Public relations budgets rose by about 30 percent last year, according to the sixth annual Thomas L. Harris/Impulse Research Public Relations Survey, which tracks client spending and satisfaction. The 1,931 clients responding to the survey reported spending $3.37 million on public relations this year, up by about $1 million over 1997 budgets, with in-house budgets rising along with spending on agencies.
The responding clients had average revenues of slightly more than $4 billion, with average pub- public relations budgets of around $3.4 million. That money is almost evenly split between in-house and agency spending, but with 32 percent of respondents indicating they are assigning more work to outside agencies, compared to 20 percent who indicate they are moving more work in-house.
The survey also suggests that the majority of public relations departments are responsible for both strategic and tactical aspects of communication. While media relations is the activity that most companies include under the PR umbrella (93 percent), most PR functions also handle special events and strategic counsel (84 percent), internal communications and media training (82 percent), and crisis management (81 percent).
Relatively few of the PR departments surveyed are involved in ethnic marketing (31 percent), sports or entertainment marketing (33 percent) or labor relations (38 percent).
Online communication registered on the survey for the first time in 1998,with three-quarters of clients reporting some involvement with new media. Says Harris, “This new emphasis on online communications reflects the changing face of corporate communications. While media relations continues to be the most frequently practiced type of work, online communications is now assuming an essential place in the mix.”
The kinds of work most likely to be assigned to agencies includes media training, primary research, design, international PR and media relations. Agencies are least likely to pick up business in the realms of internal communications, labor relations, and investor relations, which are much more frequently handled in-house.
In measuring client satisfaction, Harris found a strong correlation between the longevity of a client relationship, budget levels, and overall satisfaction. More than three-quarters (78 percent) of clients who retained an agency for 10 years or more rated their agencies outstanding or very good, while only 59 percent of those retaining an agency for less than a year were equally enthusiastic. There was a similar discrepancy between clients with a budget of $2.5 million or more (77.4 percent rated their agencies either outstanding or very good) and clients with budgets of less than $250,000 (65 percent).