International PR sector in good health with double digit growth in 2010
BARCELONA, 26 MAY 2011 – The international public relations (PR) consultancy sector grew bigger and stronger in 2010 and is expected to grow again in 2011, according to the latest World Report from the International Communications Consultancy Organisation (ICCO). Digital and social media services are playing an increasingly important role as PR gains share against other marketing disciplines, though staffing remains a challenge.
Revenues and profitability
The consultancy industry saw moderate or double-digit growth in 2010 in a majority of the 24 countries surveyed.
The world’s two largest markets for public relations – the US and the UK – both rebounded from a five percent decline in fee income in 2009 to record a double-digit recovery in 2010. US consultancies posted an average 11% increase in overall fee revenue, while the UK saw a 13% increase. Both also saw improvements to profitability, the UK by an average of 30%.
Western European countries saw more modest growth or nearly unchanged conditions (from -1% to +3.5%), though the Nordics and Central and Eastern European countries fared better, with average growth ranging from 5% to 12% for the year. Belgium outperformed its neighbours with 10% growth, mostly driven by work for and around the European Parliament and Commission. Croatia and Ireland were the big exceptions, with fees shrinking by close to 15% each on the back of public and private spending cuts in 2010.
Brazil and Russia pushed ahead with 23% and 17% increases in revenues respectively, supported by strong economic expansion in their countries. Australia grew by approximately 10%, fuelled by the increasing internationalisation of public relations activities.
In 2010, consumer marketing communications accounted for one-third of PR consultancy revenues in the UK. They also contributed to growth in the US, where healthcare, corporate and crisis communications were the other main sources of revenue. The same four service areas drove growth throughout Europe, aided by work in public affairs and media relations.
In other regions, Brazil saw rising demand for social media services and international communications, and Indian consultancies benefitted from high demand for financial communications, consumer marketing and technology.
For 2011, digital and social media services, corporate communications, crisis management and public affairs are reported by a majority to be expanding, while revenues from event management services are in decline.
The energy sector represents an important source of growth for PR consultancy in 17 surveyed countries, and healthcare in 11. The financial industry is listed as a growing source of business in nine countries (including the US and UK), though Italy, Portugal and Turkey view this as one of the industries with the worst prospects for the year.
The public sector looks especially promising in eight countries but has low potential in another four, namely where recent spending cuts are still taking effect (Austria, Ireland, Italy and the UK).
As for the least promising industries overall, retail tops the list, followed by automotive and real estate.
Digital and social media
Demand for digital services rose internationally in 2010. As a percentage of overall fee income for PR consultancies, these services remained relatively small (ranging from 5 to 20%) but show an increase over 2009. Surveyed countries overwhelmingly expect demand for digital services to increase again over the course of 2011.
More and more, marketers are requesting digital services that include social media expertise, and a large majority of PR consultancies have already integrated these services into their offering.
Outlook for 2011
All countries surveyed in the World Report expect conditions to be as good or better in 2011 than in 2010. 20 out of 24 predict outright growth this year of up to 20%, while the remaining four predict that fee revenues will remain the same or increase slightly.
The top five challenges ahead for public relations consultancies, according to surveyed countries, are:
- Client budgets
The issue of attracting talent (and then retaining it) will be one of the biggest concerns for PR consultancies this year since growing the business depends upon achieving the right mix of skills and experience and having the ability to form lasting relationships with clients.
Commenting on the report’s findings, ICCO President, Richard Houghton said; “Clearly 2008 and 2009 were very tough for the consultancy sector internationally, but this report gives solid reasons to take a positive outlook for 2011 and beyond. The growing demand for digital and social media services, combined with lean consultancies as a result of the downturn, means we are well placed to benefit from what economic growth there is and the associated demand for communications services and support.”
The ICCO World Report 2011 includes data from national PR trade associations in 24 countries spanning Europe, North and South America and Asia-Pacific. Data was collected during April and May 2011 through a written questionnaire.
Complete information and commentary can be found on: http://insights.iccopr.com. Past reports can be downloaded from the ICCO website: http://www.iccopr.com/knowledge-base/Worldreports.aspx.
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