It’s not easy to figure out the corporate PR landscape. On the one hand, PR is widely held to be more important and is more respected as a profession than ever before. PR budgets grew by 30% last year alone, according to the Harris/Impulse Public Relations Client Survey 1999.
It’s not easy to figure out the corporate PR landscape. On the one
hand, PR is widely held to be more important and is more respected as a
profession than ever before. PR budgets grew by 30% last year alone,
according to the Harris/Impulse Public Relations Client Survey 1999.
On the other hand, the last 10 years have seen unprecedented corporate
PR consolidation, with departments downsized partly due to mergers and
acquisitions, and partly as more business is handed out to the
As the PRWeek/BSMG Corporate Survey 2000 makes clear, corporate PR
people tend to run in small packs. The average US corporate PR employee
labors alone or with only one or two colleagues. Of course, as the size
of the company increases, so does the department. But even in companies
with revenues of more than dollars 10 billion, as many companies
employed five or fewer PR pros (26.7%) as employed 50 or more.
’Internal empire building was once the road to corporate success; now,
the opposite is true,’ says PR consultant Lee Levitt. ’Internal staffs
of all kinds have been slashed, and more work farmed out.’
Yet the picture as painted by the PRWeek/BSMG Corporate Survey is
actually pretty healthy. PR budgets are expected to increase by 6.9%,
well ahead of gross domestic product, estimated at 2.9% for 2000. And PR
budgets are expected to increase their share of marketing budgets, up
from 17.1% in 1999 to 18.6%.
So how does one tally these more modest numbers with the 30% growth
predicted in last September’s Harris survey? It may partly be the
economy. Gross domestic product in the last four consecutive years has
exceeded 4% per annum, suggesting that the economy is expected to
A more important factor is that this survey represents a wider
cross-spread of corporate PR departments. The revenue of a typical
client in PRWeek’s Corporate Survey was just over dollars 1 million.
Harris showed clients reporting an average PR budget of dollars 4.4
million. ’The Harris Survey polled only clients of the top 10 agencies,
so it shows the picture exclusively at the top end, among Fortune
500-type companies,’ explains Impulse president Bob Novick. ’The
PRWeek/BSMG Corporate Survey sample has a greater range (from less than
dollars 10 million to dollars 10 billion+), which makes it more
representative of the PR picture as a whole.’
CEOs and boardrooms
Even among this more typical company scenario, it’s clear that PR is
gaining respect among top leadership, with 47.7% of departments
reporting directly to CEOs or chairmen. Marketing execs oversee PR in
23.3% of the companies, and 4.5% each report to chief operating officers
and human resources executives.
Yet 59% say the PR function is not represented at the board level. Of
those who do have a seat at the exalted table, most have kept their
chairs warm for five years or less. In corporations with more than 50 PR
employees, this function more often is represented on the board (60%)
and has been for longer periods of time (8.3 years, on average).
Harlan Teller, executive managing director for Hill & Knowlton’s
corporate practice, sees these statistics as encouraging. ’The glass is
actually half full,’ he observes. Elizabeth Allan, president and CEO of
the International Association of Business Communicators, agrees. Her
organization’s studies show an increase in senior-level involvement.
’Access is more important than reporting,’ adds Ronald Culp, Sears’ PR
and government affairs VP.
Not being represented in board meetings isn’t necessarily a bad thing
for PR either, says Bruce Harrison, executive director of The Arthur
Page Society. ’The board room has become less of a room where managers
sit,’ agrees Harris Diamond, BSMG’s president and CEO. ’Boards have
changed from being mostly insiders to mostly external people.’ More
important than board representation is having a say in high-level
decision making on par with finance, law and HR. ’What you want is that
the CEO sees it as one of the top four staff functions,’ says Jack
Bergen, CEO of the Council of Public Relations Firms.
PR leaders most often report to CEOs in the healthcare (63.6%), retail
(55.6%) and publishing (57.1%) industries and are least apt to in
banking/finance (23.5%) and hi-tech (33.3%). Hi-tech corporate
communication leaders frequently call marketing executives boss. ’The
majority of hi-tech is about product,’ explains Larry Weber, CEO of
Weber PR Worldwide. ’That’s going to be down the food chain in the
CEOs are also surprisingly hands-on about the hiring of outside
PR heads at companies with the largest PR budgets usually make their own
decisions about hiring outside PR firms, while CEOs will usually make
that call at corporations with mid-sized to small budgets. Power becomes
more delegated as companies grow because CEOs can’t oversee everything
themselves. ’It’s easier to have more direct reports to the CEO the
smaller the organization,’ Allan notes
Web sites have become important identity-building venues and corporate
communicators are in their element. In-house PR pros almost always have
a hand in running their companies’ Web sites, with 70.2% saying they are
very involved. In contrast, only 38.4% said outside PR firms get
involved with their sites. Experts tend to interpret these statistics as
reflecting the need to quickly and efficiently update sites. Or perhaps
corporate pros don’t think of PR firms as having on-line expertise. ’It
would be expensive to have your outside PR agency directly involved,’
says Bill Novelli, associate public affairs director for the American
Association of Retired Persons. ’Web sites are still esoteric enough
that you need an onsite editor/Web master.’
PR departments in extremely large companies reported less hands-on
involvement with Web sites, again possibly reflecting diversification,
and more openness to working with outside agencies. Allan suggested that
the latter might be explained by large budgets, higher comfort levels
with PR firms, or greater in-house expertise at the agencies.
The statistics are somewhat contradictory. On the one hand, an above
average number of larger organizations state that the PR agency is ’very
uninvolved.’ On the other hand, these same organizations are more likely
to consider using a PR agency to help build or maintain the Web site in
the future. Perhaps it’s because Web sites usually are controlled by the
people who took the lead in establishing them, and thus, communicators
must sometimes play catch-up on the sites marketers initiated.
Yet most agree that the Web is an essential tool for communications.
Nearly 80% of the respondents said their companies used the Internet as
a communications tool, while only 9.6% use the Net to make money -
dispelling the myth that the Web is being developed as an e-commerce
tool. ’The mechanisms for using (Web sites) to close sales are still
being developed in many industries,’ notes Levitt. However, it’s
noticeable that in those fields more commonly using e-commerce - retail,
transportation and travel/leisure - PR plays a smaller role. ’I don’t
want to be a merchant,’ quips Culp, preferring to leave e-commerce to
A press-dedicated area on the Web sites proved popular, in use at 35.4%
of the companies responding and on the drawing board at another
Media centers are particularly favored in hi-tech (51%) and energy (50%)
companies, some speculate because of the complexity and/or relative
newness of their messages, and in the customer-focused consumer products
Large companies also more often have dedicated press areas, perhaps due
to abundant resources and plentiful press inquiries. Lee Weinstein,
communications director at Nike US, said his company’s news link has
significantly curbed media calls.
Crisis communications is moving into the cyberworld more slowly,
although industry prognosticators expect the pace to pick up. Only 42.3%
of respondents used their Web sites as crisis communications tools. ’The
Web is still too new for many companies to have had major crises since
it was developed,’ Levitt observes. That banking/finance was an
exception at 60%, left those who pondered the statistics scratching
their heads, although several felt it logical that 71% of transportation
industry Web sites were used in crises. ’Transportation people have
accidents,’ Novelli observes.
The domain of the corporate PR pro is growing in every way. Nearly half
the respondents (45.1%) said the most senior PR position within their
company was a global one. And with continued corporate consolidation,
growth of the Internet and a global media market, that global outlook
may rise. ’As we survey our members, more and more of them are dealing
with audiences beyond their national boundaries,’ Allan notes.
In-house PR pros also have their fingers in many pies. Common duties
range from cor-porate communications, over which 88.8% have
responsibility, to external affairs, at 50.9%. Less common are public
affairs (35.6%) and investor relations (15.6%).
One of the complexities of PR lies in the fact that the PR function is
not always handled by someone in a PR or corporate communications
Executives in the marketing department typically have the most
wide-reaching responsibility, followed by folks in community relations,
although all departments covered a relatively wide field.
Pros in the corporate communications department were less likely to take
charge of advertising (54.8%) or marketing (32.5%), but more likely to
head up internal communications (80.2%) and investor relations
Public relations departments, on the other hand, were more likely to
look after community relations (79.3%) and external affairs (62.1%).
By budget, it was organizations with the smallest that tended to run the
kitchen-sink gamut. In fact, those with budgets under dollars 20,000 are
more often in charge of advertising and marketing than anything else
As budgets grow, those with the largest coffers aren’t likely to
supervise the more commercial activities, but are heavily involved in
internal communications (85.7%) as well as community relations and brand
management (71.4% each).
Diversification and delegation may again account for the shift, in
addition to the challenge of communicating with larger employee
Conspicuously missing from the corporate PR menu is investor
Only 15.9% of those responding work in departments that oversee IR.
That’s because CFOs and their staffs have probably been better equipped
to provide the arcane financial data that institutions require. However,
in the last 10 to 15 years, emphasis has shifted from institutional
investors to individual shareholders, Bergen notes, and online trading
and rising foreign investment will revive the need for communicators to
translate the numbers into plain language, he says. Others believe a
perception that PR types lack the needed analytical skills or knowledge
base may hinder efforts to bring IR into the fold, while they commonly
note that in many organizations, PR and IR folks work together closely
even if they answer to different bosses.
Staffing and budgets
As, the responsibility of the PR pro potentially widens, it’s clear that
corporate communicators are doing a whole lot with very little. A third
of respondents work alone, and 35% more have only one or two
In smaller companies, tight budgets might account for small staff size,
while lack of appreciation for PR or heavy use of outside agencies are
more likely explanations on the opposite end of the scale.
Not surprisingly, annual revenue closely correlated with the staff and
budget size. Retail topped the list of averages with dollars 5.7 billion
in annual revenue, 12 in-house PR people and dollars 4.3 billion in PR
spending. Close behind was transportation, averaging dollars 3.4 billion
annual revenue, dollars 2.5 million PR budget and 11.6 staff
The survey also revealed that 96% of the companies represented spend
less than dollars 5 million annually on PR, and 80% shell out less than
dollars 1 million.
’People are not putting enough money into PR budgets,’ notes
’The report is accurately showing how much room there is to
On average, PR accounted for 17.1% of total marketing budgets, as
previously noted, and that ratio drops as revenues increase. Culp says
he would be hard-pressed to spend 17.1% of what Sears lays out annually
PR, by contrast, is relatively inexpensive and companies often get a
bigger bang for their buck. ’I don’t think it’s because PR is less
important, it’s simply much more efficient,’ Bergen notes.
Salaries accounted for 28% of the average PR budget outlay, followed by
media relations (14%), corporate advertising (13%) and special events
(11%). While media relations may have great impact, it’s not that
’It’s a brainpower job in my view,’ Allan says. ’The hard costs of
execution aren’t necessarily high.’ It’s also clearly not as important
to clients as certain experts might suggest.
Research gets short shrift all around. It accounts for only 3% of PR
budgets overall, an average of dollars 30,000 per year for a company
spending dollars 1 million a year on PR; and 49% of companies didn’t set
aside any money for research at all. Those statistics reinforce Novick’s
all-talk, no-commitment suspicions about PR and research. ’They love
using research to further PR programs, but most companies hesitate to
use PR to evaluate those same programs,’ he claims. To increase their
budgets and influence, PR pros must invest in research to prove their
own value. Also, many executives don’t realize the cost of research has
decreased, Levitt notes.
As mentioned earlier, corporate PR practitioners predict budget
increases of 6.9% in the coming year. Thirty-five percent estimated
growth below 10%, and 23% expected no change at all. Although healthcare
PR departments represented the largest group of survey respondents
(23.1%), average budgets (dollars 565,000) and projected growth (4.2%)
were near the bottom of the scale.
Healthcare encompasses everything from nonprofit hospitals to
international drug companies. Brian McGlynn, corporate media relations
director at Pfizer, speculates that a plethora of smaller companies may
dominate the sample of healthcare respondents.
Thirty-two percent of the corporations responding employ no outside PR
firms at all, and another 37% work with only one, according to the
Only companies with PR budgets greater than dollars 10 million were
likely to employ five or more firms (71.1%), and they typically spent a
higher percentage of their budget on PR rising to in excess of 20%.
Corporate pros generally are satisfied with their outside representation
(59.4%), though that still leaves 40% who are either neutral or
Most don’t plan to change agencies (55.6%), but again that still leaves
17.7% who do, and 26.6% who don’t yet know.
Of the common complaints listed about outside firms, corporations were
most bothered by unexpected costs (38.5%), an area in which clearly many
agencies can and must improve. Other gripes were split fairly
However, small-budget companies often complained that their PR firms
don’t evaluate their industries well, and those laying down the biggest
bucks often were dissatisfied with staff experience levels, timely
delivery of work and accessibility to top PR executives. Bergen notes
those figures reflect the logic that firms have little incentive to
assign industry specialists to low-budget accounts and that the more
clients pay, the higher their expectations.
The PRWeek/BSMG Corporate Survey 2000 shows for the first time, the
complexity of corporate PR. Yet clearly its domain is growing, its stock
is rising and it’s winning a larger slice of the marketing budget as a
The PRWeek/BSMG Corporate Survey 2000 was conducted by Impulse Research
in January 2000. The results are based on 802 responses to a
questionnaire sent to corporate public relations executives in senior
and middle management positions. Seventy-five percent of respondents
headed the department.
The majority worked either in a corporate communications department
(38.6%) or a public relations department (27.8%). Other departments with
responsibility for PR were marketing (16.8%), marketing communications
(10.5%) and community relations (6.3%). The largest number of responses
were in healthcare (23.1%), hi-tech (15.3%) and manufacturing
A copy of the full report is available for dollars 300. Please contact
Jessica Sung at (212) 251-2600 or by e-mail:
CLIENT PR AVERAGES
Revenue of company dollars 1.4 billion
PR budget dollars 1 million
Increase in PR budget 2000 6.9%
PR as % of revenue 0.08%
PR as % of marketing budget 1999 17.1%
PR as % of marketing budget 2000 18.6%
Number of in-house PR pros 5.4
Number of agencies 1.6
External agency spend in 2000 15.2%
PR as % of revenue
PRWeek/BSMG Corporate Survey 2000.
Source: Impulse Research.