Transcript Key Findings
Slide 1
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 2
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 3
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 4
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 5
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 6
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 7
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 8
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 9
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 10
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 11
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 12
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 13
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 14
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 15
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 16
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 17
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 18
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 19
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 20
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 21
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 22
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 23
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 24
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 25
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 26
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 27
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 28
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 29
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 30
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 31
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 32
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 33
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 34
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 35
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 36
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 37
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 38
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 39
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 40
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 41
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 42
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 43
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 44
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 45
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 46
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 2
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 3
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 4
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 5
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 6
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 7
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 8
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 9
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 10
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 11
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 12
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 13
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 14
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 15
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 16
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 17
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 18
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 19
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 20
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 21
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 22
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 23
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 24
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 25
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 26
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 27
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 28
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 29
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 30
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 31
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 32
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 33
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 34
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 35
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 36
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 37
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 38
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 39
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 40
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 41
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 42
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 43
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 44
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 45
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]
Slide 46
The Strategic Public Relations
Center
We recommend you download the
presentation on our web site to
follow this web cast.
For more information email [email protected]
USC Annenberg
Strategic Public Relations Center
2002 PR Generally Accepted
Practices (GAP) Study
Presented via Web Cast
November 19, 2002
SPRC STAFF
Ian Mitroff
Jerry Swerling
Jennifer Floto
Murat Alpaslan
Greg Bishop
Special Thanks To
Kathy Cripps, CPRF
Agenda
About the SPRC
▪
▪
▪
▪
2002 GAP Study
▪
▪
▪
History
Mission
Goals
Research Agenda
Goals
Summary of Key Findings
Emerging Best Practices
Final Thoughts - The Schizophrenic Profession
SPRC HISTORY
Conceived one year ago
Launched Spring, 2002
Initial partners
▪ AT&T
▪ Avery Dennison
▪ Council of PR Firms
▪ GM
▪ Raytheon
▪ Weber Shandwick
▪ Lohan Media/Leonard Sands
SPRC MISSION
Dramatically advance the study, practice, and
value of PR, through applied research done in
partnership with others, by:
▪ Demonstrating the value of PR through
▪
▪
▪
▪
quantification
Maximizing recognition of that value
Helping to define the evolving role of PR
Elevating the skills of practitioners
Developing the optimal PR curricula
SPRC GOALS
1. PR Laboratory/Think Tank
2. Elevate the importance of evaluation
(outcomes)
3. Identify best practices and build database
Evaluation
Organization
Budgeting
Program planning
SPRC GOALS
4. Provide rationale for an expanded, better
integrated role
5. Bridge the gap between academia & profession
6. Increase the prestige of the PR profession &
professionals
7. Integrate research into curriculum
8. Train PR leaders
SPRC PRELIMINARY
RESEARCH AGENDA
1. Generally Accepted Practices Study (Complete)
2. Post-9/11 Crisis Management Study (Complete)
3. Evaluation Best Practices, Consumer Products
Category: “Hot Spots” Field Interview Study
(Proposed, Q4/02 – Q2/03)
4. Evaluation Best Practices, Consumer Products
Category: Broad Application Feasibility Survey
(Proposed, Q2/03 – Q3/03)
5. GAP Follow-Up Study (Proposed, Q3/03)
USC SPRC/CPRF
GAP Study
GAP Study Goals
Landmark study to explore:
▪ Perceived value of PR
▪ Internal PR department organization
▪ Agency relationships and usage
▪ Current Generally Accepted Practices (GAPs)
▪ Gaps in industry knowledge
▪ Emerging Best Practices
Provide practical, applied research
GAP Study Background
May/June 2002, 25-question survey sent to
4,600 U.S. senior PR professionals
▪ Combination of lists
▪ Across industry categories
▪ Emphasis on “Most Admired”
▪ Written, email, web responses
More than 350 respondents (8% return)
GAP Study Background
Analytical methodology
▪ Raw frequencies
▪ Explicit comparisons
Revenue, MACs, public/private, etc.
▪ Correlations
▪ Factor analyses
Respondent Data
61 % publicly held companies; 39 % private
69 MAC vs 257 Non MAC
Averages:
▪ Gross revenues: $6.9 billion
▪ ROA:
1.92 %
▪ PR budgets: $3.2 million
▪ PR staff:
24
Allocate 23 % of total PR budget to agency fees
Respondent Data (cont’d)
Respondents by Revenue Category
$6 Billion+
14%
25%
$3.1-$6 Billion
$1.6-$3.1 Billion
19%
$580M-$1.6 Billion
9%
$100M-$580 Million
18%
15%
Less than $100
Million
USC SPRC/CPRF
GAP Study
Key Findings
Key Findings: “Most Admired”
1. Somewhat greater support from senior
management
Rated 6.0 (7 the highest level)
Non-MACs rate 5.8
2. PR reports to Executive Office, not Marketing
3. Self perceptions: more ethical, proactive,
anticipatory
Key Findings: “Most Admired”
4. Higher PR:GR ratio among Fortune 1000
▪
▪
▪
Larger % of gross revenues dedicated to PR budgets
Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1
Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1
5. Larger percentile budget cuts among all MACs
▪
▪
Larger base budget as % of revenue
Stronger “Reputational Reserve”
6. Use of agencies virtually universal
Key Findings: Strategic
Positioning
The more a PR function is designed, practiced and
evaluated in close alignment with an organization’s
strategic business goals, and
The more strategic its mindset,
The greater its:
▪ Support from senior management
▪ Budget (as % of gross revenues among the largest)
▪ Perceived contribution to success.
Strategic positioning pays off!
Key Findings: Average Budgets
The Fortune 500 spend significantly more on PR
in total dollars, but not in terms of ratio.
▪ Fortune 500 average PR budget: $8.5 million
▪ Fortune 501-1000: $2.2 million
Threshold/critical level of PR expenditures in the
$1.25 - $1.75 million range.
Services sector has highest PR budgets as % of
revenues (PR:GR ratio). (Size effect)
Key Findings:
PR:GR Ratios
New term a la A:S - PR to GR ratio, or PR:GR
A verage % of G ross R even u es D ed icated to P R B u d gets
R even u e C a teg o ries
$ 6 B illio n +
[F o rtu n e 5 0 0 ]
$ 3 .1 -$ 6 B illio n
[F o rtu n e 5 0 1 -1 0 0 0 ]
A vera g e % o f
N u m b er o f
% of
G ro ss R even u es to P R
R esp o n d en ts
T o ta l R esp o n d en ts
0 .0 3 %
43
23%
14
8%
(MAC – 0.05%)
0 .0 5 %
(MAC – 0.06%)
$ 1 .6 -$ 3 .1 B illio n
[F o rtu n e 1 0 0 1 -2 0 0 0 ]
0 .1 2 %
26
14%
$ 5 8 0 M -$ 1 .6 B illio n
[F o rtu n e 2 0 0 1 -5 0 0 0 ]
0 .1 3 %
36
20%
$ 1 0 0 M -$ 5 8 0 M illio n
[F o rtu n e 5 0 0 1 -2 0 0 0 0 ]
0 .7 7 %
37
20%
L ess th a n $ 1 0 0 M illio n
[F o rtu n e 2 0 0 0 0 + ]
2 .3 8 %
27
15%
T o ta l
0 .5 6 %
183
100%
Key Findings: Budget Changes
R even u e C ategories
$6 B illion + [F ortun e
500]
$3.1-$6 B illion [F ortun e
501-1000]
$1.6-$3.1 B illion
% D ecreased
% F lat
% In creased
T otal
% w ith in R even u e C ategories
39%
32%
29%
100%
[num ber of respondents]
[28]
33%
[23]
54%
[21]
13%
[72]
100%
[8]
29%
[13]
44%
[3]
27%
[24]
100%
[12]
45%
[18]
25%
[11]
29%
[41]
100%
[23]
25%
[13]
27%
[15]
47%
[51]
100%
[13]
39%
[14]
34%
[24]
26%
[51]
100%
% w ith in R even u e C ategories
[15]
36%
[13]
34%
[10]
30%
[38]
100%
[num ber of respondents]
[99]
[94]
[84]
[277]
% w ith in R even u e C ategories
[num ber of respondents]
% w ith in R even u e C ategories
[F ortun e 1001-2000]
[num ber of respondents]
$580M -$1.6 B illion
% w ith in R even u e C ategories
[F ortun e 2001-5000]
[num ber of respondents]
$100M -$580 M illion
% w ith in R even u e C ategories
[F ortun e 5001-20000]
[num ber of respondents]
L ess th an $100 M illion
% w ith in R even u e C ategories
[F ortun e 20000+ ]
T otal
[num ber of respondents]
Key Findings: % Budget
Changes
R even u e C ategories
$6 B illion +
A verage %
N u m ber of
% of
B u dget C h an ge
R espon den ts
T otal R espon den ts
-3%
49
23%
-3%
18
8%
-3%
34
16%
-3%
42
20%
-1%
44
21%
-3%
26
12%
-3%
213
100%
[F ortun e 500]
$3.1-$6 B illion
[F ortun e 501-1000]
$1.6-$3.1 B illion
[F ortun e 1001-2000]
$580M -$1.6 B illion
[F ortun e 2001-5000]
$100M -$580 M illion
[F ortun e 5001-20000]
L ess th an $100 M illion
[F ortun e 20000+ ]
T otal
Key Findings: Senior
Management Perceptions
Senior management’s perceptions re. PR’s
contribution to success:
▪ PR’s contributes less than Finance, Marketing,
▪
▪
Strategic Planning and IT
PR, HR, Legal tied
Security a distant last
Should not be interpreted as indicator of nonsupport
Key Findings: PR & Strategic
Planning
▪
▪
IF
PR is viewed as making a contribution to the
strategic planning process,
THEN
There is higher perceived value of PR’s
contribution to the success of the organization as a
whole
Key Findings: Staffing (cont’d)
P R S taff S ize B y In d u stry C ategory
1 -D ig it S IC
S ize o f
N u m b er o f
% of
P R S ta ff (A vg .)
R esp o n ses
T o ta l R esp o n d en ts
M a n u fa ctu rin g
25
91
34%
U tilities a n d T ra n sp o rta tio n
41
39
14%
T ra d e
13
19
7%
F in a n ce, In su ra n ce, a n d R ea l E sta te
13
41
15%
S erv ices
13
80
30%
T o ta l
21
270
100%
Key Findings:
Evaluation Measures
Evaluation tools
▪ “Influence on Corporate Reputation” is the most
▪
frequently cited method, despite a lack of generally
accepted/quantifiable measures.
Measures with greatest potential impact on success
– sales, profitability, market share – are ranked
last.
Much work remains to be done!!!
Key Findings:
Evaluation Measures (cont’d)
Those with larger PR budgets: “influence on
corporate culture and stakeholder attitudes”
Those with smaller PR budgets: “ad equivalency of
clips” (imprecise)
Other top measures:
▪ Employee attitudes/morale
▪ Content analysis of media clips
▪ Share of voice
But how measured?
Key Findings:
Evaluation Measures (cont’d)
Least used measures are those with greatest
potential impact on corporate success:
▪ Contribution to sales/profitability
▪ Market share
▪ Influence on stock performance
New methodologies are needed!!!
Key Findings: Agency Usage
Financially strong and weak are equally likely
to use agencies:
▪ 85% of respondents overall
▪ 95% of Fortune 500 MACs
▪ 100% of Fortune 501-1000 MACs
▪ Utilities/Transportation sectors use agencies to
▪
greatest extent
Overall, 2-3 agencies average
Not used in place of internal staff
Key Findings: Agency Usage
(cont’d)
Top reasons for using agencies (in rank order):
1.
2.
3.
4.
5.
6.
7.
Strategic/market insight
Offset limitations of internal staff
Objectivity
Cheaper than adding staff
Easier than adding staff
Ability to quantify results
Senior management expectation
Key Findings: Agency Usage
(cont’d)
Top concerns about using agencies:
1. Cost
2. Lack of knowledge/market insight
3. Perceived ROI
4. Junior teams
5. Staff turnover
6. Ability to quantify results
7. Vague about conflicts
2% said “no concerns”
Key Findings: Private vs. Public
Fortune 500 private companies have smaller PR staffs others don’t
A verage N u m b er of P eop le in P R O rgan ization
R even u e C a teg o ries
A vera g e N u m b er
N u m b er o f R esp o n d en ts
% o f T o ta l R esp o n d en ts
P riv a te
P u b lic
P riv a te
P u b lic
P riv a te
P u b lic
21
78
12
59
12%
35%
N /A
13
N /A
24
N /A
14%
18
12
18
22
18%
13%
$ 5 8 0 M -$ 1 .6 B illion [F ortu n e 2 0 0 1 -5 0 0 0 ]
9
8
17
33
17%
19%
$ 1 0 0 M -$ 5 8 0 B illion [F ortu n e 5 0 0 1 -2 0 0 0 0 ]
7
4
29
21
29%
12%
L ess th an $ 1 0 0 M [F ortu n e 2 0 0 0 0 + ]
4
3
23
12
23%
7%
11
33
99
171
100%
100%
$ 6 B illion + [F ortu n e 5 0 0 ]
$ 3 .1 -$ 6 B illion [F ortu n e 5 0 1 -1 0 0 0 ]
$ 1 .6 -$ 3 .1 B illion [F ortu n e 1 0 0 1 -2 0 0 0 ]
T o ta l
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t H ave
P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
C o rp C o m m (n o n -a d v ertisin g )
1
1
M a rketin g P R
2
4
C risis m a n a g em en t
3
3
In tern a l co m m u n ica tio n s
4
2
E xecu tiv e co m m u n ica tio n s
5
5
O n lin e co m m u n ica tio n s
6
7
P ro d u ct P R
7
6
C o m m u n ity rela tio n s
8
8
C o rp o ra te a d v ertisin g
9
10
P u b lic a ffa irs
10
12
Issu es m a n a g em en t
11
9
Key Findings:
Organizational Functions
F or W h at F u n ction s D oes Y ou r D ep artm en t
H ave P rim ary R esp on sib ility?
R a n kin g s
P riva te
P u b lic
P h ila n th ro p y
12
11
P ro d u ct a d v ertisin g
13
15
Issu es a d v ertisin g
14
13
G o v ern m en t rela tio n s
15
16
L o b b y in g
16
17
C o n su m er a ffa irs
17
18
In v esto r rela tio n s
18
14
E th icist/o m b u d sm en
19
19
Key Findings:
Organizational Culture
First study of its kind
Respondents ranked their organizations using specific
sets of adjectives
Helps us understand what PR professionals think
about culture/business philosophy of their companies.
Key Findings:
Organizational Culture
Organization Self-Description
Homogeneous – Diverse
Description Range
Rigid – Flexible
Short-sighted – Visionary
Cold – Warm
Average Rating
Unprofitable – Profitable
Poor external reputation – Good
external reputation
Unethical – Ethical
1
2
3
4
5
Rating Scale
6
7
Key Findings:
Organizational Culture
Organization Self-Description
Description Range
Reactive –
Proactive
Profits-first –
People-first
Tactical – Strategic
Average Rating
Autocratic –
Dem ocratic
Arrogant – Hum ble
1
2
3
4
Rating Scale
5
6
7
Key Findings:
Organizational Culture
Self perceptions if report to Executive Office
▪ People-first, ethical, humble, warm, democratic,
diverse, strategic
Self perceptions if report to Marketing
▪ Less calm, less visionary, more reactive and
more inflexible
Key Findings:
Organizational Culture
Self perceptions of organizations that use PR
agencies:
▪ Flexible
▪ Democratic
▪ Visionary
▪ Proactive
And turbulent!
Key Findings: Emerging Best
Practices
Generally Accepted Practices not the same as
Best Practices, despite widespread use
▪ Generally Accepted = widely used
▪ Best = proven effective by valid means
“Most Admired” status a good starting point
Much work to be done in identifying,
validating Best Practices
Key Findings: Emerging Best
Practices
1.
2.
3.
4.
Forge a strategic role for PR
Seek the right reporting line
Know your PR:GR ratio
Use PR agencies appropriately
Select based on strategic ability
Ongoing vs. sporadic relationship
Review cost/staffing in the beginning
Key Findings: Emerging Best
Practices
5. Focus on:
▪ Crisis avoidance/mitigation
▪ Ethics
▪ Evaluation
6. Be proactive rather than reactive
7. Build a “Reputational Reserve”
Final Thoughts:
A Schizophrenic Profession
Two contradictory, simultaneously held views:
▪ When seen as making significant contribution to
strategic objectives, PR is held in relatively high
regard by practitioners (and top management)
BUT
▪ PR generally has a lower perception of its own
contribution to success compared to other functions
(generally shared by top management)
Final Thoughts (cont’d)
If the profession is to advance and broaden its
reach, it must demonstrate to top management
in measurable, quantifiable ways, that the
strategic objectives of an organization cannot
be obtained without it.
Strong, strategically oriented PR functions
are indispensable, NOT optional.
THANK YOU!
For more information email [email protected]