COMMENT: Editorial - Clients in switch back to internal

The results of the eighth annual Harris/Impulse Research client survey (PRWeek, Oct. 2) confirm the enhanced reputation - and budgets - of the PR industry.

The results of the eighth annual Harris/Impulse Research client survey (PRWeek, Oct. 2) confirm the enhanced reputation - and budgets - of the PR industry.

The results of the eighth annual Harris/Impulse Research client survey (PRWeek, Oct. 2) confirm the enhanced reputation - and budgets - of the PR industry.

Spending on PR has risen by 20%. Admittedly, that's not quite as much as last year's growth of 30%, which could be attributed to the e-commerce backlash late in the year, but set against the backdrop of static growth among the clients who were polled, the double-digit increase is a resounding affirmation of the ongoing strength of the PR industry.

It's a significant increase and shows that clients are winning the internal war to persuade senior management of the importance of PR and what it can do to benefit their image - and their bottom line.

Clients have also reacted positively to the recent spate of PR agency mergers and buyouts, according to the survey. Clients are using bigger firms that offer multiple services, which can help simplify and unify their message. There is a 7% increase over last year in the number of clients choosing to work with one primary firm, rather than having a relationship with more than one firm (down by 4%) or using both a firm and freelancers (down by 11%). This is a sure sign that clients are looking for more services under one roof. And more and more agencies are striving to be that one-stop shop.

One interesting new development in this year's survey is the growth in internal PR budgets. In last year's survey, while PR budgets grew overall by 30%, internal PR budgets fell by 11%, while agency budgets swelled massively (by 70%), suggesting a radical switch to outsourcing. This year, the budgets allocated to external PR agencies still grew, but the growth was modest at 10%. On the other hand, internal budgets grew by 80%.

At the same time, client satisfaction and commitment are down. The number of clients rating their firm fair or poor grew by 6%, and the number who were not too committed or not at all committed grew by 5% over 1999.

Could it be that we are seeing a reaction to the previous reliance on outside counsel, with clients seeking to regain control of the growing PR spend?

Or perhaps it's because these super-servicing agencies are not providing some of the value-added qualities on which an agency ultimately depends.

Clients gave their agencies 70% for overall quality of work. But criteria such as creativity, which was ranked the eighth most important criteria among 26, fell by 7% to 50%. Quality of writing, which was ranked as ninth most important, also fell by 6% to 49%. Other notable drop-offs in performance came in strategic counsel (-7%); accessing influential people (5%); the ability to measure results (-5%) and ability to provide research facilities in general (-6%).

There are areas in which PR firms are making the grade - accessibility, chemistry, quality of account team, client service, meeting deadlines and keeping promises. But the PR industry cannot afford to lose its reputation for creativity, insightful consulting advice and accountability. It may be a service industry, but it's also one in which a reputation is built on ideas.



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