Insights: Budgets, Teams & Agencies

Structure & Budgets 

The number of our Influence 100 reporting to the chief executive or chair of their organization is down to 61% this year from 74% last year; this is probably partly down to our shift in focus to communication and corporate affairs leaders rather than CMOs. Similarly, oversight by the chief marketing officer was up from 8% to 14%, and 5% report to the chief corporate affairs officer or equivalent. Around 16% of the cohort report into other functions, such as chief people officer, global impact officer, chief of staff or chief strategy officer. As per last year, 3% report into the chief operations officer, and none of the 100 report into either the chief finance officer or the head of legal.

This year, from responses to our survey of the Influence 100, we estimate that our cohort control PR and communications spend of just under $4 billion, up 8% from $3.7 billion last year, despite widespread concerns about slashed budgets across the industry – although, as ever, we must caveat that the size of the companies represented in the survey, and the remit of each influencer, changes from year to year so it’s not possible to make a direct comparison.

This figure is conservative, as it was calculated using the lower end of each bracket. If the midpoint is taken, last year’s total budget for the Influence 100 would have been $ 5.2 billion, and this year’s budget would be $5.5 billion – a rise of 11%.

There was a rise in the number of our Influence 100 managing budgets of more than $100m: last year the figure was 17%, down from 25% in 2022 and 27% in 2021, and this year it’s up to 20%. The proportion of the cohort managing between $75 and $100m also rose from 10% last year to 13%, although the next budget bracket, $50-$75m, saw a drop from 13% to 9%.

The number managing budgets of between $25m and $50m dropped from 10% to 7%. At the lower end, those managing a PR and communications budget of $10m-$25m was down from 30% to 22%. The percentage handling budgets under $5m was up a little from 13% to 15%, and those managing $5-$10m was also at 15%, up from 7% last year.

Overall, of the respondents who revealed changes from last year, about an equal proportion said their budget had either remained flat or increased this year, by anything from 2% to 20%. A handful said budgets were down, mostly by 10% or less, although a couple said their budgets were down by 15% or as much as 30%.

There are a few clear spending priorities ahead for our Influence 100. Corporate reputation remains the top budget priority, down two per cent from last year to 66%, while in joint second place are content development and marketing (up 4 points to 54%) and paid and organic social media, up 7 points to 54% saying it’s a priority: closer to the 60% we saw in 2021.

The biggest drop this year is executive positioning and thought leadership, down 23 points to 36% of our cohort saying it’s a top priority, while employee engagement/change management is also down seven points to 46% – although this is still the fourth biggest priority – and measurement and evaluation is also down by the same amount to 34%.

Perhaps the most notable spending priority is a new category we introduced this year: technology, innovation and AI, which goes straight in at 31%, at the same level as measurement and evaluation.

Data and analytics has dropped two points to 36% seeing it as a priority – although it remains in the top five – while media relations has dropped down to 34% from 41% last year. A focus on corporate social responsibility/ESG has risen a little this year: it dropped from 59% in 2022 to 32% last year, and is now at 34%.

Other areas of note include influencer marketing and sponsorship – we’ve split this out for the first time this year to give a clearer picture. Last year, these combined areas were a priority for 26% of the cohort. This year combined they amount to 35%, which would put them in the upper half of the table, but broken out it’s clear that influencer marketing is a greater priority of the two: 20% compared with 15% for sponsorship.

Crisis management remains a priority for 24%, up from 21% last year, while there’s been a drop in those who see advertising as a priority – down from 15% to 7%. This might partly be a side effect of the Influence 100 deliberately including more CCOs and fewer CMOs this year, but it’s worth noting that 29% of our cohort are responsible for hiring advertising agencies, which is actually up from 25% last year.

Experiential and events are a priority for 19% of our influencers, up from 14% last year. Only two areas were mentioned in the ‘other’ responses – corporate social responsibility reporting (CSRD), which arguably comes within the CSR/ESG category – and “company narrative”. CRM – which has always been bottom of the list – dropped from 6% saying it was a priority last year, to zero this year.

Before 2022, we’d seen a steady rise in the number of our CCOs and CMOs managing teams of more than 100 people, but that year the trend stalled, decreasing slightly to 48%, and last year it dropped to 41%; this year it’s up slightly to 43%. The number managing teams from 51-100 was also up a little, from 19% to 23%, while those with small teams of 1-20 dropped from 19% to 13%. Those managing teams of between 21 and 50 people stayed roughly the same, at 23%. 

Around 52% of respondents said their team had stayed the same size as last year – a far greater proportion than last year’s 34%. A further 37% said their team size had increased, by between 5% and 25%, with a couple of outliers saying their team size had grown by 30%. Only 9% said their team had shrunk (compared to 15% last year) – by between 3% and 20%. 

The post-pandemic working model appears to have stabilised. When asked about where they expected their teams to work, hybrid working remained the norm for the overwhelming majority – 82%, the same as last year, compared to 92% in 2021. In 2022, only 7% said their teams were back in the office full time, but this rose to more than 18% last year and has stayed the same this year. And while, again, none of our respondents said they had a completely remote working model, the number who said their teams were mostly remote remained at 3%, compared to 9% in 2022.

Agency Spend, Hiring & Relationships

Our Influence 100 have a say over much more than just public relations: while 95% are responsible for hiring PR agencies, most of the respondents are also the primary decision-makers for digital and social media agencies, up to 66% from 58% last year. The number responsible for hiring advertising agencies, as mentioned above, has risen from 24% to 29%. Other agencies managed by 23% of our cohort include specialists in research, analytics, measurement and intelligence; misinformation; strategic, financial and political comms; polling; talent; media planning; and events and experiential. 

Again, despite the continued and widely-reported downturn in agency fortunes, our in-house leaders say their agency spend is looking more healthy than last year, when only 17% said they were spending more than $20 million a year on PR agencies; this year it’s back up to 25%.

A further 16% are spending between $10 million and $20 million, compared to 20% last year. At the smaller end, only 12% of respondents are spending less than $1 million this year, significantly lower than 28% last year, when lower-end budgets were most prominent. Those with a spend of $1 million to $2 million doubled from 7% to 15%. However, this year the biggest slice of the pie was those spending between $5m and $10m, who jumped from 10% of respondents for the past two years to 21%. Also in the middle of the table, 12% of our influencers are spending between $2 million and $5 million on agencies, down from 17% last year.

In terms of the Influence 100’s approach to using PR agencies, the downward trend of having one global agency of record remains extremely low this year, down to just under 2%, compared to 3% last year. The number of respondents working with firms on a project basis has remained high, on the other hand, at 37%, consistent with last year. The percentage with a global AOR who also work with other firms dropped considerably, from 41% to 27%, while the proportion with separate AORs in each region more than doubled, from 6% last year to 15% (this was 14% in 2021 and 12% in 2022), and those with different agencies in each geographic market was 19%, up from 16% last year.

The number of CCOs and CMOs who prefer to hire agencies via a traditional RFP pitch process was another stable figure, at 53%, the same as last year, representing a plateau after several years of increases from the 32% who preferred traditional pitch processes in 2020. Meanwhile the number who prefer an invitation-only process was notably up after years of decline, back up to almost 30% compared to 22% last year – this was 52% in 2020. The number of respondents preferring to hire an agency they’ve worked with previously dropped a little to 7% from 8% last year, while those using a referral network dropped from 17% to just over 10%.

We also asked our influencers what role procurement plays in their organization when it comes to hiring PR agencies. Last year, after a few years of almost none of our cohort saying procurement had final sign off on agency appointments, this rose to 6%, and it’s up to 7% this year. In more cases than last year, procurement is somewhat or very involved – up from 81% to 85% – and the number of comms chiefs who said procurement is not at all involved in agency contract sign-off continues to fall, from a fifth two years ago, to 19% last year, to only 8% this year. Is it possible that this shift to greater involvement by procurement departments is contributing to reports by some agencies of slow decision making/sign-off or pitch processes ending in no-hires or even ghosting?

When we asked our Influence 100 how satisfied they are with their PR agency partners, the proportion that said they were “very satisfied” – which has been on a downward trajectory since the pandemic – has now dropped to less than a third of clients: from 45% in 2021 to 37% in 2022, to 33% last year to just shy of 29% this year. Those who said they were reasonably satisfied rose from 67% to 69%, while 2% said they weren’t at all satisfied, up from zero last year.

This ongoing decline in client delight with their PR agencies may well be a contributor to some significant changes in the communications services our Influence 100 said they would be making an effort to bring in-house. Overall, only 9% of our cohort said they had no plan to in-source any PR and comms services currently handled by their agencies, down from 27% last year. A couple of respondents noted that they already handle most PR services in-house, but not enough to explain such a sharp rise in intention to in-source.

Top of the list this year is media relations – rather concerningly, since this is still the bread-and-butter of agency land – with a sharp jump from less than a quarter of respondents last year (24%) saying they may bring this in-house to 38%.

Last year, the only service area that more than 30% of clients said they would be looking at insourcing was content production, at 42%. This year, this figure has dropped to 36%, but as well as media relations there’s another key area that communications leaders are anticipating bringing in house: data, analytics, measurement and evaluation.

Last year, 21% said they may bring data & analytics in-house, and 15% said the same of measurement & evaluation – so 36% for these combined areas of insight. In sharp contrast, this year 31% are looking to bring data & analytics in-house (10 points up) and a further 29% said the same of measurement & evaluation (14 points up) – so combined, that’s 60% of the Influence 100 who are intending on handling these areas in-house in the future, rather than via their PR agencies.

There was also a smaller rise in the number of comms leaders who said they would be making an effort to bring influencer marketing in house, up from 6% to 10%. The only two areas where there was either no change or a drop in intention to insource were creative idea generation (level at 12%) and social media, which 26% are looking to bring in-house, compared with 30% last year, when it was second on the list after content production.

Around 10% of respondents this year are looking at bringing other specialist services in house, with examples given including employee engagement and AI.

Tactical and execution support remains the biggest benefit to working with a PR agency for 43% of our influencers, down a little from 46% last year. Strategic counsel, meanwhile, was named the biggest benefit to working with a PR agency for 26% of our influencers, a marked dip from 34% last year but still up on 20% in 2021. Creative thinking, however, rose considerably as the biggest perceived benefit for 28% – up again from 11% last year and closer to the 36% who rated creativity most highly pre-pandemic.

Our final question in this section of our Influence 100 survey concerns whether relationships with their PR agencies have been affected by remote and hybrid working. As noted above, it’s clear that the comms industry has well and truly settled into the post-pandemic working model, with 92% of respondents saying their relationship with the agencies had not changed as a result of hybrid working over the past year. The remaining 8% were equally divided on whether their relationships with their agencies had improved or suffered as a result of hybrid and remote working