Budgets up 30%, but firm awareness falls

LOS ANGELES: Corporations doled out over dollars 1 million more to PR firms this year than in 1998, but the top agencies could use some PR of their own.

LOS ANGELES: Corporations doled out over dollars 1 million more to PR firms this year than in 1998, but the top agencies could use some PR of their own.

LOS ANGELES: Corporations doled out over dollars 1 million more to

PR firms this year than in 1998, but the top agencies could use some PR

of their own.



That was the central finding of the latest Harris/Impulse Research

Public Relations Client Survey. The 1,730 responding clients reported an

average PR budget of dollars 4.4 million in 1999, up 29.4% from the

dollars 3.4 million spent in 1998. Over the past two years, PR budgets

have almost doubled, up 91%.



The entire budgetary gain came from work assigned to PR firms - an

average of dollars 2.9 million, up a whopping 70% from the dollars 1.7

million last year. Meanwhile, internal PR budgets declined 11.8%, from

dollars 1.7 million to dollars 1.5 million.



Bergen attributed the trend to ’the expansion of tasks given to

corporate communications staffs without added head-count and the

increasing professionalism of PR agencies, particularly in high-risk

counseling and delivery of emerging technologies.’



But PR budgets accounted for only 0.1% of total client revenues, showing

that PR continues to make do with mere crumbs from the corporate

pie.



’The biggest thing for me is that the average investment in PR is still

terribly modest in terms of the range of vital corporate audiences that

PR reaches,’ said Jack Bergen, president of the Council of PR Firms.



But survey author Thomas Harris disagreed. ’It was fairly good, compared

with the total revenues of companies,’ he said, noting that responding

clients averaged dollars 4.4 billion in revenues. Harris said a better

question - and one which might be tackled in next year’s edition of the

survey - is what percentage of marketing budgets go towards PR.



While PR budgets are increasing, clients’ awareness of the leading PR

agencies leaves much to be desired. In fact, clients’ familiarity with

eight of the top 15 PR firms declined in 1999, with only a handful of

firms (Edelman, Golin/Harris, BSMG) raising their profile (see

chart).



Top 10 firms Shandwick, Weber and BSMG did not feature in the Top 10

awareness rankings. Harris attributed the downturn to a change in the

survey’s methodology, which saw the firms listed alphabetically, rather

than by size.



In a further chart, Edelman edged Fleishman-Hillard and

Burson-Marsteller as the top firm on clients’ short lists of PR

partners, followed by Ketchum and Hill & Knowlton.



Burson rose from third place to tie H&K as the most highly regarded

public affairs firm, while Kekst & Co. ruled IR. Cunningham was top dog

in hi-tech, Porter Novelli easily led healthcare, Ketchum was the top

consumer choice and Burson tied with Fleishman in the

business-to-business rankings.



The study found that clients perform a bit less than two-thirds (63%) of

all PR activity in-house and give just over one-third (37%) to PR

firms.



Work done mainly in-house includes staff relations and IR.



See p2 for more results



Awareness of national PR firms

                              1999   1998   Change

1    Hill & Knowlton           56%    59%      -3%

2    Burson-Marsteller         54%    59%      -5%

3    Edelman                   54%    52%       2%

4    Fleishman-Hillard         46%    50%      -4%

5    Ketchum                   44%    55%     -11%

6    Porter Novelli            41%    42%      -1%

7    Ogilvy PR Worldwide       40%    43%      -3%

8    Manning, Selvage & Lee    33%    33%       0%

9    Golin/Harris              33%    30%       3%

10   Ruder-Finn                27%    29%      -2%

NOTE: Respondents are non-clients of each PR firm. Figures are the

percentage of non-clients familiar enough with each PR firm to rate its

quality. Adds to more than 100% due to multiple answers.

Source: Thomas L. Harris/Impulse Research



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