Are agency-of-record relationships vanishing?
Charting the future of public relations
Holmes Report

Are agency-of-record relationships vanishing?

Arun Sudhaman

USC Annenberg's biennial GAP Study is always worth a read, and the seventh instalment in the series proves no different. The 2012 study, conducted in conjunction with with the Arthur Page Society, the IPR, IABC and PRSA, polled 620 senior communications professionals, using the findings to determine what it calls 'Generally Accepted Practices'. Of these, one in particular caught my eye. Agency-of-record relationships, apparently, are vanishing. In 2002, the report notes that more than 50 percent of public corporations had AOR relationships in place. That proportion has since declined to the current level of 15 percent. Adds the report:
At the same time, the number of agencies used by corporations on an ongoing or project basis continues to increase. This is likely the result of a need for specialized and/or regionally focused agency services.
Initially, this finding surprised me, but maybe it shouldn't. Specialisation, whether by industry sector, marcomms capability or demographic segment, has undoubtedly become more important. Yet I wonder if this same finding would hold beyond the US, because it is rare to see companies abandoning the AOR model for project relationships, where global or multi-market activity is concerned. As always, I'd be interested in hearing readers' views on this. The study is full of other good stuff, concluding that while overall budgets are mostly up, compared to two years ago, more than half of respondents do not expect an increase next year. Measurement also continues to rise incrementally, to nine percent of total budget compared to four percent in 2010. And marketing/product PR, according to the survey, is in a "state of decline", thanks - USC believes - to an increasing reliance on social media. That, of course, does not necessarily equate to a downward spiral for digitally-savvy consumer firms.  
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