Public Relations Global industry Outlook

The Global Public Relations market in 2016 was valued between $15 billion and $16 billion

Public Relations Global Market Maturity

  • The public affairs agency and specialty market (agencies specialised in a particular PR service area or business sector) in Latin America is still in the evolution phase, with the presence of very few specialised PR agencies 
  • The major challenge in European and North American markets is to find and retain critical talent at a time when the need for talent to manage specialised areas, like digital PR, is increasing

Public Relations Industry Trends

  • The North American and European markets for public relations are mature, with ongoing mergers and acquisitions to increase geographic reach, industry-specific expertise and service execution expertise in areas such as media relations and digital and social media 
  • As expectations increase for demonstration of return on investment for all communications spending, there has been (and will continue to be) an increased focus on measurement and evaluation, where most of the buyers are investing 5–7 percent of their PR budgets in measurement. However, measurement and evaluation remains a weakness of the industry overall, and buyers are looking for improved methods for public relations to be viewed credibly by other functional departments, such as marketing, sales and financial

Public Relations Industry Drivers and Constraints 

Buyers are looking to work with their incumbents to create measurable Key Performance Indicators (KPIs), which take into account both quantitative and qualitative variables. However, the difficulties in measuring and evaluating agencies would remain a major constraint for the PR industry Sources: Primary Expert 1 and Beroe Analysis.

Rapid Use of Social Media:

  • Increased adoption of social media is leading to increased spend in digital PR, with earned media being the dominant revenue driver Growth Driven by Content: 
  • A majority of the top buyers estimate that future PR growth is mainly derived from creating relevant content on traditional and digital mediums with an objective of building reputation among various stakeholders Rise in Technology Adoption:
  • The PR industry is experiencing changes in response to new technology, expansion of new communication channels and greater use of data analytics

Talent Crunch: PR Firms are not Mastering Digital and Other New Technologies 
There is a growing need for diverse talent among resources to meet the PR agencies’ demand for skilled resources in digital mediums
Digital agencies are increasingly preferred over PR agencies for any of the digital PR requirements due to the PR agencies’ lack of digital expertise

Buyers can look at bundling all services and engaging with top global PR agencies, such as Edelman, Weber Shandwick and Golin, or unbundling issue management and public affairs and engaging with local agencies for these services. However, buyers would look at engaging with local and global PR agencies in order to leverage their specialised capabilities, such as the local agencies’ proficiency  in dealing with government officials and regulatory bodies during issue management and public affairs
The retainer model is highly adopted by most of the buyers, as  they could mitigate the risk of being overcharged by capping their  costs to the fixed fee charged by the agencies. Increase in salaries  to retain the employees would not affect the fee charged to the  buyers during the contract duration while following the retainer model.

Suppliers: Top global agencies dominate the public relations business in these markets. All of the major global agencies or holding companies have offices in the medium maturity countries. These markets have fewer local end-to-end PR agencies as compared to the number of global agencies.

Suppliers: Top global agencies dominate the public relations business in these markets. All of the major global agencies or holding companies have offices in the medium maturity countries. These markets have fewer local end-to-end PR agencies as compared to the number of global agencies.Suppliers: There is a much smaller number of regional/local PR agencies that provide end-to-end PR services in these markets. These markets are dominated by global PR agencies, and local agencies are still in the evolution phase.

Suppliers: The US and other markets, like the UK, are the home markets for top global PR agencies such as Edelman, Weber Shandwick and FleishmanHillard. These agencies have a dominant presence in these markets and any innovations in the PR space globally are driven in these markets

Most of the global service providers are present here, and there are a lot of small service providers catering to niche service portfolios. Hence, the supply market is characterised by strong presence of both global and local service providers. Thus, this region is most mature

Buyers are highly matured in these markets due to the high adoption of digital mediums and usage of other tools and technologies across PR services, such as media relations and crisis communications.

There is a favourable supply and buyer landscape for implementing large public relations campaigns. Buyers in these markets can achieve agency consolidation, which would in turn help them in decreasing sourcing complexity, avoiding duplication of work and act as a cost-saving avenue through reduced agency fee based on higher business volumes

Latin American agencies are facing challenges finding employees with backgrounds in research and analytics; hence, it is challenging for the buyers to engage with agencies that are proficient in innovative, quantitative and qualitative research across all the phases of brand marketing, corporate reputation and employee engagement.