The evolution of UK PR...

Jane Howard FPRCA

2011

The evolution of UK PR consultancies 1970 – 2010

PRCA Agency Insight: The evolution of UK PR consultancies 1970-2010

PRCA Agency Insight: The evolution of UK PR consultancies 1970-2010 2

Foreword by Francis Ingham, Chief Executive, PRCA

For an industry which prides itself in its writing skills, it is obviously ironic that no readable history of the modern PR consultancy exists.

This work by Jane Howard fills that gap, with a succinct and erudite history of the past forty years of PR consultancy. In doing so, it does our industry a considerable service, enabling us to put into context the vibrant and growing consultancy world we inhabit today.

The growth of PR consultancy over the past forty years has been remarkable and London is one of only two global PR hubs. With our industry second in size only to that of the United States, the history of PR consultancy is the history of a great British economic success.

Over the course of those 40 years, the PRCA has been the voice of the PR consultant. Growing out of a breakaway from the IPR, and created by ten men in a London hotel, the PRCA now represents close on 300 PR consultancies.

Like the consultancy world itself, the PRCA’s course over those 40 years has sometimes been a little erratic –growth in one period has been followed by retrenchment in another. But just as with the consultancies the PRCA represents, the position we enjoy in 2011 is one of strength and optimism.

The PRCA is considerably bigger than at any time in its history, with more than double the number of members it had in just 2007. That is testimony to the resilience and relevance of the organisation, and to the confidence placed in it by the PR community, as by far its most dynamic and effective professional body.

As for the future, the positive evolution of the consultancy will doubtless continue. But whatever form that evolution takes, one thing is transparently true –the rise and rise of the PR consultancy looks set to continue.

Francis Ingham PRCA Chief Executive

About the author

Jane Howard has been working in UK public relations consultancies for 30 years. She’s been involved with organisations that are large and small, national and international and has participated in public and limited company boards.

3PRCA Agency Insight: The evolution of UK PR consultancies 1970-2010

Contents

Foreword by Francis Ingham, Chief Executive PRCA 2

Introduction 4

From tactical media relations to strategic reputation management 5

“Agency”or “consultancy” 6

The UK economic context 7

Education and professionalism 8

Consultancy operating principles and business types 9

The shape of the UK PR consultancy sector 11

1970 to 1979 - creating a voice UK Public Relations consultancy 12

1980 to 1989 - the PR consultancy as a source of editorial expertise 15

1991 to 1999 - PR as part of the marketing mix 18

2000 to 2009 - the PR consultancy is more than “marketing support” 21

Continuing consultancy evolution 26

References 27


Introduction

This paper charts the evolution of UK public relations consultancies since the formation of the Public Relations Consultants Association (PRCA). It assesses their growing impact, looks at business paradigms and reviews how they have adapted to changing economic and business environments.

Establishing an association for consultancies demonstrated that by the late 1960s, not only the practice but the business of public relations had reached a level of maturity and self-confidence.

Practitioners believed that demand for their skills was robust enough to form the basis of a company where the majority of income would derive from the selling of executive time. They wished to be standard-bearers for their occupation, to share best practice and to attract the interest of prospective customers.

Ironically, it was the incorporation of the Institute of Public Relations (IPR) in 1963 which required membership to be only of individuals that created the need for a separate body to represent consultancy interests. Several years and many discussions later, the PRCA was founded.

Public relations consultancy is now a dynamic and thriving sector, of considerable economic and cultural importance. It is a catalyst for professional development and the repository of much outstanding practice. The interplay amongst consultancies, consumerism and changing expectations of UK businesses, set against the backdrop of the UK’s economic growth, is considered in the following pages.


From tactical media relations to strategic reputation management

On October 28th, 1969 the ten founding members of the Public Relations Consultants Association (PRCA) met in the Westbury Hotel, London to create the formal structures of their trade association. Articles of Association were confirmed by the attending solicitors and at the next meeting, held a couple of weeks later, the officers of the Association were appointed and its committee structure agreed. Members had to be established public relations companies and could not be simply a division of an advertising agency.

The organisation grew rapidly. By 1972, it had 55 members whose combined subscriptions amounted to £8,500. Although combined public relations consultancy fees for this emerging sector were not discussed, it was noted that the UK Institute of Practitioners in Advertising (IPA) subscriptions for the same year were £100,000, making the PRCA just under one twelfth of the size of this organisation.

It was not till 1979 that the size of fees for public relations sector was assessed. A PRCA Board meeting from that date cites the “£12 million-plus PR fees, which we believe exists at present in the UK (and) the PRCA members represent 75 per cent of this.”

PR Week in its annual review of the top 150 PR consultancies said that in 2008 they employed a total of 7,990 staff. This compares with an estimate of 8,604, from research commissioned in 2005 by the Chartered Institute of Public Relations (CIPR), “The Economic Significance of Public Relations”.

Despite the reporting restrictions arising from the 2002 Sarbanes-Oxley Act, which prohibits information that could “impede, obstruct, or influence,” PR Week estimates that the total amount billed by the top 150 UK consultancies in 2010 was £814 million. If this is, indeed the case, it shows an increase of over 90-fold from the 1979 Association estimate of consultancy fees.

A view of the overall PR sector is provided by The Bellwether Report, which looks at PR in the context of the marketing sector as a whole and places total UK annual PR turnover at around £2,430 - £2,835 million.

See Chart 1: total estimated PR spend.

All these estimates show that PR consultancies have grown and thrived during the last 40 years and in the following pages some of the main factors shaping this evolution are considered.

During the years since the PRCA was founded, consultancy PR changed from providing a niche media specialism to becoming a recognised discipline, at the heart of strategic reputation management.

Source - BellwetherNote: “0” denotes a sector that was not, at the time, researched by Bellwether

Chart 1: Total estimated PR spend

Annual total advertising spend: £billion 2004 2005 2006 2007 2008

Media Advertising 37 33 32 29.3 30.3

Direct Marketing 23 27 28 25 24.9

Sales Promotion 14 12 12 9.5 9.2

Internet 3 4 5 8.7 9.9

Market Research 0 0 0 6.2 6.4

Events 0 0 0 8.6 7.8

PR 0 0 0 8.5 8.1

All Other 23 24 23 4.1 3.4


“Agency” or “consultancy”?

Dictionary.com defines agencies as providing “some service for another” whereas consultancies are said to provide “expert or professional advice in a field.”

The commonplace use of both these terms to describe the work a PR company undertakes reveals the PR sector’s history and its ambitions.

Agency was a natural descriptor for the early PR companies. They were often staffed by former journalists, who had contact with press agents in government, commerce and the media and they brought this experience with them. Sometimes the press agents joined the consultancy.

As was usual with publicity of the time, the information flow tended to be one way. Its quality was important, but audience feedback was not much considered.

Also, these PR companies were often owned by advertising agencies, called such initially, because they were agents for purchasing advertising space on behalf of their clients. The advertising agency parent rarely gave its subsidiary the more expert title.

Other PR companies took their founders’ names as trading titles and avoided the agency or consultancy dilemma.

But the founding companies of the UK PR sector wanted to be seen as experts, providing professional advice. “Consultancy” soon became and remains their chosen description.

The PRCA has used this term for 40 years.


1 GDP is a measure of a country’s overall official economic output. It is the market value of all final goods and services, officially made within the borders

of a country in a year, and is often positively correlated with the standard of living.

The UK economic context

Public Relations consultancies do not predict economic trends, they follow them.

Public Relations consultancy growth reflects how much our life has changed and particularly, how much our national wealth has increased, over the last 40 years.

When the consultancy directors first met to form their trade association in 1969, the UK currency was pounds, shillings and pence. The BBC and ITV had only recently stopped broadcasting programmes in black and white.

Pocket calculators, word processors, personal computers, digital watches and mobile phones had yet to be invented, let alone come into general use.

Per capita income was 17.5 times smaller than it is today and the UK was 22nd in the United Nations ranking of country wealth, whereas it was 13th in 2009.

In 1980 the UK population was 56.33 million and the Gross Domestic Product1 (GDP) was $542.45 billion. In 2009 the UK population has grown to 61.79 million and the GDP to $2183.61 billion.

In our free market economy, competition between companies for a share of this increased wealth has led to a proliferation of products and brands. As the range of available choices increases, the use of PR to influence consumers and businesses has become increasingly important.


Education and professionalism

Initially, aspiring PR consultants were advised by their trade association, “to gain some first hand, relevant experience of industry, local government, or law” for a couple of years before applying to join a consultancy. Or, it was conceded that, “entrants qualify through the secretarial route.” Many existing practitioners had come to PR from journalism or public sector press agencies.

The Communications, Advertising and Marketing Education Foundation Limited (CAM) was established as a charity in 1970 to provide practical education for marketing professionals. It offered a Chartered Institute of Marketing (CIM) diploma which contained PR theory in a broad marketing context.

The IPR too, recognised the need for education, although its membership initially, was not restricted by examination. There was a Higher National Certificate (HNC) in Business Studies and a “Communications” A-Level existed.

The PRCA recognised that this lack of education about PR would limit its professional status and in the mid-1980s called on the industry to educate its own talent rather than relying on, “a natural migration from other, allied crafts, such as advertising, journalism and marketing.”

The last forty years has seen rapid growth in the overall numbers of university-educated students, as can be seen from the chart below. See Chart 2: Full time UK undergraduates.

Public relations education had been part of this overall growth.

Of course, not all entrants to the PR sector have vocational degrees, although it is now unusual to find consultancy employees who do not have some form of undergraduate qualification. Postgraduate awards are also common.

In addition, there is a wide range of training provided by external suppliers, by the industry associations and in-house, among departments and consultancies.

The CIPR both provides and requires continuing professional development (CPD) as part of achieving its qualifications.

It seems that the call for the sector to educate its own talent was answered.

The University Careers Advisory Service (UCAS) now has more than 230 degree or postgraduate courses entitled, “Public Relations”. The Chartered Institute of Public Relations (CIPR) recommends 43 courses from 27 universities.

800

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Female Male

1970-71 2007-8

Source: Office for National Statistics (ONS)

Chart 2: Full time UK undergraduates


Consultancy operating principles and business types

Consultancies may appear different, but there are core principles which condition how all operate.

The simplest and most critical is the ratio of “employment and operating costs to profit.”

This concept became prevalent in the 1990s, probably as a result of the international PR consultancies employing talented financial directors. It is now an accepted norm. This ratio says that total staff costs should not exceed 55 per cent of overall income; other operating costs should be at most, 25 per cent of total income, leaving 20 per cent of income to be taken as profit. Twenty per cent profitability has now become the minimum expected level of profitability for consultancies that are part of public companies.

This is not easily achieved. In 1990, Kingston Smith W1 began to analyse from PR companies’ year-end accounts a series of performance metrics.

Chart 3 shows how the consultancies with the largest turnovers have fared, on average, within these benchmarks over the last nine years. Total employment costs tended to rise but with the economic downturn, are now falling. Total operating costs have tended to be contained and gradually, average profitability has edged up and is now more than 16 per cent.2

The other core principle which determines how consultancies operate is the type of business organisation they are at any particular time.

Indeed, this reinvention is so entrenched that all main consultancy competitions: the “PR Week Awards”, The CIPR “Excellence Awards” and the “PRCA Awards” annually recognise that year’s “Best New Agency.”

This means that UK PR consultancy managers may be working in one of several, widely different, styles of business. See Chart 4: Ownership of top 20 or 30 (by turnover) UK PR consultancies. This shows the ownership of leading consultancies, indicating how many at any one year are foreign-owned, are UK-quoted or subsidiaries of UK-quoted companies, or are privately owned. It shows how considerable shifts in ownership and therefore business type take place from year to year.

At any one time, the UK PR sector is engaged in a flux of mergers, acquisitions, take-overs and break-aways to create larger, new or start-up businesses. This is particularly true of periods immediately after sector downturns3.

In the 2010 PR Week Top 150 Consultancies issue, there are 30 “new entries” in the 100 to 150 category. New entrants at this level of fees – up to £1, 600,00.00 - are generally recent start-ups. This is a sector where change is endemic.

Chart 3: % employment costs, operating costs and profit per head of the top 30 PR consultancies

Source: Kingston Smith W1: The Financial Performance of Marketing Services Companies, 2000 to 2006

Year % operating % employment % profit costs costs

2000 35.4 54.9 9.7

2001 32.6 53.8 13.8

2002 31.6 57.3 11.1

2003 28.5 58.4 13

2004 28.7 61.4 9.9

2005 29 60 11

2006 26.9 59 14.1

2007 25.3 59.2 15.5

2008 24,5 59.2 16.3

2 Financial PR consultancy profit margins generally exceed this level, as do those of corporate, technology and healthcare specialists. Generalists and consumer consultancies may fall below 16 per cent. Source: Kingston Smith W1: The Financial Performance of Marketing Services Companies, 2000 to 2006 3 Source - Kingston Smith W1. 2004 is cited as a “period of restructuring with 17 of the top 30 companies reporting exceptional costs.”


Drawing on Professor Charles Handy’s work on organisational development, David Welling, Orchard Consulting, has identified four typical company types: the entrepreneur or founder model (A); the tasks orientated model (B); the organisation and process model (C) and finally, the professional, “individual as star” model (D). See Chart 5: The four classic organisational shapes.

These models each have widely different operating characteristics and they can all be applied to UK PR consultancies. Managers will be working within the constraints and advantages that each business type brings. They will be competing amongst themselves for the available new talent and business.

An interesting point to note is that while no single set of organisational characteristics guarantees creative success, diversification by specialist offering and by geography, tends to make consultancies more robust. Kingston Smith W1 consistently reports that group-owned PR consultancies are more profitable than independents.

There are currently only nine independent PR consultancies among the top 40 by fee income4. Of these, one has a fee income of over £25 million and two have a fee income around £15 million. The other six are all below £10 million. Generally, independents tend to be smaller, until they reach a size where they are attractive acquisitions for larger marketing services groups.

Of those 10 companies which met in 1969 to create the trade association, only one, Hill & Knowlton, who commenced business in 1969, exists today.

From the 113 PRCA members in 1985, only four now remain in their original format. In addition to Hill & Knowlton, these are: Burson-Marsteller (commenced business in 1958), Daniel J Edelman Ltd (commenced business in 1952) and Weber Shandwick (commenced business in 1974). All of these are international, three have their roots in the US and three are public limited companies.

Chart 4: Ownership of top (by turnover) UK PR consultancies

Year Foreign UK-quoted or Privately owned subsidiaries of UK- owned quoted companies

1991 5 6 4

1992 5 6 5

1993 5 7 8

1994 5 8 7

1995 4 7 9

1996 4 5 11

1997 4 8 7

1998 5 7 7

1999 5 8 17

2000 12 7 11

2001 13 5 12

Source: Kingston Smith W1: The Financial Performance of Marketing Services Companies, 1991 to 2001

Chart 5: The four classic organisation types

Type A

• Entrepreneur/FounderModel• Greatfordrivingayoungbusinesshard• Spideratthecentreoftheweb• Controlsanddirects• Absenceofformalprocesses• Fittingintothe‘family’iscriticaltojoiners• Poorhorizontalinternalcommunication

Type B

• OrganisationistheGod• Layeredorganisation• Processorientation• Everythingprescribedanddescribed• Riskaverse• Tendencytobureaucracy• Poorverticalinternalcommunication

Type C

• Consultancymodel• Results/Taskorientated• SeniorPartnersbuildaccountable‘micropractices’within

GreaterPractice• Flexibilitytoadaptprocessesandorganisationwithinand

between‘micropractices’• GreaterPracticeholdsswayinashowdown

Type D

• Architects/Vets/BarristersModel• Existential–individualsbiggerthantheorganisation• Organisation(backoffice)existstosupportindividuals• Individualsarepeers–normallyworkingalone

4 PR Week Top 150 PR Consultancies 2010


The shape of UK PR consultancy sector

By the early 1980s the PRCA membership had grown to over 100 consultancies. In 2010, there are over 100 more members. However, retaining existing and attracting new members continues to be challenging.

The number of employees and clients held by those members more than doubled during 1985 to 2004 and both totals continue to grow, despite current recessionary set-backs.

There were over 80 accounts which had annual fees of more than £1million by 2000.

The annual 2010 PR Week “League Table” lists the top 150 consultancies and Charts 7 and 8 show the disparity of fee income between the largest and smallest consultancies

The top 12% consultancies have a larger fee income than the remaining 88%. This roughly translates to the top 20 having a larger fee income than the remaining 130 consultancies.

Source: PRCA Yearbooks 1985 - 2004

Chart 6: Numbers of PRCA members, employees, clients and fees over £1million 1985 to 2004

Year Members Employees Clients Fees over £1million

1985 113 1,942 2,616 13

1989 154 3,856 4,595 37

1990 173 4,145 5,073 38

1994 129 2,982 3,902 39

1995 131 3,274 4,407 46

2000 128 5,824 5,550 80

2004 137 4,433 4,516 N/A

370,000 375,000 380,000 385,000 390,000 395,000 400,000 405,000 410.000 425,000 420,000

Source: PR Week 2010 - Top 150 PR Consultancies

Chart 7: Top 12% and next 88% fee income comparison

Next 88%

Top 12%

2009 Fee Income (£k)

Chart 8: 2009 fee income (£k) for top 150 PR consultancies

Source: PR Week 2010 - Top 150 PR Consultancies

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2009 fee income (£k) for top 150 consultancies grouped by decreasing 10% totals


1970 to 1980 - creating a voice for public relations consultancy

An emerging sector, growing in size and confidence, struggling and succeeding in an uncertain economic environment.

The ten individuals who inaugurated the PRCA in October 1969 established the first collective record of public relations consultancy in the UK.

Of course, many consultancies already existed. The trade association’s records show that, of its 1980 membership, ten public relations consultancies were set up in the 1950s with 32 being created in the 1960s and another 31 in the 1970s. See Chart 9: Number of consultancies founded 1951 to 1980.

The concept of a communications consultancy sector had not, until then, existed. As one senior figure put it, “there was no body of academic work, no professional or social recognition.”

This lack of recognition is understandable given the many problems that British business faced at this time; it had urgent issues to deal with which often did not include communications. Britain was gradually and often painfully adjusting itself to a diminished world status. Export markets were changing and the economy was shifting towards one based on services rather than the former industrial and manufacturing origins. National outputs had been declining, relative to other leading nations, for some time.

Historian Jeremy Black says, “This contributed to a sense of national malaise in the 1970s, which also owed much to the very high inflation and to a feeling that the country had become ungovernable, as strikes by coal miners led to the failure of government policies on wages.” The early 1970s are often remembered for strikes and the three-day week, the late 1970s for “the winter of discontent”.

Most UK academics had yet to consider communications. There were a few publications and articles on the subject published by practitioners, and a guide published by the Institute of Public Relations6, but little awareness of value of public relations as a business tool by those outside the sector.

This is evidenced in “Business Growth”, published in the late 1960s. The editors were from the University of London, one was an industry specialist and Government advisor, the other an economist. The book, which purports to give cutting edge advice, contains no chapters, sub-sections or even references to either communications or public relations. However, “PR manager” as a functional title, does appear in the two of organisational charts of the several businesses described, but the roles are either junior or without executive authority.

Following industrial unrest, rising inflation and unemployment, Britain was nicknamed the “Sick man of Europe.”

6 The predecessor of the CIPR

Chart 9: Number of PRCA member consultancies founded 1951 to 1980

Source: PRCA Yearbook 1980

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7

6

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3

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1

0

1951

1952

1953

1954

1955

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1979


The Government also, had yet to understand the benefits of professional communications. The Central Office of Information7 (COI), now the UK’s biggest purchaser of communications, then did not employ PR consultancies.

A consultancy head, on behalf of the sector, asked the COI to “set aside what seems to be a long-standing and witless prejudice against the retention of Public Relations Consultancies.” He went on to say that, “this situation is surely ludicrous”.

Indeed, marketing in general was often perceived to be a drain on company resources. There was a residual snobbery and deference to amateurism in post-War society which sometimes considered it “un-British” or “inappropriate” to promote one’s goods and services.

However, once established the PRCA grew rapidly. A specimen consultancy-client agreement was prepared, a code of consultancy practice followed and research amongst marketing directors on their usage and attitudes to public relations consultancies was commissioned.

Not all initiatives worked. A training venture and a marketing brochure, “PR Consultancy in the 1970s” were discussed but not progressed.

The difficult industrial relations that characterised the 1970s prompted some managers to seek more professional help in improving their communication techniques and this led to a growth in consultancies that specialised in community relations, industrial relations and environmental issues. A forum on corporate social responsibility was held in 1974 as a publicity exercise and means of showcasing consultancy services.

Government relations had always been an important area of expertise and the influence of consultancies was

acknowledged by the Select Committee on Members’ Interests, which, in 1969 published a report that was “almost entirely devoted to the problems arising from relations between MPs and PR consultancies.” The PRCA was invited to submit evidence to this Committee in the early 1970s and its work on creating a code of practice and professional, contractual basis for client relations appears to have assuaged concerns, as a 1974 Report from this Committee focuses attention on public relations consultancies that were not trade association members.

However, the level and extent of consultancy influence of MPs and peers remained a concern and in the mid 1970s the PRCA was invited to submit evidence to the “Royal Commission on the Standards and Integrity in Public Life” chaired by Lord Salmon.

Many industry and trade boards, created post-war for public education, remained and were reliable purchasers of consultancy services. In addition, international brands, familiar with US promotional techniques, employed external consultancies. At a national level, the manufacturing decline was matched by a rise in the services sector, bringing opportunities for new types of PR accounts.

In 1973, Britain joined the European Economic Community, creating both the need and an opportunity for, government and EEC-relations campaigns for those consultancies which provided them.

During the mid 70s, significant supplies of oil were discovered in the North Sea, off the coast of Scotland, bringing a boost to local and national prosperity plus the need for energy and environmental communications campaigns.

So, although inflation was high and consultancy managers were often unable to increase client fees as much as they wished, these were productive years for the leading consultancies.

The early consultancies operated in production-led rather than marketing-led business environments where the value they could contribute was not generally understood.

The Association chairman in 1975 said it has been “a remarkably satisfactory year” and in 1978 he said, “Although 1976 had been one of the most difficult years in Britain’s post war history, public relations consultancies had for the most part, not only held their own, but had managed to expand their businesses.”

Consumer and business to business media relations were the mainstay of consultancy income.

7 This is ironic, because as Jaquie L’Etang points out in “Public Relations in Britian” the COI, post war, took on many of the functions of the Ministry of Information, including disseminating information.


Businessmen were becoming more aware of the value of public relations as a cost-effective tool for improving communications, both their organisations and for the promotion of goods and services.

The core consultancy business was predominantly national, local and specialist print media relations, based on personal contacts with journalists, sustained through an understanding of clients’ products and services and how these could enhance consumers’ lives. “How to” information dealing with new inventions and new experiences, whether in preparing foods, tasting drinks, selecting household goods and appliances, cars or holidays, was popular.

Microwave cookers and VHS recorders became generally available and towards the end of the 1970s mobile phones and the Walkman, a personal tape music player, were invented, forming the foundations of the consumer electronics and technology sectors as we recognise them today.

Of the three UK television channels, only one relayed advertising, but there was no programme sponsorship: commercial radio was in its infancy, so broadcast media had yet to emerge as an important channel for public relations consultants.

The UK national media was based in London and so were most of the PR consultancies, especially the large ones. “Large” at this point, meant 30+ employees. The Association’s fee bandings give a picture of the size of client fees. In 1974, a “small” consultancy earned total fees less than £25,000, a medium consultancy less than £250,000 and a large earned above this level.

It was only towards the end of the 1970’s that consultancy principals thought they should set up an “Out of Town Group”. Regional reach was yet to become an important influence on consultancy development.

Consultancies were organised around their clients’ and the media interest, grouped then as many are today, into specialist teams of executives and their secretaries or administrators. In common with other offices, public relations consultancies employed secretaries to executives on a 1:1 or 1:2 ratio.

The mail room was usually the only non-client facing department and here captioned photographs, press releases and samples were sorted and packaged to be sent to the press. Teams of courier bikes waited outside consultancy offices to deliver urgent items. For non-urgent items, one of the several daily postal collections and deliveries would suffice.

Fees still struggled to keep pace with inflation, but better recording and billing of executive time increased consultancy profitability.

The Directors General of the Confederation of British Industry (CBI) and the Institute of Directors (IOD) are quoted at the PRCA’s 1979 Annual General Meeting as paying tribute to the contribution public relations can make to the “economic health and stability of the country.”

Although the word processor was invented in 1972, for most of this decade, press releases were prepared on electric type-writers, arranged with several sheets of carbon-paper for additional copies Once perfect, it was usually faxed to the recipient. Corrections and alterations generally required a re-type.

Consumerism, as an expression of identity and a significant leisure-time activity, grew.

By 1980, records show that UK public relations consultancies were that year retained by more than 2,000 clients.


1980 to1989 - the PR consultancy as a source of editorial expertise

A time of consultancy growth, consolidation and specialisation in a context of privatisation, business deregulation, pressure group activity and growing environmental awareness.

In 1980, total annual fees from the PRCA 113 member consultancies were estimated to be £25million.

The election of the Thatcher Government in 1979 marked a new approach to economic policy, which had positive and far-reaching effects on the market in which public relations consultancies operated. The main state controlled enterprises were privatised, corporations were deregulated, industrial relations reformed and the move away from an industrial business base became accepted.

In the early part of the decade British Aerospace, British Telecom and British Leyland were all privatised. Rolls-Royce and British Steel followed. Later, British Gas, the electricity boards and water boards were split up and sold off.

Rules regarding the promotion of professionals, such as accountants and lawyers, were relaxed. Spending on health services increased. In 1982 Barclays Bank was the first to start opening on a Saturday, showing a new responsiveness to customers. Three years later, NatWest, Barclays and Lloyds announced “free banking”.

David Churchill, consumer affairs correspondent, Financial Times (FT), was employed by the PRCA in 1985 to review research which had been commissioned from AGB Communications amongst 100 “top marketing directors”.

Marketing directors spoke of their “confidence and belief that the profession of PR has matured.” They saw the PR consultancy’s role as creating “a favourable image” and that public relations worked to “support marketing objectives.”

However, Anthony Thorncroft, also from the FT, provided a broader context: “Most companies have never used a PR consultancy; many have little clear idea of what PR can do”.

In 1985, the “FTSE”, the share index of the UK’s most highly capitalised companies, reached 1,000 for the first time and in November the next year, the “Big Bang8” deregulated City share trading.

Corporate PR accounts grew, healthcare communications emerged as a specialism and expert financial PR consultancies managed their clients’ investor relations, benefiting from the boom in stock market listings.

The PRCA attributed its members’ growth to factors including the, “growing complexity of the marketplace, the development of consumer and environmental pressure groups, the rising demand for information, employer and social legislation.” It was common to describe the consultancy role as, “creating the climate of opinion in which the sale can be made”.

As these new organisations sought ways to communicate better with their customers, they looked to professional communicators for assistance.

This revealed that employing a PR consultancy brought the advantages of, “greater expertise and better knowledge of the media than in-house departments.”

The outputs from PR consultancies were not seen to be measurable, but this did not appear to diminish their popularity.

8 “Big Bang” is the term used to describe the deregulation of financial markets. This included such measures as abolition of fixed commission charges, of

the distinction between stockjobbers and stockbrokers and the change from open-outcry to electronic, screen-based trading


“Single Issue” pressure groups became a feature of daily life and everyone watched closely when Greenpeace re-wrote consumer campaigning rules during the Piper Alpha oil rig disaster, which took Shell so much by surprise. Exxon Valdez’s Alaskan oil spillage showed what impassioned communities could achieve when faced with unresponsive, remote organisations. Formerly, blue-chip companies had imagined themselves impervious to the agendas of activists. PR consultants responded to the emergence of “citizen power” with a wide array of crisis and issues programmes and scenario planning.

In addition, general public health scares, such as radio-active fallout from Chernobyl in 1986 and BS9 in 1990 galvanised interest and industry groups into communicating more effectively with their customers and business partners.

Share ownership had increased from seven per cent of the adult population in 1979 to 25 per cent in 1989. For the first time, the parent company became closely associated with its brands and organisations became more accountable for their actions, prompting better communications.

However, the tendency was still for clients to ask for tactical advice, which had not been developed in conjunction with their marketing or business plans.

During this period, PR consultancies were seen to be the pre-eminent source of expertise for managing media relations.

The media environment was stable. Sales of national newspapers hovered at around 2,700 million copies per annum, regional newspapers sold around 2,700 million copies per annum and the number of free newspapers distributed to households grew from 1,600 million in 1984 to more than 2,000 million by 1989.

Annual sales of consumer magazines peaked in the mid 1980s at nearly 1,700 million and fell to around 1,500 million by 1990.

Channel 4 Television began transmission in 1982 and TV advertising expenditure grew consistently, finishing the decade at around £2,000 million per annum. Commercial radio experienced similar growth, with the number of stations doubling from 49 to over 106 at this time.

The PR consultant usually had a range of journalist contacts that could be relied upon to deliver the coverage that clients expected. Relationships were personal and direct, with many ‘phone conversations and meetings, often over lunch. Groups of media were assembled to meet clients for press trips and product launches.

Forty per cent of the marketing managers interviewed in AGB’s Communications survey said that they saw public relations as the “poor relation to advertising”. When referred to by those outside the sector, this research found that PR was often considered to be the “promotion of goods by non-advertising means” or “by subtle means”. It was felt by a majority of respondents that PR had a “fuzzy relationship to advertising.”

Jim Surguy, Harvest Consulting, explained the marketing sector’s perspective on PR consultancies, “In the early Eighties escalating costs for TV commercials made PR activity seem a cheaper, and to some, a more effective medium. So, companies came to appreciate the importance of narrow-casting – reaching audiences through means less all-embracing than advertising. The importance of identifying and communicating to particular target groups became more widely recognised and practiced and this in turn led to a rapid growth in PR consultancies.”

In 1987, Dr Danny Moss of Manchester Metropolitan University, set up the first formal PR qualification, a Masters degree, at Stirling University. He said, “There was a view that PR was best taught at post-graduate level. However, until the mid 1990s, when a European PR research symposium was created, most of the theory came from the US.”

In fact, PR had been taught in American universities since 1922, when the first course was established at New York University.

This was a period when companies recognised that simply issuing literature was not sufficient to maintain their reputation

However, if those in the PR sector were confident, outsiders often had different views.

9 Bovine spongiform encephalopathy (BSE), commonly known as mad-cow disease

17

This comment is a reasonable summary of where the PR consultancy stood then in its evolution. It was growing and developing specialist skills to meet market needs. Its operations centred on the traditional practice of media relations, increasingly tailored to and targeted at, different audiences. Technology – in the form of networked computers – was making processes more efficient, but it was still largely an unsystematic business.

In 1989 an Economist article noted, “Corporate communications10 is now at the same stage in its development as marketing was in the early 1960s. Companies know it’s important but are not sure how to go about it or what skills it entails.”

PRCA Agency Insight: The evolution of UK PR consultancies 1970-2010

10 The Economist used the terms “Corporate communications” and “PR” synonymously


1991 to 1999 - PR as part of the marketing mix

PR secures its position as a key element of integrated marketing campaigns. Privatisations, building societies de-mutualising and the National Lottery launch create substantial PR budgets and the resulting activities show clear returns on investment.

In 1991, Kingston Smith W1 published its first “Financial Performance of Marketing Services Companies”. Public Relations had its own section, confirming its role as part of the marketing mix.

The coal industry, Railtrack, National Power and Power Gen all privatised. The 1990 Budget introduced tax exempt savings accounts11 brinigng new areas for financial organisations to explain and so attract consumers. On November 14th, 1994 the first draw of the National Lottery took place. Earlier that year, the “Keep Sunday Special” campaigners lost their fight to prevent large shops opening for Sunday trading. Shopping became a leisure activity and malls were built in cities and towns. At the end of the decade, the “Millennium Bug12” was much promoted.

Big issue, big idea, multi-audience education campaigns became common and public relations consultancies joined other marketing disciplines in providing integrated communications. Often, campaigns were multinational, with the UK contributing the management and co-ordination.

In the ten years since 1985, the number of PR accounts with annual fees of more than £1million rose threefold to 39. During this period, the turnover of leading consultancies increased from nearly £251 million to more than £451 million.

Management of this scale of resource necessitated greater professionalism in project planning, execution and in evaluation. PR consultancies began to introduce systems to promote efficient working. New technologies, provided by a new range of suppliers who could now make a living from the PR sector, facilitated this trend.

In these more open and transparent client relationships, where the public relations consultancy reported its results alongside other marketing specialists, greater scrutiny was given to results. Measuring outputs moved on from counting cuttings to a wider range of metrics, including audience research.

In 1999, the PRCA launched the Consultancy Management Standard (CMS) to improve industry standards and to differentiate those who achieved it. Agency membership of the PRCA is still limited to those consultancies that hold CMS.

Consultancy Codes of Practice were also created for parliamentary advisors, for health care and for investor relations. The PRCA’s Professional Charter complemented that of the IPR.

General business practice was formalising processes and standards, with Customer Relationship Management (CRM), Total Quality Management (TQM), Investors in People (IiP) and ISO 9000 gaining acceptance during this period.

In terms of the media PR consultancies influenced, the 1990s were a period where, overall, the print media sector was fairly static. Sales of consumer magazines settled at around 1,300 million copies sold annually while sales of both national and regional newspapers began to decline slowly from their 1990 peaks.

However, broadcast media grew rapidly. The money spent on TV advertising doubled and new channels were introduced to take advantage of this. The number of radio stations increased by 150 per cent.

As the media channels available to consumers multiplied, influencing them through advertising was often seen to be disproportionately expensive. PR campaigns became a popular choice because of their cost-effectiveness in reaching and building relationships with a wide range of stakeholder groups.

The UK PR consultancy sector grew to become the second largest internationally, after the US.

There was a growing understanding that business operated with many different and legitimate interests and stakeholders and that communications had to be two-way.

11 These were initially called TESSAs and are now known as ISAs

12 The Millennium Bug was also known as the Year 2000 problem the Y2K problem, the Y2K bug, or simply Y2K. It was feared that the “rollover” from

1999 to 2000 would cause date-related processing problems and that computer systems would crash


The impact of large scale PR campaigns often clearly dwarfed that generated by the concurrent advertising programme. Budget holders, aided by PR consultancy managers, came to question which marketing discipline delivered the best return on investment.

Cranfield Business School professor, Jon White, predicted that the “complexity of the business environment, international developments, changing social expectations regarding economic growth and the role of large organisations will all reinforce the importance of PR tasks in the immediate future.”

He was advocating that PR should be, “an essential part of modern management” and that practitioners should be seen as “management advisors”. This was the period when “strategic editorial” and “management by objectives” became popular concepts with PR consultants.

“Perception management” was a popular consultancy service which usually included the analysis and then ongoing management of an organisation’s internal and external relationships.

Expert financial, technology, consumer, lobbying and corporate consultancies were created, all delivering high margins. For example, by the early 1990s, over 30 specialist public affairs consultancies had been established13. Kingston Smith W1 describes the mid 1990s as a time of the “rise of the highly profitable specialist.”

“In general” Kingston Smith W1 continued, “PR consultancies continue to be rather more successful than their counterparts in the marketing services sector in managing to contain their operating costs in the face of improving gross income.” Throughout this period however, consultancies struggled to stop their staff costs from eroding profits.

Generalist consultancies tended to be less competitive. This was partly because it was harder to charge premium fees for “general” communications and partly due to the shift away from charging clients a mark up for bought in goods and services. Instead, profits had to come from core fee revenues. Correctly pricing and executing PR deliverables was a recurrent problem, shown in the consultancy accounts analysed by Kingston Smith W1.

In 1993, university status was given to polytechnics, assisting the rapid expansion of degree-level public relations and communications qualifications.

By the end of 1994, the World Wide Web had come into general, if not popular, use. While the total number of web sites was minute by today’s standards, quite a number of those that existed were either the precursors of, or the inspiration for, the current most popular services.

Also in 1994, a European PR research symposium was held, assimilating for the first time case studies that were “local” to Europe and were not US-based. The fact that documented examples of measurable activity existed shows that the practice of PR was maturing.

Many more PR practitioners were becoming formally educated. By 1999, there were 18 IPR-approved PR courses at 15 institutions and the next year the IPR set up a CPD scheme.

Paul Holmes of the Holmes Report, has a theory about PR consultancies during this time which illustrates both the opportunities and threats faced by this rapidly growing and evolving sector.

He says, “In the late 1980s, early 1990s PR consultancies faced a choice which they probably didn’t realise or understand. They could become more like advertising agencies or more like management consultancies. Most PR consultancies had a billing model that represented that of a management consultancy. However, many were owned or influenced by advertising agencies. In the end, they collectively veered off in the direction of the advertising agency model, as it was this group that was prepared to invest in them. This decision led to a period of time when PR was subordinated to advertising.”

During this period, PR consultancies began to re-define their roles, beyond media relations towards reputation management.

However, developing technologies and increasing numbers of media encouraged more rigorous campaign planning, programmes which had greater impact and results that could change business performance.

13 Karl Miller, The Growth of Lobbying Consultancy in the UK. 19.1.2006.


He continues: “PR folk got into the habit of giving away thinking, even before they had won the business. They then found it easier to charge for an account executive to make 50 media calls than for a consultant to advise on strategy. They also allowed their objectives to be defined in advertising terms, typically in what is termed ‘advertising equivalents’. But PR is not about equivalency with advertising. It is about building relationships.”

Charging correctly for creative and intellectual content and explaining the value of consultancy outputs are still practices that PR consultancies are trying to establish.

However, the demand for public relations was strong. Looking back over the 1990s, the Director General of the PRCA, reported that, “the Public Relations industry is enjoying year on year growth, nationally and globally, of 20 per cent”.


2000 to 2010 - the PR consultancy is more than “marketing support”.

May 2000 - Internet shares fall. September 2001’s terrorist attacks are followed by the collapse of Enron and WorldCom14. Accountancy and business regulations are tightened. 2004 sees the term “Web 2.0” created. YouTube is launched in 2005 and Twitter the next year. Economic growth resumes and in 2007 the FTSE hits an all-time high. Global recession follows.

Although the period began with many PR consultancies contracting their operations, once economic growth resumed, continued public and private sector investment meant that demand for PR campaigns grew, although not at the high rates experienced in the 1990s.

Businessmen had come increasingly to personify their organisations and while some found this celebrity appealing, most were mindful of Warren Buffet’s comments that reputation takes 20 years to achieve and five minutes to lose.

Not only was the media interested in business life, but the governance reviews of the late 1990s demanded greater transparency and thus better corporate communications. “Comply or explain” the Higgs Review15 told boards, advocating greater disclosure of organisations’ due diligence and risk-control practices.

The COI celebrated its 60th anniversary in 2006 and soon after became the UK’s largest buyer of marketing services.

By 2000, the impact of a vastly increased, professionally-educated supply of public relations practitioners was beginning to be felt by PR consultancy managers. Demand for public relations had indeed grown significantly, but, in fact, most of the growth was outside consultancies.

In 2005, the CIPR commissioned the first rigorous research into the UK public relations sector, which revealed that, “Of the 47,800 professionals, most (82 per cent) are in-house specialists employed directly by companies, government or not-for-profits”.

Comments in the PRCA Yearbook suggest that PR consultancies began to lose their former confidence. For example, the trade association gave itself the specific task of helping to build consultancy esteem, saying that one of its objectives was, “To promote confidence in public relations as a whole, and to act as a spokesperson for consultancy practice.”

Increased interest and scrutiny from the media into business life helped executives recognize that it was worth investing in a professional approach to safeguarding corporate reputation.

PR consultancies increased their expertise accordingly, seeing themselves as taking responsibility for identity and reputation, whether of an organisation, its people, its products or its services.

For the first time, the role of PR consultancies as the source of pre-eminent media expertise was being successfully challenged by in-house pr teams.

Two of the main issues which pre-occupied PR consultancy managers were the quality of service provided to clients and the professionalism with which their consultancies were run. Operating a consultancy profitably had become much more challenging.

14 These were the then biggest corporate failures till Lehman Bros in September 2008.

15 The Higgs review was a report chaired by Derek Higgs on corporate governance commissioned by the UK government, published in 2003.

It reviewed the role and effectiveness of non-executive directors and of the audit committee, aiming at improving and strengthening existing

arrangements.


There was a wide range of suppliers promising to make their purchasers more professional and competitive. Services and systems that could be outsourced now included; training, news distribution, media contacts, monitoring and evaluation, HR compliance, information resources, broadcast and web services. However, clients, many now with in-house communications teams that had the size and spend of a small to medium-sized consultancy, could access these services too. It was now impossible for PR consultants to be the sole exponents of editorial media expertise.

These years see PR consultancy managers grappling with an array of pressures that varied according to the overall business climate. These include problems arising from clients becoming more efficient in buying PR services; of competitive pressures from other consultancies or other marketing disciplines and, difficulties in securing talented professionals who now had in-house careers as options.

This was the period when procurement professionals became part of the consultancy-client contracting process. It became essential to show transparency in the consultancy’s client invoicing, which in itself, often entailed making improvements in account handling procedures.

The notion of “transparent relationships” also fed through into general account management processes, helping to remove any remaining mystique that PR consultants had of being uniquely able to generate media coverage.

Delivering measurable “value” through communications campaigns was all important, if difficult to demonstrate. Many clients and consultancies felt that traditional evaluation techniques were not sufficient for showing how the work had impacted at a strategic, rather than at a purely operational, level. This debate continues today.

Sometimes however, the PR consultancy failed to provide clients with a desirable level of information: there was either too little or too much. A marketing director is quoted as saying, “About 18 months ago there was a

danger of our consultancies killing us with bureaucracy.”

This was not surprising. Technology systems were being created to provide clients and consultancies with “real-time information” and most had too many features and were too complicated for the average PR consultant to use on a daily basis. A typical jargon-ridden claim from a supplier of a new client-relationship-management system was that this would allow, “Account administration to embrace technology solutions that offer clients a means of managing internal processes and communications’ project-critical information”.

For many of the larger consultancies the early years were a time for rationalising and restructuring. As noted earlier, Kingston Smith W1 report that 17 of the top 30 companies showed exceptional costs due to re-organisation. Many PR consultancies struggled to thrive in this increasingly competitive environment.

Although specialisation was not new, this period saw the emergence of niche PR consultancies securing large, blue-chip clients for high-value retained and project work. For the first time, the trade association yearbook described consultancies as falling into two categories; full service and specialist.

Of the many new consultancies created, almost all professed a particular expertise. Not only did specialists thrive, but the larger consultancies created or invested in a wider range of skills so that their businesses could reflect their clients’ organisations. Of course, clients often selected a consultancy whose niche matched their own business interests and this narrowing of focus enabled PR consultants to develop a level of media expertise that was not available externally.

In 2004, the PRCA summarised the challenging climate, “Business for consultancies has been tough, clients have been harder to source, taken longer to close, have less business to play for and have greater expectations,”

“It’s a buyers’ market, of that there is no doubt” said the chairman of the trade association in 2007. “Buyers can select by market sector, PR discipline and geography.”


Businesses tended to communicate along functional reporting lines and could be inward-looking, so the external, more objective, perspective provided by the PR consultancy was often considered valuable.

As has been mentioned, until then, PRCA had been consistent in representing around 150 UK consultancies.16 These made up around 80 per cent of the fee income of the UK PR sector. The majority of consultancies, some 2,800, remained unattached.

Services to the communications sector had also developed. PR consultancies now assembled their own pitches for selecting suppliers to support their businesses, including: property consulting; legal support; training for craft and business skills; HR compliance; professional and indemnity insurance; project management and accountancy software services.

In addition, there were developments and innovations in the services which enabled PR practitioners to operate more effectively. There were now companies offering, usually on a national and international basis: press release distribution; automated media and media contact selection, media monitoring and evaluation, analysis and planning; web casting; broadcast consultancy; market research; editorial and writing services; media training; multi-lingual copywriting and translating; events listings by sector and calendar; access to social media “libraries” plus outsourced events management, venue finders, promotions fulfilment.

A decade after the web was created, its use was general.

“Email to desk” was the norm by 2002, creating the “24/7” information environment and with it the PR consultancy’s role of interpretation and analysis of the ever-changing external situation. “Competitive monitoring” of a client’s rivals, and interpretation of PR campaign opportunities and threats, became commonplace.

Gradually, the impact of internet interactivity in catalysing a host of media channels that could be engaged with and contributed to became clear.

Once this trend was underway and the content of these channels was accessible to all the relationship that organisations, their products and services have with the media, had to change.

On January 1st, 2005, the Freedom of Information Act (2000) FOIA came into force and journalists and campaigning organisations learnt the value of using FOIA as a means of extracting previously concealed data from public authorities. PR consultants quickly understood how to make the most of these opportunities. However the publicising of information that often by its nature had never been expected to be made public, hastened the tendency to distrust organisations and authority figures.

However, despite the competitive trading environment, there was still much business to be won. By 2009, the combined annual income of PRCA members had grown to £342 million.

Often, the consultancy took on the role as interpreter of the external environment which had grown to be much more complex.

Of course, all this expertise was also available to In-house teams, so using it per se, did not confer competitive advantage to PR consultancies.

There could be no more “control” or “management” of stakeholder communications. The time of deference was over.

16 The PRCA now represents in excess of 200 consultancies, plus around 50 in house members.


A similar interest developed in terms of the relationship to the community, which now greatly affects organisations, their employees, their products and services.

Towards the end of the decade the concept of “social media” emerged, meaning a myriad of narrow-cast, ever-changing communities. However elusive, the key characteristic of such groups is that their members communicate transparently and usually, individuals in the groups are trusted, their views respected. This is often in contrast with communications that come from the “outside” world.

“National newspaper sales are eroded as web audience grows” is a common headline and “newsosaur” is a term for those still loyal to the printed page. New sizes and formats were experimented with but failed to halt the year on year loss of readers, which, from 2004, is said to be, on average, nearly five per cent. National newspapers, particularly the broadsheets, have successfully attracted readers, if not advertisers to their websites. Regional and local newspapers continue to close down. Free weekly papers were fairly common. They were reliant on advertising and their editorial content often poor.

However, free daily papers, for example “Metro,” are proving to be successful. Metro UK claims to distribute a million copies a day to 16 cities and has two million readers. Its news reporting is described as “bite-sized national and international news, wrapped around local entertainment reviews, travel and weather” and this approach is attractive for readers and publishers alike.

Since October 2009, the London Evening Standard has removed its cover price and its owners report this to be a successful move. Instead of selling around 140,000 copies a day, around 606,000 copies a day are now given away to a readership of 1.4 million.17

Free newspapers, however, are growing their circulations.

By 2006, mainstream media had adopted “climate” as a newsworthy issue and this helped to stimulate an awareness of the individual’s and the organisation’s relationship to the environment.

This period sees seismic change in the UK’s media landscape with rapid declines in national and regional newspaper sales.

17 Latest NRS figures (Jan-Jun 10) show an increase in readership to 1.4 million, representing an average of 2.3 readers per copy from the

605,977 ABC circulation.

Newspapers National Regional Free Newspapers Newspapers Newspapers

Copies sold (millions)

1983 5,734 2,793 1,555

1984 5,860 2,767 1,638

1985 5,703 2,733 1,846

1990 5,537 2,588 2,023

1995 5,206 2,277 1,648

2000 4,692 2,104 1,562

2005 4,336 1,745 1,526

2008 3,906 1,482 1,695

Chart 10: sales of UK newspapers 1983-2008

Source: The Advertising Statistics Yearbook


Overall sales of consumer magazines have also declined, but given the wide and diverse scope of published titles, some will inevitably be winning and some losing readers.

Magazine readership reflects (and promotes) celebrity interest and of the UK’s top 10 weekly magazines, six are television listings titles. Monthly magazines are similarly orientated towards TV watching, with Sky Movies and Sky Sports amongst the biggest-selling titles. The National Readership Survey (NRS) reports that many youth-interest publications are doing well, particularly among on-line media consumers.

On-line publications, some of them existing hard copy titles and some new, are legion but (currently) difficult to measure. However, NRS also reports that strong magazine brands which have digital offerings are showing signs of successfully reshaping their businesses to maintain off and on line readership.

Increasing channel choice, however, almost always entails declining numbers of viewers and this is shown in Chart 11 which illustrates how television advertising expenditure is falling, in response to falling audiences.

Chart 12 charts the growth of commercial radio, which, despite the significant increase in the number of “services” or stations until 2008, is now suffering so severely from cuts in advertising that sector analysts, Enders Analysis, predict that it is “dying out.” Media UK predicts that BBC radio stations will contract by a quarter over the next 12 months.18

In the last 40 years, the UK has gone from having three television channels to nearly 300.

It is said19 that outside the BBC, radio will not be commercially viable and is likely to end up in the form of hobbyist models, such as podcasts.

18 Media UK 23.7.10.

19 Enders Analysis, July 2009

TV Total Advertising Expenditure (£m)

1983 978

1984 1,085

1985 1,186

1990 2,004

1995 2,667

2000 3,950

2005 4,097

2008 3,819

Chart 11: UK advertising expenditure sales 1983 - 2008

Source: The Advertising Statistics Yearbook

Radio No of Services at year end

1983 42

1984 48

1985 49

1990 106

1995 176

2000 256

2005 285

2008 355

Chart 12: UK radio stations 1983 - 2008

Source: The Advertising Statistics Yearbook 2009


Continuing consultancy evolution

PR consultancies will continue to evolve as energetic and creative people find new and more effective ways of understanding and engaging with audiences. Barriers to entering this sector are few and the business model is simple.

Already, issues which recently looked to be problematic, such as protecting the PR consultancy’s role as guardian of editorial content in social media, appear to be favourably resolved.

Executives from leading consultancies are confident about their ability to benefit from more complex, interactive communications be they business or consumer interest.

As organisations have become accessible and accountable, safeguarding their brand and corporate reputations is inextricably linked. Both are vital, impacting current value and future success. Most consultancies have taken advantage of this opportunity, schooling senior talent, often co-opting it from other disciplines, developing risk analysis and change management21 techniques and undertaking proprietary research.

“The overall share of traditional areas such as TV, radio, newspapers, magazines, outdoor and cinema has declined in favour of consumer insight, PR and public affairs, branding and identity, healthcare, and specialist communications, which embraces direct, interactive and internet.”20

PR is an increasingly strategic tool in effecting this stewardship and it is in this sense that consultancies have moved “beyond marketing.” It is an area of massive potential growth.

20 Sir Martin Sorrell. PR Week, July 16th 2010.

21 VMA reports a 36 per cent of consultancies say they have been asked to provide advisory services to CEOs and boards on managing

communications through change. Communicate March 2009


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