IN-HOUSE SURVEY: Holding steady - In-house practices have seen a levelling out in budget increases this year, although staff numbers are growing significantly, reflecting a decreasing reliance on external consultancies, says Maja Pawinska

PR budgets for in-house PR departments have been stable rather than buoyant this year, according to the 1999 PR Week In-House Survey. The number of in-house PR departments which saw budget increases has fallen from 65 per cent in 1998 to 40 per cent, a figure nearer the response to the1997 survey. But very few teams saw budget cuts - only six per cent, compared to nine per cent last year.

PR budgets for in-house PR departments have been stable rather than

buoyant this year, according to the 1999 PR Week In-House Survey. The

number of in-house PR departments which saw budget increases has fallen

from 65 per cent in 1998 to 40 per cent, a figure nearer the response to

the1997 survey. But very few teams saw budget cuts - only six per cent,

compared to nine per cent last year.



The survey was based on information gathered from 176 organisations

across the UK, with turnovers ranging from pounds 9,000 to pounds 116

billion. There were responses from all sectors of business, although

around one-third were from Government or public service

organisations.



The survey reveals that larger in-house teams are continuing to

grow.



The vast majority - more than 70 per cent - work in teams of between one

and five people, but nearly 80 per cent of respondents said they had

been in teams of this size in 1997. In contrast, those who are working

as part of a team of six to ten people has risen from ten per cent to 14

per cent, and the number working in teams of 11 to 20 people has grown

from six per cent to eight per cent.



Most respondents - 62 per cent - said staffing levels are likely to stay

the same for the next year, although a significant 36 per cent say they

will increase. Of those who said an increase was planned, 89 per cent

said it would be by one or two people, nine per cent said by three to

five people, and two per cent said they would increase numbers by six or

more people. Only two per cent of respondents said staff levels were

likely to decrease.



A third of respondents, who were mainly PR or communications managers,

said they reported to the chairman of the organisation, and just over 20

per cent said their boss was the marketing director.



Eight per cent of respondents have moved in-house in the past two years,

but the number who would consider moving to a consultancy has leapt from

31 per cent last year to 48 per cent.



Budget allocation



Media relations is still the most common public relations function for

in-house practitioners, accounting for just over 30 per cent of the

average allocation of in-house resources. This has leapt from 16 per

cent for last year’s respondents. Two other areas have also taken a much

greater share of resources this year: corporate PR, increasing from

eight per cent to 14 per cent, and internal communications, which has

increased from nine per cent to just over 15 per cent.



More respondents had their PR budget allocated from corporate and public

affairs resources - 16 per cent compared to ten per cent last year - and

fewer PR funds were derived from the marketing budget, with only 32 per

cent compared to 55 per cent last year. The biggest rise was the number

who said their budget came from central organisational funds or the

chief executive - 28 per cent, double 1997 levels. A further 14 per cent

said they held an autonomous budget.



Research and evaluation



In-house departments still have a way to go in reaching the 10 per cent

allocation of funds to research and evaluation advocated by PR Week’s

Proof campaign - the three per cent budget slice for this area was the

same as the previous year. But there is encouragement to be gained from

the 80 per cent of in-house consultants who use research commissioned by

other departments in their work, and the 14 per cent who already have

access to a copy of the Public Relations Research and Evaluation

Toolkit, published earlier this year as part of the Proof Campaign.



The measurement message is getting through on another front, too: the

most common complaint made by in-house departments about external

consultancies is now the lack of evaluation of the work done.



From the 39 per cent of organisations where PR was represented at board

level, 56 per cent of respondents said they believed measuring the work

of the PR team was very important to the board, 42 per cent said it was

fairly important, and two per cent said it was not at all important to

those at a senior level.



Where PR is not represented at board level, the number of respondents

who felt that the board did not think measuring PR was at all important

rose to eight per cent.



External consultancies



Bought-in services still take the biggest chunk of the budget after the

33 per cent spent on staff costs, but in-house PR teams are becoming

slightly less reliant on external consultancies. The number of in-house

teams who last year said they used an external consultancy has dropped

by three per cent to 67 per cent, although those who do use

consultancies are more likely to use more than one.



Last year, half of the respondents said they used just one agency, and

this has dropped to 40 per cent. Now 46 per cent are likely to use two

or three agencies, and 14 per cent use four or more.



This year, outside agencies accounted for 10 per cent of budgets, down

from 14 per cent, but nearer to the 1997 survey figure of eight per

cent. In the majority of organisations, PR managers and the PR or

corporate affairs directors were responsible for hiring agencies.



As with in-house teams, the service most required of external

consultancies is media relations, according to 24 per cent of

respondents. The second most required function, cited by 15 per cent of

respondents, was strategic advice, reflecting the growing recognition

that PR has a role to play as a strategic function.



Strategic thinking was the number one fundamental in-house teams look

for from external consultants, with 22 per cent saying it is the most

important aspect of service. This could be one of the reasons why so

many in-house managers were unhappy with junior staff handling business

- the second highest cause for complaint this year.



External consultancies are most likely to be retained for between one

and two years; 48 per cent of respondents said they would review the

consultancy after this period. A further 25 per cent said they carried

out reviews more frequently than this - every six months to a year -

while 15 per cent said they changed agencies every two to three years. A

solid nine per cent, however, were happy to hang on to their agency for

three to five years, and three per cent did not carry out reviews more

frequently than every five years.



The three most well-known agency names were again Shandwick, Hill and

Knowlton, and Countrywide Porter Novelli. Others which received a number

of mentions were Citigate, Brunswick, The Red Consultancy, Text 100,

Burson-Marsteller, Fishburn Hedges, Biss Lancaster, Key Communications

and Freud Communications.



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