PRCA Membership Benchmarking Survey: Key Findings 2008 June 2008

2 Background Annual PR industry benchmarking survey undertaken by Russell Bell (independent research consultant) 141 PRCA members contacted (incl. 10 new contacts after interviewing began) Three elements in the survey: –65 HR Director questionnaires –73 MD/CEO questionnaires –67 FD questionnaires Four consultancy size bands defined by income: – Small: up to £850K – Medium: £851K - £2.5 million – Large: £ £5 million – Very large: greater than £5 million Russell Bell, Research Consultant

Finance Directors

4 Industry growth - Small consultancies +21% Figs in £000s Base: Q2 67 FDs +16% Russell Bell, Research Consultant

5 Industry growth - Medium consultancies Figs in £000s +6% -1% Base: Q2 67 FDs Russell Bell, Research Consultant

6 Industry growth - Large consultancies Base: Q2 67 FDs Figs in £000s +7% +14% Russell Bell, Research Consultant

7 Industry growth – Very large consultancies +7% +1% Figs in £000s Base: Q2 67 FDs Russell Bell, Research Consultant

8 Operating margin Base: Q2, 67 FDs Sm: 19% Med: 14% Lar: 17% V Lar: 16% Net pre-tax profit as % of total net income Russell Bell, Research Consultant

9 Reported growth over time Base: Q2, 67 FDs (NB – basket of consultancies changes each year) Russell Bell, Research Consultant 06-07

10 Over-servicing rate Base: Q8, 67 FDs Russell Bell, Research Consultant

11 Offer payment by results/performance related pricing Base: Q17, 67 FDs Russell Bell, Research Consultant

HR Directors

13 Churn by consultancy size Base: Q2, 65 HRDs Russell Bell, Research Consultant

14 Churn by job level Base: Q2, 65 HRDs Russell Bell, Research Consultant

15 Next career moves Base: Q3, 65 HRDs Russell Bell, Research Consultant

16 Staff retention strategies (past 12 months) Q28 Base: 65 HRDs Russell Bell, Research Consultant

17 Employment prospects: coming 12 months Q29 Base: 65 HRDs Russell Bell, Research Consultant

18 Made redundancies in past 12 months Base: Q26, 65 HRDs Russell Bell, Research Consultant

19 Average salary increases over time Base: Q6, 65 HRDs Russell Bell, Research Consultant

20 Average bonus as % of salary over time Base: Q6, 65 HRDs Russell Bell, Research Consultant

21 Financial benefits currently offered Q11 Base: 65 HRDs Russell Bell, Research Consultant

22 Performance-related benefits currently offered Q11 Base: 65 HRDs Russell Bell, Research Consultant

23 Lifestyle-related benefits currently offered Q11 Base: 65 HRDs Russell Bell, Research Consultant

24 Career-related benefits currently offered Q11 Base: 65 HRDs Russell Bell, Research Consultant

MDs/CEOs

26 Industry outlook for next 12 months Q16 Base: 73 MDs Russell Bell, Research Consultant

27 Top 7 threats to PR industry success 10 = very serious threat 1 = not a significant threat Q1 Base: 73 MDs Russell Bell, Research Consultant

28 Client relationships: key drivers of success % = proportion selecting as one of top three drivers Q15 Base: 73 MDs Russell Bell, Research Consultant

29 Income growth forecast Base: Q3, 73 MDs Russell Bell, Research Consultant

30 Operating margin growth forecast 2007 vs 2006 Base: Q4, 73 MDs Russell Bell, Research Consultant

31 Top 6 internal business issues % = proportion selecting as ‘critical internal business issue’ Q2 Base: 73 MDs Russell Bell, Research Consultant

32 New business leads and pitches - 42% reactive leads result in new business pitches - 31% proactive leads result in pitches - 52% success rate with pitches following reactive leads - 43% success rate for pitches following proactive leads Qs 6,8,9 Base: 73 MDs Russell Bell, Research Consultant - 23% success rate with reactive leads - 13% success rate with proactive leads

33 Reactions to current economic climate Q5 Base: 73 MDs Russell Bell, Research Consultant * Unprompted answer category (others are prompted)

34 Income forecasts vs actual income growth Forecast in 2007 survey - MDs Actual growth in 2008 survey - FDs All : +28%All : +7% Small : +42% Medium: +26% Large: +22% Very Large: +14% Small: +21% Medium: +6% Large: +7% Very Large: +7% Russell Bell, Research Consultant

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