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