to 2011, we're optimistic about the prospects for PR.'

The Bellwether Report also came under fire from PRCA chief executive Francis Ingham, who said the findings bore 'absolutely no relation to the PR market as we see it'.

Comparing the report with the PRCA's own benchmarking data and PR Leaders' Panel, Ingham said: 'We are utterly certain that Bellwether is wrong.'

But Chris Williamson, author of the Bellwether Report, said: 'It is a much broader survey and to say it is "wrong" is misinterpreting the survey.'

The Bellwether Report also revealed that overall marketing budgets were revised down for the second consecutive quarter as public sector cuts hit the industry.

HOW I SEE IT

David Gallagher, Senior partner/president, Ketchum Pleon

The Bellwether findings are inconsistent with what I'm hearing from other agencies and clients, and entirely different from our outlook at Ketchum. We just finished one of our strongest quarters and see little to be gloomy about for the rest of the year.

Francis Ingham, Chief executive, PRCA

Year after year, Bellwether either presents itself, or allows itself to be presented, as an expert PR commentator, but its continued insistence on lumping PR into the 'all other' section of its analysis means it has little if anything of interest to say about PR.

-11.2% - Net balance in budgets for 'all other', including PR

-5.1% - Overall figure for all marketing budgets In the first quarter

39% - Proportion of respondents planning to increase spending in 2011

22% - Proportion of respondents that foresee a decline in spend in 2011*

*Source: IPA/BDO Bellwether report

BELLWETHER REPORT MARKETING BUDGETS IN Q1 (% net balance)

Total -5.1%
Media 1.1%
Sales promotion -6.8%
Direct marketing -1.8%
All other (including PR) -11.2%
Internet 9.3%
Internet search 4.3%

Source: IPA/BDO Bellwether report

BACKGROUND

Figures from March 2011 suggest that the advertising sector has bounced back from recession more strongly than PR.

Last week, WPP announced annual results for 2010 that revealed like-for-like growth of 3.7 per cent - to £845m - for the group's PR and public affairs revenues. This was the slowest-growing of its four business groups and significantly behind the 7.1 per cent growth in media and advertising.

Chime Communications' preliminary results for 2010 revealed that organic growth in its advertising and marketing services group was 25 per cent, but organic growth in the group's PR segment was flat.

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