NEWS ANALYSIS: Industry looks east for growth

The fastest growth in PR is in emerging markets, says the latest ICCO research. David Quainton finds out why business is booming in three of these countries.

As the global economy recoils like an over-stretched elastic band, the PR industry has yet to feel the downturn that many would have predicted.

The latest International Communications Consultancy Organisation (ICCO) World Report shows healthy growth in PR budgets across the globe last year. And while the industry may simply be exhibiting its trademark optimism, expansion appears to be on the cards for 2008 (see graph).

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In the UK and US - the globe's biggest PR markets - growth was 17 and 12 per cent through 2007. In 2008, eight per cent growth is expected in the UK, and even the US expects some upturn.

But even higher figures can be found in emerging markets. In the past year College Hill and Edelman have bought agencies in China, and WPP took a stake in Russia and the Baltic States' PBN Company. Areas with the smallest PR base and expanding economies lead the pack. PR will grow by 20 per cent in Russia and the United Arab Emirates in 2008. India expects up to 30 per cent.

The Indian PR market might be experiencing heady growth but it has a problem. 'There is absolutely no PR talent in India,' asserts Lewis India general manager Arunava Kahn. 'Only one in 20 students leaving college speaks and writes English to a good enough standard.'

Arunava KahnEnglish is the language of business in India, but despite an improving education system, many Indians fall short.

But PR is still growing, partly the result of economic growth, and partly because PR in India is so cheap.

'PR wins against advertising in India because it is cheaper here than anywhere else,' reveals Kahn. 'A single page advert in the Economic Times will cost more than a year's PR support.'

Technology and financial PR are the strongest disciplines, but consumer and healthcare are catching up fast. Lobby groups are gaining more influence, and PR is at the heart of their activity.

'Indian businesses are becoming international,' adds Kahn. 'They understand the value of PR.'

Russia's economy is growing at a phenomenal rate, and it still has some way to go.

Stuart Leasor, senior vice president and MD at PBN Company, has 60 staff in Russia. He says: 'A banker mentioned to me that the credit crunch happened because people were chasing the last 15 per cent, which is dangerous. In Russia, they are still chasing the first 15 per cent.'

Stuart LeasorBut PR is still unsophisticated in Russia. Leasor describes the presence of many global firms as 'sales shops'.

'In 1993, when we first started operating over here, PR was defined as "spreading information by other means". It's only in the past year or two it has begun to be truly recognised.'

But companies such as Gazprom - the energy supplier that is the world's third largest company - are using PR to spread their global message.

Leasor says the major profit-making PR contracts are confined to city and corporate jobs. 'But the consumer market is growing. By 2011 Russia will be the largest food market in Europe.'

'Dubai's success is not based simply on money. It actually has the smallest oil reserves in the region,' reveals FD MD for the Gulf region John Hobday.

'But it has built a terrific financial centre, the famous Palm island, a range of impressive hotels and the booming media centre - all with a population of 1.5 million.'

John HobdayPR has grown alongside the Emirate itself. Five years ago things were very different. A PRO was the representative who 'dealt with your passport', says Hobday.

'Contrary to common belief, they are not handing out juicy retainer contracts at the airport for international PR companies looking to set up here. It takes time, patience and, critically, an understanding of the local market.'

City agencies such as FD, Buchanan and Bell Pottinger have flourished in the economic centre of Dubai. Consumer PR is largely confined to the travel market.

'Local start-ups struggle to retain the best people,' reports Hobday. 'Good international agencies have a reputation for good work and long-term client relationships, and it is those that get the talent.'

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