1. Conducted by Evo Research Contact: Russell Bell 07747 194581 PRCA BENCHMARKING SURVEY 21 June 2007

2. 2 Background Annual PR industry benchmarking survey undertaken by Evo Research Three elements in the survey: – 65 HR Director questionnaires (49%) – 79 MD/CEO questionnaires (60%) – 58 FD questionnaires (44%) 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

3. Finance Directors

4. 4 Industry growth - Small consultancies +24% +11% Figs in £000s Base: Q2 58 FDs

5. 5 Industry growth - Medium consultancies +12% Figs in £000s Base: Q2 58 FDs +22%

6. 6 Industry growth - Large consultancies +26% +10% Figs in £000s Base: Q2 58 FDs

7. 7 Industry growth – Very large consultancies +15% Figs in £000s Base: Q2, 58 FDs +1%

8. 8 Operating margin Base: Q2, 58 FDs Sm: 21% Med: 17% Lar: 14% V Lar: 16% Net pre-tax profit as % of total net income

9. 9 Reported growth over time Base: Q2, 58 FDs (NB – basket of consultancies changes each year) 05-0604-0503-04 02-03 01-0200-0199-00

10. 10 Over-servicing rate Base: Q8, 58 FDs

11. 11 Offer payment by results/performance related pricing Base: Q17, 58 FDs

12. HR Directors

13. 13 Churn by consultancy size Base: Q2, 65 HRDs

14. 14 Churn by job level Base: Q2, 65 HRDs

15. 15 Next career moves Base: Q3, 65 HRDs

16. 16 Staff retention strategies (past 12 months) Q28 Base: 65 HRDs

17. 17 Average salary increases over time Base: Q6, 65 HRDs

18. 18 Average bonus as % of salary over time Base: Q6, 65 HRDs

19. 19 Benefits introduced in 2006 Base: Q11, 65 HRDs Career Lifestyle Performance Financial

20. 20 Flexible working options offered Q16 Base: 65 HRDs

21. MD/CEOs

22. 22 Client relationships: key drivers of success % = proportion selecting as one of top three drivers Q15 Base: 79 MDs

23. 23 Top 6 threats to PR industry success 10 = very serious threat 1 = not a significant threat Q1 Base: 79 MDs

24. 24 Income growth forecast 2007 vs 2006 Base: Q3, 79 MDs

25. 25 Operating margin growth forecast 2007 vs 2006 Base: Q4, 79 MDs

26. 26 Top 6 internal business issues % = proportion selecting as ‘critical internal business issue’ Q2 Base: 79 MDs

27. 27 New business leads and pitches - 46% reactive leads result in new business pitches - 34% 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: 79 MDs

28. 28 Other aspects of leads and pitches A majority of consultancies (57%) say that 40% or more of the new business briefs they receive have no stated budget 15% of new business briefs don’t result in work for any consultancy (e.g. contract cancelled by client) Eight in ten (82%) have experienced delays between winning new business and the work actually commencing 26% of these have experienced delays of more than six months Qs 10,11,13, 14 Base: 79 MDs

29. 29 Industry outlook for next 12 months Q16 Base: 79 MDs

30. 30 Income forecasts vs actual income growth Forecast in 2006 survey - MDs Actual growth in 2007 survey - FDs All : +20%All : +17% Small : +27% Medium: +19% Large: +18% Very Large: +11% Small: +11% Medium: +12% Large: +10% Very Large: +15%

31. The end