If budget increases are evidence of the importance an organisation
places on a particular department, then in-house PR has acquired a most
favoured status. According to the 1998 PR Week In-House Survey, 65 per
cent of in-house departments enjoyed a budget increase this year,
compared with 46 per cent last year. The survey was based on information
supplied by 229 organisations throughout the UK.
On average, in-house departments saw their budgets rise by around 38 per
cent, an approximately eight per cent greater rise than in 1997. Of the
nine per cent which saw budgets decrease, the average reduction was
around 30 per cent. Twenty-six per cent had no change. But, with 73 per
cent of in-house departments planning not to increase staff levels, and
a growing reliance on external PR expertise, it seems likely that the
communications strategy will be co-ordinated, although not necessarily
implemented, in-house. It follows that external PR agencies could stand
to profit from the increase in in-house PR budgets.
Whether the PR function is represented at board level appears to depend
on the type of organisation it represents. In general, 30 per cent of
respondents say that a PR director sits on the board. This rises to 41
per cent in hi-tech companies, but falls to 15 per cent in the
In the majority of cases, the in-house PR function is still firmly
linked to the marketing department. A quarter of respondents report to
the marketing director, while a further 25 per cent report to the
chairman/CEO of the company. Sixteen per cent of respondents report to
the managing director, nine per cent to the marketing manager, four per
cent to the human resources director and 21 per cent to other masters.
The close relationship between the marketing department and the PR
department becomes even more apparent when it comes to funding. The
majority - 55 per cent - of respondents say their PR budget is derived
from marketing resources, while 19 per cent have an autonomous budget.
Fourteen per cent operate out of a central or chief executive’s budget,
10 per cent are funded from a corporate/public affairs budget, while the
remainder operate from other sources.
Unsurprisingly, media relations emerges as the most common PR function,
accounting for 16 per cent of the average allocation of in-house
This is closely followed by consumer PR and business-to-business, both
scoring 13 per cent. Other key functions include investor relations and
international communications, each accounting for nine per cent of
resources; and financial PR and corporate PR, both at eight per
When it comes to the crucial issue of use of research for planning and
proper evaluation and analysis of results (R&E), the overall picture
that emerges from the 1998 In-House Survey is disappointing. Despite the
increasing pressure for communications departments to ensure that their
activities are accountable, the percentage of resources allocated to
evaluation has remained static at just two per cent. On a more
encouraging note the amount of funds allocated to research has doubled
from last year to three per cent. However, both figures still fall well
below the 10 per cent allocation of funds to R&E advocated by PR Week as
part of the Proof campaign.
While in-house departments remain lax about their own evaluation, the
failure of external agencies to properly evaluate campaigns emerges as
the joint third most common cause for complaint. It seems that in-house
departments are guilty of not practising what they preach.
In cash terms, the largest chunk of the PR budget - 14 per cent - is
spent hiring external consultancies. This is an interesting development
- last year, just eight per cent of the PR budget was earmarked for
external consultancies. It is clear proof of the complementary role that
outside agencies and consultants are now expected to play.
Conversely, the amount of cash directed towards in-house staff has
decreased to 13 per cent this year from 39 per cent last year. The fall
is another indication that companies are increasingly likely to spread
the costs of PR between their own departments and external agencies.
Seventy per cent of in-house departments now rely on the expertise of
external PR consultancies. Of that figure, 50 per cent employ one
consultancy, 41 per cent employ two or three, while nine per cent employ
four or more.
Last year’s survey showed that of those in-house departments which used
agencies, 34 per cent employed either one or two agencies. According to
59 per cent of respondents, the responsibility of hiring and firing
external consultancies falls to the PR/corporate affairs director or the
public relations manager. Otherwise, 21 per cent of the time it is the
marketing director who decides which consultancy to hire - an increase
of 16 per cent from last year.
Generally, agencies can expect to be retained for one to two years - 41
per cent of respondents opted for this time-frame. At the opposite end
of the spectrum, five per cent of in-house departments retain their
agencies without review for more than five years.
As with their own departments, media relations is the most common
required service agencies are asked to perform, according to 29 per cent
This is followed by strategic advice, which was quoted by 15 per cent
and crisis management and literature production, both claimed by 10 per
Strategic thinking scores highly on the list of the most important
aspects of the PR service agencies can provide to in-house departments.
The importance of strategic advice is perhaps an indication that PR is
increasingly involved at the inception of a campaign and not just an add
The most important contributions that an agency can provide are sector
knowledge and creativity, both scoring 19 per cent, followed by
strategic advice on 17 per cent; speed of response, 15 per cent; quality
of media contacts, 14 per cent; ability to evaluate work done, six per
cent; knowledge of radio and TV media,five per cent; international
capability, three per cent; and media planning capability, two per
The most common area where agencies fall down, according to their
in-house task masters, is failing to deliver. This accounts for 22 per
cent of complaints, followed by the complaint made by 15 per cent of
respondents that junior staff were left to handle their business. In
joint third place were budget over-runs, over-promising and lack of
evaluation. In terms of staff morale, moving to an agency is not a
priority for in-house PR people. The majority are happy where they are,
with just 31 per cent saying they would consider a move to a
Awareness of PR brands is high among in-house practitioners. The most
frequently cited were in descending order: Shandwick, Hill and Knowlton,
Countrywide Porter Novelli, Burson-Marsteller and Text 100.
AirWair is the sales and marketing division of R Griggs, which
manufactures Dr Martens footwear. While the brand is popular worldwide,
with new markets opening up in China and Hong Kong, the footwear is
still manufactured in and around England’s shoe capital,
Recently, to get away from its image of the classic black DM boot,
family-owned R Griggs introduced ’jazz heels’ and ’moc soles’. But its
communications strategy continues to focus on its loyal following of
16- to 25-year-olds.
’Our PR strategy is understated and aimed at grass-roots,’ says AirWair
communications manager Karl Nielson. ’Our customers are at the
rebellious end of the youth market, so everything we do is tied in to
youth sponsorships and promotions.’
The five-strong in-house communications team includes both a fashion and
a music promotions executive. These two devote much of their energies to
supporting bands, festivals and student fashion shows. For the past
three years, Dr Martens has sponsored a New Band Stage at the Phoenix
and Reading festivals, where the likes of the band Kula Shaker have
started on their road to fame. In addition, last month Dr Martens signed
a three-year shirt sponsorship deal with West Ham football club. But the
company is also keen to strengthen community ties between its Shepton
Mallet factory and the local Glastonbury festival.
Last year, AirWair created a wall of fame from limited edition
Glastonbury boots, signed by musicians ranging from Sting to The
Prodigy. Later this year, it plans to auction these in aid of homeless
Avon Cosmetics has been ringing British housewives’ doorbells selling
its products direct, since 1959. At the end of last year, the company
realised the need to address its old-fashioned image to maximise
To broaden its appeal and implement a more cohesive communications
strategy, the company expanded and refocused its corporate PR
Since January 1998, the seven-strong team, led by Kim Fernihough, who
arrived from Boots, has established its reputation both with the media
and internally. ’We have had to work hard to change some of the
perceptions within the company about what we should be doing,’ says
Fernihough. For example, she cites the company’s six-year support of the
charity Breakthrough Breast Cancer. In the past, Avon raised huge sums
of money for the charity, but never received any credit. In March,
Fernihough persuaded her superiors to invest funds and change this
relationship to sponsorship of the Fashion Targets Breast Cancer
campaign. As a result, Avon has received huge publicity and been able to
arrange tie-ins with top models and fashion designers, such as Alexander
Other projects scheduled for this year, include the Beauty without
Boundaries campaign. Timed to support the September launch of Avon’s new
Women of Earth fragrance, the company has commissioned a range of
photographs by female photographers of women going about their daily
tasks. The images will be shown in the departure lounges of Edinburgh
and Birmingham International airports. Fernihough says: ’This year, we
dipped our toes in the water to find out what works best. Next year, we
will tailor what we have learnt and take a longer term approach.’
In the UK, Bass Brewers handles brands including Grolsch, Caffrey’s
Irish Ale and Carling. Its eight-strong communications department, based
in Burton-on-Trent, covers external and internal communications as well
as business-to-business campaigns. Glasgow-based communications manager
Scott Wilson looks after the Tennants equity. Bass Brewers works with
Paragon Golin/Harris on its staff newspaper Bass Brewers News and with
agencies including Infocom on its technology-driven communications.
Last month the company faced a crisis when eight million cans and
bottles - about half its Birmingham plant’s weekly output - had to be
recalled because of possible contamination. Bass’ sophisticated intranet
service, Brewnet, proved invaluable as employees were able to follow
events as they happened on the internal news service.
Communal PCs for shift workers in the company’s eight breweries means
that all staff are up to speed on internal matters. But communications
director Philip Malpass says: ’You solve one problem and create
Now we have to address the issue of encouraging face-to-face team
briefings.’ To boost staff morale, in January 1999, about 80 per cent of
employees will attend a national one-day conference at Birmingham’s
Cap Gemini is Europe’s largest computer services and business
consultancy which aims to help companies solve business problems or gain
a competitive advantage through use of IT. Its UK press office, based in
London, is run by PR manager Michelle Perkins, who has a press office
assistant and reports to external communications manager Denise Colgan.
The press office takes most of the incoming calls, while prime agency
Banner PR and a number of smaller regional agencies do most of the
proactive PR. Many of the corporate messages, such as group results and
announcements about acquisitions and alliances, come out of the company
headquarters in Paris.
There are a number of key messages that the press office is responsible
for communicating. These include - Cap Gemini helps companies use IT to
run their business better, it understands technology and is a good
’We are (only as good as) our people and we need to make sure we recruit
and retain the best. We work hand-in-hand with human resources to
promote the company to current and potential employees,’ explains
Perkins. She adds that London-based hi-tech agency Banner is responsible
for regionalising messages to the 80 per cent of employees who work
outside of the capital.
GRANADA MEDIA GROUP
Group corporate affairs director Chris Hopson is in charge of a team of
45 staff based in four cities: Manchester, London, Leeds and
The geographical spread reflects the group’s ownership of four ITV
franchise holders: Granada, LWT and Yorkshire Television and Tees
Television. Following last year’s acquisition of the latter, Hopson has
restructured his team, creating head of media relations posts for both
the north and south of England, filled by Sallie Ryle and Zoe McIntyre
respectively. Last year also saw the arrival of corporate affairs
manager Virginia Lee from regulatory body the ITC.
There are no retained agencies as Hopson believes he has all the
expertise he needs in-house for both programme and corporate PR. The
success of the Free Deirdre campaign, after a plot-line in which
Coronation Street character Deirdre Barlow was wrongly arrested, lends
credence to Hopson’s view. There was coverage on News at Ten and a
widely reported mention during Prime Minister’s Question Time in the
Hopson and his team also had to handle communications linked to the
redundancies of 120 staff in the wake of the Yorkshire-Tyne Tees
acquisition. In addition, there have also been licence discussions with
the ITC and a Government relations programme ahead of a broadcasting
IMPERIAL WAR MUSEUM
’A lot of my effort here is directed towards exhibitions, which is the
most effective way for us to get publicity,’ says Imperial War Museum
keeper of museum services Christopher Dowling. Undeniably Dowling and
his team have maximised publicity opportunities out of recent
exhibitions staged by the Lambeth museum in London.
Last year’s Forties Fashion and the New Look show was shrewdly marketed
to catch the public’s imagination, driving income admission up from
pounds 719,000 in 1996 to pounds 944,000 in 1997. Ballerina Darcey
Bussell was persuaded to model some of the clothes appearing in the show
in a photoshoot for You magazine. She also wrote an introduction to the
book accompanying the exhibition and attended the launch party, which
saw a good media turn out complemented by celebrities, such as ’It Girl’
Tamara Beckwith. Bussell also appeared in the poster for the exhibition,
photographed by Lord Snowden.
Christian Dior sponsored the show.
This year, the big exhibition is Landmines, the April opening of which
was attended by Foreign Secretary Robin Cook. ’We are always looking for
opportunities and we like to persuade people to launch TV documentaries
or books here because it gives us a great deal of publicity and brings
useful contacts into the museum,’ says Dowling. He adds that, where
appropriate, the museum is prepared to consider creating exhibitions
linked to book or film projects in the hope of achieving mutual
On the corporate front, the live issue is the proposal to build a
northern branch of the museum in Manchester.
Over past months, media attention at Manchester Airport has moved away
from environmental protests at a second runway, to focus on the more
positive aspects of the operation. The airport has handled its share of
incidents, not least the media circus when former au pair Louise
Woodward, convicted of manslaughter in the US arrived back in the UK.
But the dramatic growth in passenger numbers and air services, a
recently opened British Airways terminal and a new 40-site retail
complex, mean the 12-strong PR team has focused much of its efforts on
promoting the airport and Manchester to the world.
According to Sally Sykes, head of press and PR, the in-house PR
operation sits firmly under the umbrella of corporate affairs, with her
director reporting straight to the chief executive. Currently, the team
covers five main areas: political relations; media relations; event
management; arts sponsorship, and internal communications. On the
political front, the pace of Government policy has meant a busy year.
The team has provided information for parliamentary reports on
regulatory issues and last month’s white paper on integrated public
This year pounds 560,000 of the PR budget went to arts sponsorship. As
principal sponsor of the Halle Orchestra, this month, Manchester Airport
is flying the musicians out to Austria for the Salzburg festival.
Likewise in December, the company is sponsoring the opening season of
Manchester’s newly restored Royal Exchange Theatre. ’To attract more
customers to Manchester, it’s in our interests to promote the culture of
the region,’ says Sykes.
Cirencester-based Mitsubishi Motors has an in-house team of four, headed
by press and public affairs manager David Miles, who has been in the job
for 15 years. Occasionally freelance journalists are used to produce
copy for ’dealer-type stories’, but otherwise work is not
’PR agencies don’t have a very high reputation in the motor industry,’
says Miles. ’You have to work with and believe in the product so you
know it top to bottom. Motor journalists are incredibly professional so
you really have to know your stuff.’
Much of the communications focus over the past year has been on the GDI
engine, which is the result of almost 30 years of research and
The engine is more powerful than its predecessors but at the same time
is more eco-friendly, cutting emissions by 20 per cent and reducing fuel
consumption by a similar amount. Journalists have been able to test
drive GDI-powered cars both in the UK and on overseas trips. In May,
Mitsubishi exhibited at the Greener Car Show, held in Chester, which was
attended by deputy prime minister John Prescott who was speaking on
environmental issues as part of UK’s presidency of the EU.
Major activities this year include the sponsorship of the Badminton
Horse Trials, at which Miles and his team run a media centre for 600
journalists, plus a fully computerised results service. Another annual
fixture on the calendar is the British International Motor Show in
Birmingham. On the eve of press day, Mitsubishi hosts a dinner to which
160 motoring journalists are invited.
There is also publicity linked to motor sport. Current World Rally
Champion, Finland’s Tommi Makinen, drives a Mitsubishi.
MUSEUM AND GALLERIES COMMISSION
The Museum and Galleries Commission (MGC) exists to safeguard and
promote the UK’s 2,500 museums and galleries. Its key role is to provide
expert and impartial advice and to raise standards.
The four-strong public affairs team is quite new and covers general
information, media relations, parliamentary liaison and
Headed by Julie Taylor, the department is allocated its own budget and
reports directly to MGC director, Timothy Mason.
Major projects over the past year have included creating a new corporate
image and organising a conference on the issue of museum charges. Taylor
says: ’The conference generated huge media coverage and kick-started
lobbying of the Government by other bodies, such as the National Arts
Since December 1996, the organisation has also run a designation scheme,
which focuses attention on outstanding collections based in non-national
museums. In June, culture secretary Chris Smith announced the second
round of successful applicants to the programme and in July, backed the
scheme with funds of pounds 15 million.
The public affairs team is also working on the MGC Conservation Awards,
which is sponsored by the Jerwood Foundation. The awards will be held at
the Foreign and Commonwealth Office in December. Previous winners have
included National Museums and Galleries on Merseyside, which runs a
conservation centre which is open to the public.
By the beginning of next year, Taylor expects the MGC web site to be up
and running. Initially offering information and advice, in the longer
term it will include catalogued details of collections around the
’This will be a wonderful tool,’ says Taylor. ’The information we hold
here is second to none, so this will be of use to curators, academics
and the general public.’
Under the directorship of corporate affairs chief Philip Dewhurst,
Railtrack has 27 headquarters staff and a further 12 in the regions. The
company, which owns the railway network infrastructure, also uses three
consultancies: Brunswick for financial communications, The Rowland
Company for corporate hospitality and event support and Bell Pottinger
for public affairs consultancy work.
’I’m a great believer that consultants should advise, rather then be the
spokesmen for a company or their public face at Westminster,’ says
Railtrack head of public affairs Simon Miller.
Recent public affairs tasks have involved dealing with the Rail
Regulator in the run-up to the 2001 review of access charges (from which
Railtrack derives the largest chunk of its revenue) and providing the
Government with input for its white paper on integrated public
Positive news coverage this year has included Railtrack ’steaming to the
rescue’, as the Sunday Times put it, of the Channel Tunnel rail
Railtrack struck a financial deal with consortium London and Continental
and the Government, guaranteeing that phase one of the project would be
built. ’It’s a valuable precedent as it shows how Railtrack and the
Government can work together to solve public policy problems,’ says
As ever, rail safety concerns manifested themselves in a number of
stories, the most damaging of which was last year’s Southall rail crash
in which seven passengers died and 160 were injured. Working in shifts,
the press office fielded 5,000 calls in four days. There has also been
Health and Safety Executive criticism of some construction and
maintenance work and the standard of some of the track.
But, on the whole, it has been a comfortable year for Railtrack, which
has seen its share price rocket since its privatisation in 1996.
The last quarter of 1997 was described as ’pretty grim’ for Safeway by
communications director Kevin Hawkins. In September, the food retailer’s
talks with supermarket rival Asda about the possibility of a merger were
prematurely leaked to the press. On the heels of this came a series of
profit warnings, and the abrupt departure of trading director George
Charters, earlier this year.
However, initiatives such as the relaunch of its customer loyalty card
and internal restructuring seem to have eased some of Safeway’s troubles
for the near future.
Previously reporting directly to chief executive Colin Smith, Hawkins’
operation now sits under the umbrella of Roger Partington’s customer
development division. Most of the team of 25 have been recruited over
the past three years and subdivide into five units, covering public
affairs, consumer PR, wines PR, corporate and internal
While there is still some media speculation about Safeway running out of
steam, its public relations machine has kept the communication channels
open. For two years running, a leading survey of journalists has placed
the company as the premier retail chain for press relations. Hawkins
says: ’You have to keep talking. It’s all very well being open with the
media when things are going well, but you can’t batten down the hatches
and retreat to Fortress Safeway during those times when things aren’t so
Along with the other three big supermarket groups, Safeway’s PR team
faces further challenges over issues such as the safety of genetically
modified organisms (GMOs). ’The level of public interest in the food
industry means the pace is fast and furious’, says Hawkins. ’But we have
people with energy and experience, who are able to think on their
SIEMEN’S MEDICAL ENGINEERING
Siemen’s, the largest electronics group in Germany, is currently
battling against the effects of the Asian crisis, as witnessed by the
recently announced winding down of its semi-conductor plant on Tyneside.
In the recent past the group’s medical equipment division has also
suffered financial losses, but now seems to have turned the corner.
’For a while, Siemen’s healthcare sector was perceived as
under-performing and at risk of being sold off,’ says John Stoddart, UK
marketing manager of Siemen’s Medical Engineering (SME) and Siemen’s
Healthcare Services (SHS). ’We were criticised for being rather
unapproachable and so we have made a conscious effort to reposition
ourselves as solutions providers, rather than the purveyors of white
With an in-house PR team of two, the one-year-old SHS business is
handled by Countrywide Porter Novelli, while Basingstoke-based agency,
De Facto works with SME on an ad hoc basis. Currently, the engineering
division is trying to raise awareness among health professionals of the
dangers of X-ray overdosing. As levels from its own products are
comparatively low, the company wants to reinforce its image as a
In addition, since the beginning of the year the PR team has worked on
the launch of a new magnetic resonance product. Costing around pounds
700,000 per unit, the productalready has 50 per cent of the UK market
SHS however, has been dealing with the set back of withdrawing a major
product. In June, the company decided not to go ahead with a new patient
administration system it was working on with the Government.
Unfortunately, some customers expected to upgrade from an earlier
version and had already invested financially. With an ex-employee among
the journalists asking questions, Stoddart says: ’We had to be totally
honest and provide some very difficult answers. But I think we handled
the situation well.’
The Kingfisher-owned health and beauty retail chain has an in-house team
of six, headed by public relations manager Catherine Emanuel and
internal communications manager Theresa Wright, who both report to head
of marketing Paul Geddes. A decision was taken not to replace part-time
head of communications Tanya Hughes, who left the company in March at
the end of a one-year contract.
Superdrug now has over 700 stores nationwide and is expanding the number
of outlets which contain pharmacies - currently 140. In line with this,
a key communications task has been to drive home the message that the
company’s healthcare business is as important as its cosmetics
An example of this was the publicity which was generated for Superdrug’s
launch of the first ever over-the-counter osteoporosis risk assessment
With input from its long-standing PR agency Lexis, the in-house team put
together the Solait Suncare Amnesty for Superdrug’s 43-product suncare
range Solait, which was repackaged this year. Consumers were offered a
pounds 3 reduction on Solait if they traded in old suncream products.
The campaign runs until the end of the month, when the team will begin
evaluating its impact, both media- and sales-wise.
One of the most successful techniques for generating media coverage has
been to ’come up with new product ideas,’ says Emanuel. There are three
examples of this. First, Virgin Radio, The Big Breakfast, three national
newspapers and a slew of magazines all covered the launch of World Cup
condoms: prophylactics in England’s home kit colours. There was also the
invention of the UK’s first nipple protection stick for sunbathers - the
Solait Nipstick - supported by survey findings which showed that ’older
women are more likely to throw their tops and caution to the wind’. The
Nipstick also won won substantial coverage for the company.
October will see the launch of a third PR-devised product, a breastcare
bath oil, which has been created because experts say the best way for
women to examine their breasts for lumps is in the bath. The product is
part of Superdrug’s cause-related marketing project, working alongside
Breast Cancer Care. It will be launched during Breast Cancer Awareness
Swallow Hotels’ in-house public relations department was set up in
October 1996 when Kish Wilkinson was appointed as its PR manager. Part
of the Vaux Group, which includes a brewery and a chain of pubs, Swallow
operates 36 hotels around the UK.
The two-person PR department handles corporate PR nationally, while
financial PR is handled by the parent company. ’Our aim is to gain
maximum exposure for Swallow nationally and establish it as one of the
biggest hotel chains,’ says Wilkinson.
The department undertakes public relations initiatives for business and
leisure programmes. Recent work has included the launch of a leisure
breaks brochure, and the launch of the new annual tariffs, featuring
room rates that include breakfast. This year has been a busy one for
Swallow with the acquisition of the three-property Manor Hotels group,
and the opening of major new hotels in Huntingdon and Liverpool. For the
opening in Liverpool, the in-house department has been working with
local PR agency Stopforth Bright Anderson. ’We don’t tend to use
external agencies, but the hotel in Liverpool is part of a major
redevelopment of the city centre which the PR agency had been involved
in for some time,’ explains Wilkinson.
Another major part of Wilkinson’s remit is to train hotel staff to
handle local PR. ’I’ve been going out and telling the hotels what public
relations can achieve, which has raised the profile of PR in the
company,’ she says. ’When we purchased Manor Hotels earlier this year,
it was important to project a good image in the local media to help with
staff morale and to ensure guests and suppliers didn’t feel as if they
were losing anything.’