Insights: Budgets, Teams & Agencies

The following research is based on responses from a survey sent to this year's Influence 100, and when applicable, our own analysis and research. Because of rounding, some percentages might exceed 100%.

Structure & Budgets 

To whom do you report?

The number of CMOs and CCOs reporting into the chief executive or chair of their organisation is high and stable this year: 73%, compared to 74% last year, which was a big leap up from 64% in 2018. Oversight of CCOs by the chief marketing officer dipped again, from 14% in 2018, to 8% in 2019, to just under 7% this year. A similar number to 2019 report into the chief operations officer: 4%, compared to 5% in 2019, while many more of our cohort report into varied functions than last year (15% vs 8%), including titles such as heads of corporate or public affairs, chiefs of staff, deputy CEOs and chief transformation officers. None of our influencers this year report into the chief finance officer, compared to 5% in 2019.

What is the overall PR budget at your organisation?

Our Influence 100 now control PR spend of more than $4.2bn – down a not-surprising but significant amount from last year’s total of $4.8bn. This is still up on 2018’s $3.3bn, although much less than the $6.5bn recorded when this survey launched in 2012.

There was something of a drop in the number of our CMOs and CCOs who said they were managing PR budgets of more than $100m: 24% compared with 31% last year, although that’s still well up on 11% in 2018. Those who peg their budget between $75m and $100m was slightly up from to 6% to 7%, while but those handling a budget of between $50m and $75m levelled at 14%, from 17% in 2019. 

A lot more respondents – 55% – now manage a PR budget of less than $25m, which is comparable with 2018 but a hike on the 40% figure last year. 

Has your budget been cut as a direct result of Covid-19? 

We also asked an open-ended question about how much budgets had increased or reduced by for 2020. The majority said budgets had been flat, and a healthy number said budgets had increased by between 5% and 50% for the year, but a large proportion said 2020 budgets have been lower on 2019, from 5% cuts to a halving of the previous year, with a notable number saying 2020 was around 20% down on 2019.

To capture how much of this was down to the financial impact of Covid-19, we specifically asked if PR budgets have been cut this year as a direct result of the pandemic: 56% said they had.

On which areas do you expect to spend most next year?

PR budgets include a wider range of activities than ever. The areas that have swallowed up most spend this year and are anticipated to be major areas of spend next year include corporate reputation (75%, compared to 79% last year) and traditional public relations (66%, down from 71% last year. In terms of social media, 36% said they expected paid social to be a significant area of spend, up from 29% last year and 19% in 2018, while the number who said they would be spending a serious slice of their budget on organic social leapt from 29% to 55%, the biggest increase this year.

Other areas of note were crisis management – a priority area of spend for 30% of respondents – and employee engagement and change management, which will be a major area of spend for 35% of respondents. 

Other priority areas, all up from last year, included content development (up from 38% to 45%), data and analytics (up from 24% to 36%) and measurement and evaluation (up from 26% to 36%). The only area where a significantly smaller number of respondents said it would be a priority was advertising, which dropped from 26% to 16%. 

How confident are you about the resilience of the sector you operate in, post-Covid-19?

Despite something of a wobbly picture on the budget front, confidence among our CMOs and CCOs was perhaps higher than expected: 39% said they were extremely confident about the resilience of the sector they operate in and another 45% said they were very confident. Only 16% sounded a note of caution by saying they were somewhat confident, and none of our respondents said they lacked all confidence in the future of their sector. 

Team

The number who manage teams of more than 100 people rose again this year, from 38% in 2018 and 41% in 2019 to 49% this year. The number managing teams of 50-100 was down from 19% to 13%, while 16% manage a team of 21-50, compared to 14% last year, and 22% have a small in-house team of 20 or less, compared to 27% last year.

There was huge variety in the extent of team flux: while the overwhelming majority reported their teams had stayed the same size, there were plenty of respondents where headcount had increased by 5%, 10%, 20% or even doubled. However, a similar number said their team had shrunk, by anything from 2% to 25%, compared to 2019. 

We also asked specifically for the impact on teams of Covid-19, both in terms of being placed on leave or furlough, or layoffs/redundancies. The results were perhaps a little more reassuring than expected at this stage: 91% of respondents said none of their team had been placed on leave or furloughed, and the remainder said the number amounted to less than 5% of their team.

There have been redundancies in 16% of respondents’ teams: of these, 7% said less than 5% of the team had been made redundant, and only a handful said a greater proportion had been laid off. One respondent, however, noted that they had lost more than 40% of their team as a direct result of Covid-19. 

Agencies

 

For which of the following hiring decisions are you the primary decision maker?

The Influence of our 100 this year again ranges much further than public relations, in terms of being primary decision makers beyond PR agencies, where 98% are responsible for hiring (up from 92% last year). This year, 64% of respondents were the primary decision-maker for digital/social agencies (up from 53% last year) and 32% said the same of advertising agencies, down slightly from 36% last year. Other specialist agencies managed by our cohort included brand and design, transformation and sustainability, public affairs, financial, content, media buying, measurement, research and events.

How much does your organisation spend on PR agencies?

Agency spend appears to be up, with 28.5% spending more than $20m on their PR agency partners, compared to 17% last year. The same proportion spent between $2m and $10m, while 14% had a PR budget of $10m-$20m. At the lower end, the number of respondents spending less than $1m was way down on the previous two years: 5% compared to 17% in 2019 and 20% in 2018.

Which best describes your approach to using PR agencies?

Only 2% of our CMOs and CCOs say they have one global PR agency of record, down from 6% last year. The number who said they have a global AOR, but also work with other firms was 39%, around the same as last year. There was a rise in the proportion of respondents who use regional agencies of record, from 9% to 14%, and a fall in those who have separate agencies in each market, from 17% to 11%. The trend for selecting firms on a project basis is rising again, with 34% saying this was their preferred way of working with agencies, compared to 23% last year. And compared to last year, when 6% of our influencers said they did not use PR agencies, this year every single respondent said they used at least one PR agency.

Which has been the greatest benefit of working with a PR agency this year?

Not surprisingly, there has been a shift in the perceived value that agencies bring to their clients this year, with a leap in the number of CCOs and CMOs who said they most valued agencies’ strategic counsel, from 13% last year to 26% this year. There was an even bigger corresponding drop – from 36% to 19% – in the number of those saying creative thinking and new ideas had been the greatest benefit of working with an agency in the year of the pandemic. And there’s even more of a focus on tactical and execution support, up from 43% to 49%.

How has remote working affected your relationship with your agencies this year?

How has Covid-19 impacted the expectations you have for your PR agencies, despite any recent budget changes?

We added two new lockdown questions this year to gauge how relationships and expectations have shifted during the pandemic. Showing how quickly the industry has adapted to the new remote working environment globally, 64% of our influencers said there had been no change to their relationships with their PR agencies, and a notable 18% actually said it had improved. However, a not-insignificant 11% said their relationships with their PR agencies had suffered because of home working. Other comments were largely positive, including: “Operations are different, but relationships remain intact”; “Tighter collaboration”; “The work that can be done has changed but the relationships are unchanged.” There were a couple of less positive points made, however, such as: “Think agencies got scared, justifiably, and have been less proactive”; “It has not suffered but building trust is more challenging through remote working.”

In terms of expectations, it was a less stable picture, with only around a third of respondents (36%) saying there had been no change to what they expected from their PR agencies, and a tiny proportion (7%) saying expectations had decreased. The biggest slice of our cohort – 40% – said expectations had grown slightly and 17% said their expectations of their agencies had grown “dramatically” throughout lockdown. 

How do you hire a PR agency?

How involved is your company's procurement function in the hiring of your PR agencies?

The number of CCOs and CMOs preferring to hire agencies via a traditional RFP pitch process was slightly down this year, from 37.5% to 32%, while the number preferring to run an invitation-only process was up slightly from 50% to 52%. The number of respondents who prefer to hire an agency they have previously worked with was up from 3% to 9%, and those using referral networks was down slightly from 9% to 7%. 

There’s much talk about procurement’s increasing involvement in the pitch process, so we again asked our in-house influencers what role the procurement function in their organisation played in the hiring of PR agencies. The proportion who said procurement was somewhat or very involved was down from 83% to 75%, but within this, those who said procurement was very involved rose from 37% to 50%, while the number who said they were somewhat involved dropped from 46% to 25%. Those who said the procurement was not at all involved in pitches, however, rose sharply from 14% to 25%, while the number who said procurement has the final sign-off on agency hire dropped from 3% to zero.