Disruption in public relations
A landmark survey predicts significant growth for public relations in the next five years but identifies critical issues along the way.
I've taken a couple of days off to travel around the north of England and Scotland.
I printed a copy of the Global Communications Report 2016 to read en route. I suggest you do the same. Mine is now well thumbed.
The report was launched at the World PR Forum in Toronto, Canada, this week. It takes a five year view of the public relations business through to 2020.
It's been produced by the University of Southern California's Center for Public Relations and The Holmes Report.
"The pace of change in public relations has never been faster than it is today, but at the same time, it will never be this slow again," said Paul Holmes, publisher and CEO, The Holmes Group.
"The industry has never had more opportunity, and has never had more challenges. Growth potential is unlimited but competition is intense," said Fred Cook, director, University of Southern California's Center for Public Relations and CEO, Golin.
The international analysis is based on an online survey with 1,222 practitioners who self-identify as agency or communication leaders.
Here are some of the key signposts to the future from the report.
#1 Agency growth
The agency business will grow from its current estimated size of $14 billion to $19.3 billion over the next five years. Headcount will increase by 26% over the same period.
#2 In-house growth
Absolute numbers for the size of the in-house market aren't tracked by The Holmes Report but figures provided by leaders suggest that budgets will grow by 13%, and headcount by 11%, through to 2020.
Agency and in-house leaders believe that future growth will be driven by content creation (81%), social media (75%), and brand reputation (70%). Media relations will continue to rank highly. Surprisingly paid media ranked last (18%) in a list of 18 drivers.
#4 Representing publics
Around half of respondents reported that their ranks are not as diverse as their clients' or stakeholders. Both agency and in-house groups cite lack of diverse talent at senior and entry levels as the primary challenge.
#5 All change
Change is seen as inevitable in the public relations business by almost all respondents. The adoption of new technologies is perceived as the biggest challenge. The increasing demand for content creation, new channels and the use of data are also seen as key issues.
Public relations leaders say the retention and recruitment of top talent are the major obstacles to growth. Paul Holmes believes that the business needs to stop cannabalising itself and look to research and analytics, advertising, marketing and law. There are early indications that this is the case according to the report.
Public relations continues to place craft ahead of technical skills. Writing (89%) leads the list of competencies for a public relations practitioner, followed by strategic planning (84%), verbal communications (80%), analytics (62%) and SEO (41%).
#8 Media integration
Around a third of the average in-house department budget is being spent on earned media. 32.1% is being spent on owned media such as blogs and websites, 17.0% on paid, and 16.4% on social, or shared media. The shift away from earned media is expect to continue over the next five years.
By contrast, agencies report that more than half of revenue is derived from earned media, followed by 20.5% from owned; 17.2% from social or shared media; and 9.3% paid.
#9 Agency client relationships
The majority (55%) of client respondents expect their reliance on outside agencies to remain about the same over the next five years; 31% expect to become more reliant on external support; and 14% less reliant.
Strategic insight and creative thinking are the primary reasons for recruiting external support.