Public Relations Procurement Intelligence Report, 2024 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Public Relations - Procurement Trends

“Rising demand for reputation management by politicians, brands and public figures is fueling the growth of the industry.”

Procurement of public relations enables a business enterprise to overcome its communication obstacles, enhance its brand image, and manage its reputation. The global market is anticipated to grow at a CAGR of 6.85% from 2024 to 2030. It is attributed to factors such as increasing competition between corporates, rising demand for reputation management by politicians, brands, and public figures, and the growing influence of marketing through influencers. In addition, increased usage of digital channels to enhance brand reputation and growing requirement of services with niche expertise due to businesses turning more specialized would also fuel the industry towards growth. However, challenges pertaining to the measurement of the effectiveness of services, low visibility of the market, rising competition from new mediums of communication (such as social media), and the absence of competent personnel may hinder industry's growth during the forecast timeframe.

Corporates are showing a significant amount of desire for the services offered in the industry. They are attempting to interact digitally with their customers in light of the rise of social media. They are leveraging the assistance of service providers to connect with their target audience in a more unique and personalized approach, allowing them to stand out from their rivals. Service providers lessen the barrier that separates a business from its clients. They use earned, sponsored, or owned media to manage their reputation. Establishing the client's reputation and brand awareness is their primary goal. Additionally, the globalization of business is occurring at a never-before-seen rate as the world has become a smaller place. Businesses are striving to take the global market by storm, using industry services to raise brand awareness and build relationships with target consumers. They are more concerned with preserving a positive rapport with their clients and communicating with them frequently.

The global public relations (PR) market size was valued at USD 82.0 billion in 2023. Services related to social media will keep driving market growth. Social media's function has evolved over the decade. These days, social media is the primary method of communication. It has evolved into a mutually beneficial communication tool for businesses and the general public alike. When it comes to launching new products, merging or purchasing businesses, or hiring important new staff, social media is becoming the go-to method for businesses to communicate with the public. The primary focus of the service providers is on the retail and consumer goods sector, which is one of the most competitive among all of the current sectors. Businesses in retail often invest significant time, resources, and energy into their public relations, marketing, and advertising in an attempt to set themselves apart from their competitors.

Key technology trends that are supplementing the procurement of the public relations industry include digital solutions, artificial intelligence (AI), big data & analytics, blockchain, virtual assistant and chatbots, and virtual reality (VR) and augmented reality (AR). Digital solutions encompass employing a range of internet resources and platforms to connect and interact with a business’s intended audience. It covers social media, blogs, and email marketing campaigns and is all about establishing connections and enhancing a brand's online visibility. AI can enhance the PR campaigns of businesses by providing the tools to connect with the audiences. It supports creating new content along with maintaining the existing one by automating the process. Leveraging big data and analytics, service providers can support understanding the habits and preferences of a business’s target audience by gathering and evaluating enormous volumes of data.

North America accounted for the largest share of the global market in 2023 against the backdrop of an increased need for services offered by organizations and business enterprises in the region. Businesses want to establish their reputation and brand, and service providers are well capable of doing this. In addition, the regional market has been significantly influenced by the emergence of digital media.

Public relations are crucial for maintaining a company's online presence as more and more businesses use digital platforms to connect with their target markets. Following North America, Europe is witnessing steady growth. This can be attributed to several factors, such as the growing need for reputation management services among corporations and organizations, the emergence of digital media, and the demand for industry services. Businesses these days need to have a strong online presence due to the advent of digital media. 

Supplier Intelligence

“What best describes the nature of the public relations industry? Who are the key players operating in the market?”

This industry is highly competitive, exhibiting a fragmented landscape. It witnesses the presence of a large number of regional and global players operating in the industry. Key players are consistently engaging in research and development to launch new services in the market. For instance, Edelman introduced “Edelman Data & Intelligence (DxI) couple of years back,” which is a new service that leverages data and analytics to provide its clients with strategic decisions and draw measurable insights. Likewise, Weber Shandwick has introduced a new offering called "Weber Shandwick Connect" to assist clients in making the proper connections and fostering long-lasting partnerships. In addition, the players are increasingly concentrating on strategic alliances and partnerships to increase their market share. For instance, in order to enable young people to take on leadership roles in their communities, Fleishman-Hillard and the World Economic Forum have teamed up to create a new program dubbed “Global Shapers.”

The threat of substitute products/services in the industry is moderate because the service providers offer highly specialized services. As a result, it is challenging to locate alternatives that might match the caliber and knowledge provided by these companies. Similarly, the threat of new entrants in the industry is low. This is mostly because there are already established and substantial players with ample resources that are operating in the industry.

In addition, the initial investments required to set up a business in the public relations field (in terms of tools and specialized teams) will also serve as a deterrent for new entrants. Furthermore, buyers possess a high capability to negotiate for the procurement of services due to the availability of a large supply base. There is an ample number of service providers existing in the industry and each is offering identical services along with the technology. This enables the buyers to switch to a better alternative in case they are not satisfied with any respective service provider. 

Key suppliers covered in the industry:

• Coyne Public Relations, LLC

• Daniel J. Edelman Holdings, Inc.

• FINN Partners

• Fleishman-Hillard Group Limited

• Interpublic Group of Companies, Inc.

• Ketchum, Inc.

• Ogilvy

• Omnicom Group Inc.

• PR Consulting Dentsu Inc.

• Publicis Groupe S.A.

• Weber Shandwick

• WPP plc 

Pricing and Cost Intelligence

“What are the key cost components for public relations industry? What factors influence the charges/prices?"

The cost structure of the global public relations (PR) industry is constituted by labor, technology (hardware/software), rent and utilities, advertisement and marketing, training, and others.Other costs include administrative fees, travel expenses, maintenance and repair, insurance, and tax. Labor costs form the largest cost component to be considered in the procurement of public relations. The salaries received by the professionals working in the industry are fairly decent in comparison to various other sectors. This is due to the service providers’ work towards building a positive public image of their clients, thus charging higher rates for the services they deliver. For instance, a public relations specialist earns between USD 49,300 and USD 81,760 in the U.S.

Geographic location, team experience and expertise, scope of services, agency size, payment terms, and technological capabilities are the key factors influencing the service rates. Service providers may bill more in larger cities or metropolitan areas than in smaller ones. Similarly, service providers with more experience and knowledge generally charge more for their services. Their price increase is attributed to their ability to outperform less experienced agencies in terms of results and strategy.

The extent and caliber of support a business needs will also have an impact on the price of using a public relations firm and its services. The majority of businesses employ a comprehensive package that includes producing and delivering press releases, crisis management, brand management, and media relations. Larger projects or campaigns will cost more since they require more time and money.

The average hourly rate for various services offered in the industry in the U.S., are as below:

a)      Corporate Communications: The agencies support all internal communication (informal and personal communication amongst various teams) and external communication (connecting with customers through social media, websites and press releases) initiatives of a company to elicit positive feedback from stakeholders. The rate for this service typically ranges between USD 99 and USD 148.

b)      Event Management: With predetermined goals that enhance the client's reputation, agencies plan and strategize an event. The rate for this service typically ranges between USD 99 and USD 148.

c)      Reputation Management: Agencies actively seek ways to enhance an organization's public image while monitoring consumers’ perception of their brands. The rate for this service typically ranges between USD 24 and USD 48.

Fixed-fee pricing is one of the prominent pricing structures in the industry. This model operates by having a mutually understood and explicit understanding between the client and the service provider regarding the service's scope, quality, and schedule. The key advantage of this model is that since both parties are aware of the exact amount they will pay or get for the services, it offers clarity and openness. This promotes productivity and efficiency while lowering the need for tracking and monitoring.

The cost structure is broken down in the accompanying chart. Other costs can depend on multiple cost components, which have been illustrated below:

Sourcing Intelligence

“How do buyers of public relations engage with their suppliers? What is the type of engagement model?”

The sourcing intelligence for public relations provides that the businesses consider engaging in a hybrid outsourcing model for procurement of services. They decide to hold a few of the activities pertaining to public relations with themselves and outsource the crucial ones to a third-party service provider. Organizations can gain from economies of scale and experience by employing a hybrid approach. A key benefit of in-house activities is that internal employees can commit more time and effort to any particular campaign as they have a better understanding of a business's services/products. As a result, the work is more focused and unique because the team is already familiar with the brand and the best ways to position it, whereas the key benefit achieved by an outsourced partner is that an outside agency assists the company in establishing connections with both previous and present clients for campaigns, obtaining favorable press coverage, and cultivating relationships with influential media figures.

"In the hybrid outsourcing model, the client outsources some parts of the overall operation to third parties. Generally, critical operations are carried out in-house by the client."

Typically, businesses look for an 'approved provider' to collaborate and get their outsourcing activities fulfilled. The key reason behind opting for this operating model is that the business has already worked with the service provider in the past and is well aware of its capabilities and delivery potential. Also, the supplier has already met the predefined set of qualifications and quality standards that the business expects.

Working with a regular service provider develops a long-term relationship with the business, which results in enhanced performance and efficient pricing because the chances of volatility in the rates get reduced to a greater extent. Feedback and ideas can freely flow when a business and a service provider have a long-term connection. This will eventually result in more efficient operations, which may lower expenses and improve customer service.

In Asia-Pacific, India is considered as the low / best country for sourcing public relations. The industry landscape in the nation is a dynamic patchwork of shifting economic conditions, cultural quirks, and technological advances. Specialists in public relations are caught between tradition and innovation as globalization picks up speed. The nation has a thriving media sector that includes print, digital, and broadcast media.

In North America, the U.S. is considered the low / best country for sourcing industry services. Spending on advertising goes up in the nation as corporate profits and the number of enterprises rise. Higher levels of consumer expenditure also influence demand for PR services; however, this is not necessarily a reliable predictor. Public relations firms locate their headquarters close to important clientele. As a result, businesses establish themselves in major cities, including California and New York.

The report also provides details regarding peer analysis, recent supplier developments, supply-demand analysis, competitive landscape, KPIs, SLAs, risk assessment, negotiation strategies, and low-cost/best-cost sourcing analysis. In the report, we have tried to provide a holistic industry perspective, an overview of the supplier landscape - the presence of different types of players and the competitive pressure within the industry as a whole (PORTER’s). The key benefit of procuring public relations services is developing a positive brand reputation and creating an image in the eyes of investors and general customers. Similarly, the supply chain practices under sourcing and procurement are also covered. One such instance is the operating model that encompasses all the business processes conducted within an organization. It is an integral aspect of the company's operations and plays a crucial role in its success. 

Public Relations Procurement Intelligence Report Scope