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The Strategic Public Relations Center

The Strategic Public Relations Center. We recommend you download the presentation on our web site to follow this web cast. For more information email SPRC@USC.EDU. USC Annenberg Strategic Public Relations Center 2002 PR Generally Accepted Practices (GAP) Study.

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The Strategic Public Relations Center

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  1. The Strategic Public RelationsCenter We recommend you download the presentation on our web site to follow this web cast. For more information email SPRC@USC.EDU

  2. USC Annenberg Strategic Public Relations Center 2002 PR Generally Accepted Practices (GAP) Study Presented via Web CastNovember 19, 2002

  3. SPRC STAFF Ian Mitroff Jerry Swerling Jennifer Floto Murat Alpaslan Greg Bishop Special Thanks To Kathy Cripps, CPRF

  4. Agenda • About the SPRC • History • Mission • Goals • Research Agenda • 2002 GAP Study • Goals • Summary of Key Findings • Emerging Best Practices • Final Thoughts - The Schizophrenic Profession

  5. SPRC HISTORY • Conceived one year ago • Launched Spring, 2002 • Initial partners • AT&T • Avery Dennison • Council of PR Firms • GM • Raytheon • Weber Shandwick • Lohan Media/Leonard Sands

  6. SPRC MISSION • Dramatically advance the study, practice, and value of PR, through applied research done in partnership with others, by: • Demonstrating the value of PR through quantification • Maximizing recognition of that value • Helping to define the evolving role of PR • Elevating the skills of practitioners • Developing the optimal PR curricula

  7. SPRC GOALS • PR Laboratory/Think Tank • Elevate the importance of evaluation (outcomes) • Identify best practices and build database • Evaluation • Organization • Budgeting • Program planning

  8. SPRC GOALS • Provide rationale for an expanded, better integrated role • Bridge the gap between academia & profession • Increase the prestige of the PR profession & professionals • Integrate research into curriculum • Train PR leaders

  9. SPRC PRELIMINARY RESEARCH AGENDA • Generally Accepted Practices Study (Complete) • Post-9/11 Crisis Management Study (Complete) • Evaluation Best Practices, Consumer Products Category: “Hot Spots” Field Interview Study (Proposed, Q4/02 – Q2/03) • Evaluation Best Practices, Consumer Products Category: Broad Application Feasibility Survey (Proposed, Q2/03 – Q3/03) • GAP Follow-Up Study (Proposed, Q3/03)

  10. USC SPRC/CPRF GAP Study

  11. GAP Study Goals • Landmark study to explore: • Perceived value of PR • Internal PR department organization • Agency relationships and usage • Current Generally Accepted Practices (GAPs) • Gaps in industry knowledge • Emerging Best Practices • Provide practical, applied research

  12. GAP Study Background • May/June 2002, 25-question survey sent to 4,600 U.S. senior PR professionals • Combination of lists • Across industry categories • Emphasis on “Most Admired” • Written, email, web responses • More than 350 respondents (8% return)

  13. GAP Study Background • Analytical methodology • Raw frequencies • Explicit comparisons • Revenue, MACs, public/private, etc. • Correlations • Factor analyses

  14. Respondent Data • 61 % publicly held companies; 39 % private • 69 MAC vs 257 Non MAC • Averages: • Gross revenues: $6.9 billion • ROA: 1.92 % • PR budgets: $3.2 million • PR staff: 24 • Allocate 23 % of total PR budget to agency fees

  15. Respondent Data (cont’d)

  16. USC SPRC/CPRF GAP StudyKey Findings

  17. Key Findings: “Most Admired” • Somewhat greater support from senior management • Rated 6.0 (7 the highest level) • Non-MACs rate 5.8 • PR reports to Executive Office, not Marketing • Self perceptions: more ethical, proactive, anticipatory

  18. Key Findings: “Most Admired” • Higher PR:GR ratio among Fortune 1000 • Larger % of gross revenues dedicated to PR budgets • Fortune 500 MAC PR:GR Ratio: 0.05 cents:$1 • Fortune 500 Non-MAC PR:GR Ratio: 0.02 cents:$1 • Larger percentile budget cuts among all MACs • Larger base budget as % of revenue • Stronger “Reputational Reserve” • Use of agencies virtually universal

  19. Key Findings: Strategic Positioning • The more a PR function is designed, practiced and evaluated in close alignment with an organization’s strategic business goals, and • The more strategic its mindset, • The greater its: • Support from senior management • Budget (as % of gross revenues among the largest) • Perceived contribution to success. • Strategic positioning pays off!

  20. Key Findings: Average Budgets • The Fortune 500 spend significantly more on PR in total dollars, but not in terms of ratio. • Fortune 500 average PR budget: $8.5 million • Fortune 501-1000: $2.2 million • Threshold/critical level of PR expenditures in the $1.25 - $1.75 million range. • Services sector has highest PR budgets as % of revenues (PR:GR ratio). (Size effect)

  21. Key Findings: PR:GR Ratios • New term a la A:S - PR to GR ratio, or PR:GR (MAC – 0.05%) (MAC – 0.06%)

  22. Key Findings: Budget Changes

  23. Key Findings: % Budget Changes

  24. Key Findings: Senior Management Perceptions • Senior management’s perceptions re. PR’s contribution to success: • PR’s contributes less than Finance, Marketing, Strategic Planning and IT • PR, HR, Legal tied • Security a distant last • Should not be interpreted as indicator of non-support

  25. Key Findings: PR & Strategic Planning IF • PR is viewed as making a contribution to the strategic planning process, THEN • There is higher perceived value of PR’s contribution to the success of the organization as a whole

  26. Key Findings: Staffing (cont’d)

  27. Key Findings: Evaluation Measures • Evaluation tools • “Influence on Corporate Reputation” is the most frequently cited method, despite a lack ofgenerally accepted/quantifiable measures. • Measures with greatest potential impact on success – sales, profitability, market share – are ranked last. • Much work remains to be done!!!

  28. Key Findings: Evaluation Measures (cont’d) • Those with larger PR budgets: “influence on corporate culture and stakeholder attitudes” • Those with smaller PR budgets: “ad equivalency of clips” (imprecise) • Other top measures: • Employee attitudes/morale • Content analysis of media clips • Share of voice • But how measured?

  29. Key Findings: Evaluation Measures (cont’d) • Least used measures are those with greatest potential impact on corporate success: • Contribution to sales/profitability • Market share • Influence on stock performance • New methodologies are needed!!!

  30. Key Findings: Agency Usage • Financially strong and weak are equally likely to use agencies: • 85% of respondents overall • 95% of Fortune 500 MACs • 100% of Fortune 501-1000 MACs • Utilities/Transportation sectors use agencies to greatest extent • Overall, 2-3 agencies average • Not used in place of internal staff

  31. Key Findings: Agency Usage (cont’d) • Top reasons for using agencies (in rank order): • Strategic/market insight • Offset limitations of internal staff • Objectivity • Cheaper than adding staff • Easier than adding staff • Ability to quantify results • Senior management expectation

  32. Key Findings: Agency Usage (cont’d) • Top concerns about using agencies: • Cost • Lack of knowledge/market insight • Perceived ROI • Junior teams • Staff turnover • Ability to quantify results • Vague about conflicts • 2% said “no concerns”

  33. Key Findings: Private vs. Public • Fortune 500 private companies have smaller PR staffs - others don’t

  34. Key Findings: Organizational Functions

  35. Key Findings: Organizational Functions

  36. Key Findings: Organizational Culture • First study of its kind • Respondents ranked their organizations using specific sets of adjectives • Helps us understand what PR professionals think about culture/business philosophy of their companies.

  37. Key Findings: Organizational Culture

  38. Key Findings: Organizational Culture

  39. Key Findings: Organizational Culture • Self perceptions if report to Executive Office • People-first, ethical, humble, warm, democratic, diverse, strategic • Self perceptions if report to Marketing • Less calm, less visionary, more reactive and more inflexible

  40. Key Findings: Organizational Culture • Self perceptions of organizations that use PR agencies: • Flexible • Democratic • Visionary • Proactive • And turbulent!

  41. Key Findings: Emerging Best Practices • Generally Accepted Practices not the same as Best Practices, despite widespread use • Generally Accepted = widely used • Best = proven effective by valid means • “Most Admired” status a good starting point • Much work to be done in identifying, validating Best Practices

  42. Key Findings: Emerging Best Practices • Forge a strategic role for PR • Seek the right reporting line • Know your PR:GR ratio • Use PR agencies appropriately • Select based on strategic ability • Ongoing vs. sporadic relationship • Review cost/staffing in the beginning

  43. Key Findings: Emerging Best Practices • Focus on: • Crisis avoidance/mitigation • Ethics • Evaluation • Be proactive rather than reactive • Build a “Reputational Reserve”

  44. Final Thoughts:A Schizophrenic Profession • Two contradictory, simultaneously held views: • When seen as making significant contribution to strategic objectives, PR is held in relatively high regard by practitioners (and top management) BUT • PR generally has a lower perception of its own contribution to success compared to other functions (generally shared by top management)

  45. Final Thoughts (cont’d) • If the profession is to advance and broaden its reach, it must demonstrate to top management in measurable, quantifiable ways, that the strategic objectives of an organization cannot be obtained without it. • Strong, strategically oriented PR functions are indispensable, NOT optional.

  46. THANK YOU! For more information email SPRC@USC.EDU

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