Profession Enjoying a Multi-Year Period of Expansion in Budgets and Staffs
Results from the eighth biennial Communication and Public Relations Generally Accepted Practices (GAP VIII) Study were released by the USC Annenberg Strategic Communication and Public Relations Center (SCPRC). The purpose of the GAP Study is to provide senior communicators with timely guidance as they manage their organizations, develop strategy, and prepare for the future. Participants included the most senior communications professionals in corporations, government agencies and non-profit organizations. This first report focuses on data from corporate respondents only.
A total of 347 senior communicators completed all 50 questions in the study, which was supported by all four of the leading U.S. professional associations in the field: Arthur W. Page Society, Institute for Public Relations (IPR), International Association of Business Communicators (IABC) and Public Relations Society of America (PRSA). GAP VIII was also supported by a financial grant from Edelman.
Key Findings
Budget increases are more the norm: While flat or reduced PR/Communication budgets were the norm during the recession, the industry has now entered a much healthier, multi-year post recession period in which companies reporting budget increases outnumber those reporting reduced or flat budgets. In fact, in 2014 40% of public company respondents expected their PR/Communication budgets to increase over 2013 levels, while 25% expected no change and 35% expected decreases. In 2013, 60% experienced budget increases over 2012, while 17% experienced no change and 23% experienced decreases.
Staffs are growing: Consistent with the improved budget scenario, the 40% of respondents experiencing staff growth in 2014 over 2013 outnumbered those expecting flat or reduced staff size. 38% reported staff growth in 2013 over 2012. Industries in which the majority of respondents expected staff growth in 2014 include energy, natural resources, finance, insurance, manufacturers/marketers of B-to-B products, professional services, retailing, and transportation/shipping.
Social media techniques are more widely used than legacy: The scope of upheaval in the media environment becomes clear in a 1 (none) to 7 (extensive usage) ranking of the use of media techniques and channels. The five most commonly used (based on sample averages) were:
#1 – Content created to be spread by social media (5.16);
#2 – Twitter (5.11);
#3 – Production of on-line videos (5.01);
#4 – Facebook (4.77); and
#5 – Print newspapers (4.75).
Print magazines (4.70) were ranked seventh, Television (3.31) was 15th and Radio (2.81) was 16th out of 24 media techniques evaluated.
The popularity of creating spreadable content, especially video, reinforces the belief that organizations are now their own media channels. With an increase over the last two years from an average of 4.33 to 5.11 (on a 1-7 scale), the use of Twitter as a corporate communication platform has grown dramatically. In contrast, the use of Facebook over the same period has remained flat. Emerging tools and techniques that may bear watching include editorial websites (4.09); multimedia content for mobile devices (3.72); Instagram (2.37); Crowd sourcing (2.19); Pinterest (2.01); and Vine (1.87).
Respondents indicated that as many as six separate organizational functions have some degree of use and control over social media in their companies, raising the possibility of multiple voices and muddled messages. However, 87% reported that their companies’ social media activities are well or very well coordinated.
Measurement and evaluation are still works in progress: 49% of respondents utilize measurement techniques developed in-house, 26% use techniques recommended by professional/industry groups, and 20% use proprietary methods developed by their outside agencies. 22% are making increasing use of audience research in planning and evaluating campaigns, while 31% are measuring on-line conversations. 71.4% strongly agree that there is a need for Comm/PR professionals who can interpret data and use it to plan and evaluate programs. Coupled with the increases in percentage of total budget allocated to evaluation seen over multiple GAP studies, these data reflect the growing importance of analytics and accountability in the practice.
However, as in all seven previous GAP studies no individual measurement tool earned a usage score significantly greater than five on a scale of 1 (no usage) to 7 (extensive usage), suggesting a lack of faith in currently available tools, and a need for new tools that do a better job of measuring actual outcomes and actions, rather than outputs. The five most commonly used measurement tools are:
#1 – influence on reputation (5.01);
#2 – social or online media metrics (4.87);
#3 – content analysis of clips (4.65);
#4 – total number of clips (4.35), and,
#5 – total impressions (4.3).
While the relatively high use of the archaic “total number of clips” and “total impressions” is disheartening, this is at least partially offset by the high presence of social media metrics and the virtual disappearance of advertising equivalencies (AVE’s).
Bad news for those who don’t evaluate: Respondents reporting a lack of measurement and evaluation were much more likely to describe their organizations as being rigid, autocratic, reactive/short-term, tactical (rather than strategic) and conservative.
Agency relationships remain strong: In good news for the agency industry, for the first time ever in the history of the GAP studies the most commonly cited reason for working with agencies reflects appreciation for intellectual added value, rather than simple labor. In GAP VIII the top ranked rationale was creative thinking, with the perennial winner – additional arms and legs – coming in second. “Objective and independent counsel” and “strategic insight” clustered just behind.
Nearly 100% of all large companies work with agencies, and such relationships are the norm among mid-sized and smaller companies as well. However, the percentage of overall budget allocated to agencies has remained flat since 2002 and clients are generally working with multiple firms rather than using the traditional agency of record model. Indeed, 57.4% of public companies reporting having ongoing project-based relationships with multiple agencies while only 13% reported having a single agency of record.
PR/Communication as an increasingly strategic contributor to organizational success: GAP VIII closely examined three indicators of PR/Communication’s perceived role and contribution: participation in organizational strategic planning, the extent to which PR-related recommendations are taken into consideration by senior management, and the function’s perceived contribution to financial success.
Almost 40% of respondents report that PR/Communication plays an active role in organizational strategic planning, while 15% strongly disagree and 45% are neutral. 59% agree that PR/Communication’s recommendations are taken seriously by senior management, while 9% strongly disagree and 32% are neutral. Finally, 44% agree that their senior leadership believes PR/Communication contributes to financial success, while 6% strongly disagree and a substantial 50% are neutral.
These findings are important because each of these three indicators strongly correlates with many positive outcomes and descriptors used by participants to describe their organizations, including “successful,” “good external reputation,” “innovative,” and “proactive,” among others.
“While correlation doesn’t prove causality, patterns that consistently link certain practices with certain positive outcomes, over multiple studies, shouldn’t just be ignored,” emphasized Professor Jerry Swerling, Director of the Strategic PR and Communication Center. “So, while we wouldn’t say ‘PR involvement in strategic planning leads to a better external reputation,’ we are very comfortable saying ‘Organizations in which PR is involved in strategic planning are more likely to have better external reputations due to a matrix of interrelated factors.’ One of our goals is to better understand that matrix.”
The results of multiple GAP studies, seen in combination with ample anecdotal evidence gathered from discussions with industry leaders, validate the existence of a very real trend: many companies are giving communication and reputational considerations a far greater role in organizational planning and decision making then was previously the case, and benefiting from that change. In this new environment PR/Communication is seen as a strategic asset affecting enterprise-wide policy and behavior, rather than in its far more limited, historical role as a purely tactical, secondary and largely marketing-driven function.
The connection between championing collaboration and success: Among public companies 66% report that their communication functions are well integrated and coordinated, 39% say that communication is well integrated with marketing, and 52% say it is well coordinated with finance, legal, operations, and other non-communication functions. Fifty-five percent report strong levels of all three forms of integration, suggesting that they enjoy what the GAP authors have dubbed a “Culture of Collaboration.”
Importantly, all forms of internal integration strongly correlate with three attributes that put communication in a stronger position within the organization: a role in organizational strategic planning; a belief by senior management that PR/Communication contributes to financial success; and a higher value attached to PR/Communication’s recommendations by senior management. In turn, all three of those internal attributes correlate with respondents’ self-evaluations of “good external reputation” and “successful” organizations.
The connection between reporting line, collaboration, PR/Communication effectiveness and organizational success: 43% of respondents have a solid reporting line to the CEO, President, or Chairman (collectively referred to as the C-Suite), 43% have both a dotted line to the C-Suite and a solid line to another function, including 26% who have a solid line to marketing and a dotted line to the C-Suite. 14% have no line whatsoever to the C-Suite.
Importantly, when asked to describe the degree of appropriateness of their reporting line on a scale of 1 (low) to 7 (high), those with solid C-Suite lines averaged 5.0; those with dotted C-Suite lines averaged 3.87, and those with both solid lines to marketing and dotted lines to the C-Suite averaged 3.85. By comparison, those with only a solid line to marketing averaged 2.29.
However, those having access to the C-suite by either solid or dotted reporting line reported higher levels of internal integration and collaboration of all types, and were much more likely to say that their recommendations are taken more seriously by senior management, that they have a significant role in organizational strategic planning, and that PR/Communication is seen by senior management as contributing to financial success.
Taken collectively the data strongly suggest that while having a solid line to the C-Suite is optimal, the key is access, even if only by dotted line. For example, reporting to marketing can be an effective provided that it is accompanied by a dotted line to the C-Suite.
The role of the PR/Communication function – aspirational vs. actual: 45% of respondents agreed that PR/Communication should play a key role in defining overall business strategy while just 13% actually play that role; 82% agreed that PR/Communication should play a key role in defining the company’s identity and core values, but only 40 % do so.
These findings are extremely important because those who do play key role in defining the overall business strategy, identity and core values were much more likely to report higher levels of organizational integration, a stronger role for PR/Communication, organizational success, good reputation, and access to the C-Suite.
Interestingly, 65% say that PR/Communication’s primary role is to serve as an advocate in support of organizational goals, while a far greater 95% indicate that they actually do so. Similarly, while 30% agree that the primary role should be to serve as mediator between an organization and its stakeholders, 70% actually do so.
Likewise, 75% agree that the primary role is to formulate, rather than simply communicate policy, but 81% actually do so. The GAP researchers interpret these data to mean that while many respondents serve in each of these capacities, they don’t view them as being their primary role.
The Communication Leadership Cycle: A hypothetical model for optimizing the communication function: The combined findings on the roles of the PR/Communication function, reporting line, internal collaboration, etc, cause the GAP authors to hypothesize that in many organizations the role of the PR/Communication function, and its contribution to organizational success, can be optimized by means of a five-factor cyclical process.
Factor 1: Given that when the PR/communication function has access to the C-Suite, it is in a stronger position to help define the overall business strategy, identity and core values of the organization: Earn (through results) meaningful access to the C-Suite.
Factor 2: Given that (1) when PR/Communication has C-Suite access it is in a stronger position to help define the overall business strategy, identity and core values of the organization, and (2) enhanced integration and collaboration are associated with enhanced internal influence for PR/Communication: Champion internal integration and collaboration, with the PR/Communication function showing the way.
Factor 3: Given that enhanced internal influence for PR/Communication will enhance its ability to affect organizational policy and behavior: Have, or obtain, the organizational, business and professional skills necessary to use that influence wisely and effectively.
Factor 4: Given that the ability to influence organizational policy and behavior will strengthen PR/Communication’s ability to affect internal and external perceptions of success, reputation, etc: Optimize PR/Communication people, processes and procedures to successfully take advantage of the opportunity.
Factor 5: Given that successfully taking advantage of the opportunity will enhance the value of PR/Communication’s access to the C-Suite, its contribution to defining the overall business strategy, identity and core values of the organization, etc: Continually reinforce and strengthen each of the Five Factors.
How to Access GAP VIII: The GAP VIII study report is available for free download at the USC Annenberg web site.
About the GAP studies: The GAP studies highlight Best Practices tied to successful outcomes, as well as important trends in the field and their implications. The USC Annenberg Strategic Communication and Public Relations Center undertakes the study and publishes the results as a free service to the profession. GAP is generally considered to be the largest, most comprehensive study of its type in the U.S. GAP VIII will also serve as the cornerstone for a multi-national study of the PR/Communication discipline, to be undertaken by the SCPRC in partnership with the Global Alliance for Public Relations and Communication Management.
The Strategic Communication and Public Relations Center (SCPRC) is part of USC Annenberg’s Public Relations Studies unit. Its mission is to advance the study, practice and value of strategic communication and public relations by conducting innovative applied research in partnership with other visionary organizations.
Located in Los Angeles at the University of Southern California, the Annenberg School for Communication and Journalism is a national leader in education and scholarship in the fields of public relations, communication, journalism, and public diplomacy. With an enrollment of more than 2,200 students, USC Annenberg offers doctoral, masters and bachelor’s degree programs, as well as continuing development programs for working professionals, across a broad scope of academic inquiry. The School’s comprehensive curriculum emphasizes the core skills of leadership, innovation, service and entrepreneurship and draws upon the resources of a highly networked university located in the media capital of the world.
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Contacts:
Jerry Swerling: 310-430-8689; swerling@usc.edu
Burghardt Tenderich: 213-740-0446; burghardt.tenderich@usc.edu
