1. PRCA Membership Benchmarking Survey: Key Findings 2008 June 2008

2. 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: £2.51 - £5 million – Very large: greater than £5 million Russell Bell, Research Consultant russell@hadhamassociates.co.uk

3. Finance Directors

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

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

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

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

8. 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 russell@hadhamassociates.co.uk

9. 9 Reported growth over time Base: Q2, 67 FDs (NB – basket of consultancies changes each year) 05-0604-0503-0402-0301-0200-0199-00 Russell Bell, Research Consultant russell@hadhamassociates.co.uk 06-07

10. 10 Over-servicing rate Base: Q8, 67 FDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

11. 11 Offer payment by results/performance related pricing Base: Q17, 67 FDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

12. HR Directors

13. 13 Churn by consultancy size Base: Q2, 65 HRDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

14. 14 Churn by job level Base: Q2, 65 HRDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

15. 15 Next career moves Base: Q3, 65 HRDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

16. 16 Staff retention strategies (past 12 months) Q28 Base: 65 HRDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

17. 17 Employment prospects: coming 12 months Q29 Base: 65 HRDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

18. 18 Made redundancies in past 12 months Base: Q26, 65 HRDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

19. 19 Average salary increases over time Base: Q6, 65 HRDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

20. 20 Average bonus as % of salary over time Base: Q6, 65 HRDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

21. 21 Financial benefits currently offered Q11 Base: 65 HRDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

22. 22 Performance-related benefits currently offered Q11 Base: 65 HRDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

23. 23 Lifestyle-related benefits currently offered Q11 Base: 65 HRDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

24. 24 Career-related benefits currently offered Q11 Base: 65 HRDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

25. MDs/CEOs

26. 26 Industry outlook for next 12 months Q16 Base: 73 MDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

27. 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 russell@hadhamassociates.co.uk

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

29. 29 Income growth forecast Base: Q3, 73 MDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

30. 30 Operating margin growth forecast 2007 vs 2006 Base: Q4, 73 MDs Russell Bell, Research Consultant russell@hadhamassociates.co.uk

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

32. 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 russell@hadhamassociates.co.uk - 23% success rate with reactive leads - 13% success rate with proactive leads

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

34. 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 russell@hadhamassociates.co.uk

35. End For more information, please contact: Russell Bell on 07747 194581 or +44 7867 531557 russell@hadhamassociates.co.uk