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]