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 

Who do you report to?

The number of CMOs and CCOs reporting into the chief executive or chair of their organisation is high and stable this year: 72%, compared to 73% last year and 74% in 2019, which was a big leap up from 64% in 2018. Oversight by the chief marketing officer rose for the first time in a couple of years: from 14% in 2018, to 8% in 2019, to just under 7% in 2020, this year it’s at 11%. A rising number also report into the chief operations officer: nearly 6%, compared to 4% last year, while 9% cohort report into varied functions (compared to 15% last year) including titles such as heads of corporate, global or public affairs and chief impact officer. Just under 2% of our influencers this year report into the chief finance officer, compared to none last year and 5% in 2019.

What is the overall PR budget at your organisation?

Our Influence 100 now control PR spend of more than $4.7 billion, almost back up to 2019 levels after last year’s unsurprising dip to $4.2 billion, although still much less than the $6.5bn recorded when this survey launched in 2012.

There was a slight rise in the number of our CMOs and CCOs who said they were managing PR budgets of more than $100m: 27% compared with 24% last year. That’s still down from 31% in 2019, but well up on 11% in 2018.

Those who peg their budget between $75m and $100m was up again from to 6% in 2019, to 7% in 2020 and 11% this year, while those handling a budget of between $50m and $75m levelled at 13%, similar to 2020. 

Many fewer respondents – 37% – now manage a PR budget of less than $25m, compared to a high of 55% last year as budgets were hit by the pandemic, and 40% in 2019. 

We asked an open-ended question about how much budgets had increased or reduced by for 2021. At least half said budgets had been flat, and a healthy number said budgets had increased by between 2% and 40% for the year, but a large proportion also said 2021 budgets have been lower than 2020, from 5% cuts to a halving of the previous year, with a notable number saying 2021 was around 10% down on 2020.

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 (65%, still at the top, although down on the 75% who said it was a priority last year) and social media, where 60% said they expected paid and organic social to be a significant area of spend, although this is down from 91% who said much of their focus would be on social last year as priorities in how to reach and engage audiences in lockdown shifted.

Other areas of note were traditional media relations (a priority line in the budget for 35% of respondents) and content development and marketing at 46%, well down from being a priority for 65% of respondents last year. 

Employee engagement and change management will continue to be a major area of spend for 35% of respondents, although this is down from 45% last year. Unsurprisingly, crisis management is slightly less of a priority, picked by 17% of our influencers compared to 30% last year.

Advertising spend is back up to 24% of anticipated spend over the coming year, after dropping significantly from 26% to 16% in last year’s report. Sponsorship and influencer marketing were a priority for 33% of our cohort, compared to 29% last year, while experiential was only one percentage point down on last year, at 19%.

Data and analytics dropped back to 2019 levels: 25%, compared to 36% last year, while measurement and evaluation stayed steady at 35%, compared to 36% last year and 26% in 2019.

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

Confidence among our CMOs and CCOs is soaring after the extreme uncertainty of last year; 51% said they were extremely confident about the resilience of the sector they operate in, compared to 39% last year, and another 40% said they were very confident, compared to 45% last year. Only 9% sounded a note of caution by saying they were somewhat confident, and none of our respondents said they lacked confidence in the future of their sector. 

Team

The number who manage teams of more than 100 people rose again this year to 52% – up from 38% in 2018, 41% in 2019 and 49% in 2020. The number managing teams of 50-100 was up to 23% from 13% in 2020, while 13% manage a team of 21-50, compared to 16% last year, and only 12% have a small in-house team of 20 or less, compared to 22% last year.

There was huge variety in the extent of team flux: while some reported their teams had stayed the same size, there were plenty of respondents where headcount had increased by 5%, 10%, 20%, or more than doubled. A much lower number said their team had shrunk, by anything from 4% to 33%, compared to 2020.

As employees start to return to the office, we also asked about in-house working models, offering respondents a wide choice of options: full time in the office; hybrid model between office and home; mostly remote; completely remote; still unsure; or some other model. Almost all – 92% – said they would be adopting some kind of hybrid model, with the remaining 8% saying they expected employees to be back in the office full time. None of our in-house leaders were anticipating a mostly or completely remote model.

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 again responsible for hiring, the same as last year. This year, 69% of respondents were the primary decision-maker for digital/social agencies (up from 64% last year and 53% in 2019) and 41% said the same of advertising agencies, up significantly from 32% last year. Other specialist agencies managed by our cohort included content, data and analytics, research, measurement, public affairs, ESG and CSR, financial communications, events, and training. 

How much does your organisation spend on PR agencies?

Agency spend appears to be on an upward trajectory, with 30% spending more than $20m on their PR agency partners compared to 28.5% last year and 17% in 2019. Around the same proportion – 32% – spent between $2m and $10m, up from 28.5 last year, while 16% had a PR budget of £10m-$20m, compared to 14% in 2020. At the lower end, the number of respondents spending less than $1m was up again to pre-2020 levels at 16%, compared to 5% last year, and the number spending between $1-$2m was 7%, compared to 24% last year.

Which best describes your approach to using PR agencies?

Just 4% of our CMOs and CCOs say they have one global PR agency of record, up from 2% last year but still down on 6% in 2019. The number who said they have a global AOR, but also work with other firms was 33%, down from 39% last year. There was also a drop in the number in the proportion of respondents who use regional agencies of record, from 14% to 8%, similar to 2019 levels, but a hike in the number of in-house leaders who have separate agencies in each market, from 11% to 20%. The trend for selecting firms on a project basis is steady, with a third again saying this was their preferred way of working with agencies (up from 23% in 2019). And compared to last year, when every one of our influencers said they used PR agencies, this year 2% said they did not (although this is still down on 6% in 2019).

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 significantly up this year, from 32% in 2020 to 45% (compared to 37.5% in 2019), while the number preferring to run an invitation-only process was down from 52% to 39%. The number of respondents who prefer to hire an agency they have previously worked with was down slightly from 9% to 6% (compared to 3% in 2019), and those using referral networks was back up to pre-pandemic levels, at 10%, compared to 7% last year.

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 up slightly 75% to 78% (compared to 83% in 2019), but within this, those who said procurement was very involved dropped from 50% to 45%, while the number who said they were somewhat involved rose from 25% to 33%. Those who said the procurement was not at all involved in pitches, however, dropped from 25% to 20%, although the number who said procurement has the final sign-off on agency hire rose from none last year to 2% this year. 

Which agency services do you anticipate making an effort to bring in-house?

For the first time this year, we asked our leaders which agency services they would be looking at bringing in-house. While 30% said none, the same number said they would be making an effort to bring media relations in-house, 30% said they would be looking at bringing social media management in-house, and 28% said they were considering bringing content production in house – all core and growing income streams for PR agencies. Nearly a quarter of our respondents said they would like to bring data and analytics in-house, while both measurement and evaluation and creative idea generation were being looked at as possible functions that could be brought in house by 18% of the Influence 100. Influencer marketing was a less attractive option, with only 10% saying they would be bringing it in-house. Other options included earned media – although one respondent commented: “We’re actually farming out more than we historically have.”

How would you rate your overall satisfaction with your PR agency partners?

This is another new question for 2020, and a gratifying reflection on how closely many in-house teams and PR agencies have worked together to get through the pandemic, and how hard agencies have worked for their clients in extraordinary times. Less than 2% of respondents said they were not at all satisfied with their agency partners, while 53% said they were reasonably satisfied and 45% said they were extremely satisfied.

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 as we move beyond the crisis phase of the pandemic, with a small drop in the number of CCOs and CMOs who said they most valued agencies’ strategic counsel, from 26% last year to 20% this year, compared to only 13% in 2019. There was a notable rise, from 19% to 25%, in the number of those saying creative thinking and new ideas had been the greatest benefit of working with an agency over the past year – although still nowhere near the 36% who rated agencies’ creativity most highly in 2019. And there’s again an even stronger focus on in-house leaders valuing agencies’ tactical and execution support, up from 43% in 2019, to 49% last year, and 51% this year.

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 again asked two questions we introduced last year to gauge how relationships and expectations have shifted during the pandemic. Showing how well the industry has adapted to the new remote working environment globally, 80% of our influencers said there had been no change to their relationships with their PR agencies, compared to 64% last year. Slightly less than 10% said their relationships with their PR agencies had suffered because of home working, compared to 11% in 2020, and the same number said relationships had improved (although this was down from 18% last year).

In terms of expectations, as everyone settled into the “new normal”, a much larger proportion this year said there had been no change to what they expected from their PR agencies _ up from 36% to 47%. A small number – 6%, around the same as last year – said expectations had decreased. A further 35% – down from 40% last year – said expectations had grown slightly and only 12% (compared to 17% in 2020) said their expectations of their agencies had grown “dramatically” throughout the year.