There’s been a lot of talk in the last couple of weeks about PR finding it tough. Chime Communications and Huntsworth have both announced that their 2011 results are likely to be affected by the apparent slowdown in economic activity.

It isn’t just PR that’s finding things tough. Huntsworth is a PR group, but its worth remembering that only approx 50% of Chime’s revenues (though 60% of its profits) come from PR, the remainder from other marketing services and the share prices of the major multinational Marcoms groups have also taken a bit of a battering over the last few months.

As of 28/11/11 (16.50) some examples of these reductions from their 52 weeks highs are – WPP (-25.3%), Omnicom (-19.2%), Interpublic (-33.5%), Havas (-32.0%), Aegis (-29.6%) and Publicis (-19.8%).

This contrasts with the FTSE100 which was down around 13% against its 52 week high the same time this afternoon. Not that surprising as Marcoms usually underperforms in falling markets and overperforms in rising ones.

But as the graph above shows one quoted PR company has been bucking the trend. Next Fifteen is actually trading at a higher level than it was at the start of 2007 something none of the others can claim except for Publicis.

Next Fifteen is also the only one of these PR or Marcoms groups whose share price is up in calendar year 2011 (15%). Now obviously Next Fifteen is significantly smaller (market capitalisation £49m) than even Huntsworth (£90m) and Chime (£148m), nevermind the multinational groups but that doesn’t mean that outperforming the market is therefore easier.

In the Evening Standard a couple of weeks ago Tim Dyson, Next Fifteen’s CEO, put their success down to investment in digital and social media. In the analysis of the PR industry for 2010 that I helped the Holmes Report put together earlier this year the biggest success story was Edelman, (arguably) the first of the major PR brands to embrace digital, which climbed to the No.1 spot in the Holmes Report Global Rankings.

So perhaps this evidence demonstrates that though we can almost certainly expect another challenging year in 2012, there is still success to be found and particularly for those elements of the PR industry that are making digital core to their business.

I wanted to clarify how this number was reached and Cathy Bussey at PRWeek was kind enough to put me in touch with the senior researcher at Harris Interactive who put together the analysis.

He was most helpful and from our discussions I established that the £7.5bn represents the estimate of the total amount spent on PR both in house and with external agencies and freelancers.

UK PR Industry PR Census split

The split between in house and advisory is:

In House – £5.5bn
Agency/Freelancers – £2.0bn

The estimates were reached through the use of a combination of data including census returns, Office of National Statistics Data and the PRWeek Top150. With regards to the Agency/freelancer market figure of £2bn my view is that it is probably at the higher end of the likely range of estimates (as I will indicate below), but from my discussions the methodology behind it seems reasonable.

On the face of it two immediate implications are apparent. The vast majority of PR is delivered from in house resources (73 per cent of the total) and the agency/freelance market is highly fragmented.

The “highly fragmented” implication being due to the PRWeek Top 150 agencies with a combined income of £839m accounting for 42 per cent of the total UK agency/freelance market with no one agency in the Top 150 accounting for more than 3.3 per cent of the total market – Bell Pottinger – and even they are arguably a collection of agencies under one umbrella.

However these conclusions would represent an over simplification of the market.

Many Markets

When people talk about “the housing market” I often sigh because such a thing doesn’t really exist. In reality there are a lot of micro markets dependent on type of property and geography, even down to street level in some cases. In a similar way, as any agency MD/owner would tell you, the PR advisory market isn’t one homogenous beast.

At a very basic level it breaks into two main areas:

1. The small number of larger agencies almost exclusively based in the London Metro area competing for the accounts of large, often multinational, companies in the main where breadth of service areas, international capability and established brand can often be hygiene factors. These large companies will almost always have significant in house PR capability compared to SME’s meaning that external PR spend as a proportion of in house spend in this large company market will probably be quite a bit lower than the overall 27 per cent figure. Competition is therefore still very high despite the small number of participants as clients in house capability means they still hold the majority of the cards.

2. The remainder of the market where a very high volume of participants compete in individual micro markets driven by geography, sector and/or service area. In these markets the purchasers of external support will generally have much lower levels of in house PR capability (potentially none) and so the spend on PR will almost certainly represent a much higher proportion of total spend than the 27 per cent average. This can lead to these clients relying more heavily on their PR advisers, though this is very dependent on the particular micro market and how differentiated an individual agency/freelancer is in that market.

The £2bn overall estimate gives us a basis to estimate the potential split between these two broad market areas and equally these definitions provide a framework to test the reasonableness of the £2bn estimate itself.

Large Company Market

Firstly on the large company side we can look to establish a likely cut off point in agency size terms based on market share.

A bit of additional analysis on the PRWeek Top150 relating to the holding companies of agencies establishes the following list of 16 groups or individual agencies who would have market share of 0.5 per cent or more if the total UK agency/freelance PR market is £2bn. (Note many of these numbers are estimated by PRWeek within the Top 150 as the agencies don’t provide specific numbers – full details here)

See Notes below for agencies within each group.

This analysis makes WPP the single largest player in the UK PR market with 4.6 per cent of the market.

Obviously agencies (and freelancers) that are smaller than the £10m (0.5 per cent) cut off I have used above can still often win work with large companies, particularly if they have an area of clear differentiation either around sector or service specialism. If you include agencies with income of greater than £3m (0.15 per cent of the total market) from the PRWeek 150 table these would add an additional £144m between them giving £700m in total.

Two other factors need to be taken account of to reach our estimate of the large company market. Firstly not all sizeable agencies are in the Top 150 (though the vast majority are) and in addition there will be some PR services being provided to large companies by teams within agencies of other types e.g. digital marketing, SEO and social media. (Equally it is worth bearing in mind that some of the PR agencies concerned could be providing some marketing and SEO services within their own figures). As a complete finger in the air estimate to compensate for this if we make an allowance of £100m this would imply that the large company market is approx £800m in total.

For information if we now restate the table above based on an estimate of £800m for the large company market you get the following market share figures for the largest groups/agencies in this market:

These figures suggest that this large company market is actually quite concentrated when you take account of holding company groups with the top 10 accounting for almost 60 per cent.

Micro markets

The large company estimate of £800m would leave approx £1.2bn of the £2bn overall which would then relate to the second category of micro markets.

Ignoring sector or service specialism and just focussing on geography within these micro markets then the largest of them unsurprisingly is the London Metro area with the remaining PRWeek Top 150 entrants with income of less than £3m predominantly still based here – £109m out of £139m or 79%.

The unknown factor here is what proportion of the London Metro area market do these agencies account for? If for arguments sake we said it was half then this would give an estimate for this micro market of approx £200m+.

This would mean the large company market (mainly serviced from within London Metro) and the smaller company London Metro markets would be approximately £1bn combined. In turn implying the remaining micro markets for the rest of the UK would then account for approx £1bn.

(Interesting to note that the London Metro region accounts for an estimated 30 per cent of UK GDP and yet apparently at least 50 per cent of UK PR activity)

It is this implied figure for the regions of £1bn that leads me to think that the overall £2bn estimate may be on the high side. Evidence for this comes from the PRWeek Regional agencies rankings.

Regional element

Manchester based agencies have the largest combined income in the PR Week regional list with £12.2m and no other city represented on the list has more than £10m.  There are 17 cities in the UK outside of the London Metro area with populations of more than 250,000 the average of which is 427,000. The following table shows their population and the combined income total of PR agencies in the Top 40 Regional List that are based there.

These regional markets may be highly fragmented and freelancers may account for a much higher proportion of PR services in these areas. It also seems likely that a lot more PR services may be provided by agencies/freelancers who would have a broader marketing remit and so wouldn’t fall under the definition of “PR agency”. Consequenty these ranked agencies may only account for a relatively small proportion of the PR services provided in their area. However given the regional rankings it still seems unlikely that even the largest of these regional markets is measured in more than tens of millions. For the purpose of this exercise if we therefore assume the market size for the average of these cities is £25m you would get a total estimate for these larger regional markets of £425m.

This would give a total for large companies, London Metro and the main regional centres of approx £1.4bn. With the remainder of the country being likely to be fairly limited in market size terms it does seem that the £2bn overall figure looks a bit of a stretch. This analysis suggests an overall estimate of £1.6bn might be nearer.

On the other hand the analysis could be understating the large company market (is £100m enough for missing entrants in the PRWeek 150 and other types of agency?), the smaller company London Metro market could be substantially more than £200m (do the PRWeek entrants count for less than 50 per cent?) and perhaps the regional agencies really do only account for a very small proportion of their local markets.

Without detailed returns from everyone this is always going to be a difficult task and the research for the PRWeek/PRCA Census was certainly thorough so perhaps we can agree that a figure of £1.8bn +/- 10% is a fair range.

Notes

Agency groups

1. Finsbury, Hill and Knowlton, Ogilvy Health, Cohn & Wolfe, Burston Marsteller, Buchanan, Ogilvy, Clarion Comms
2. Ketchum Pleon, Fleishman Hillard, Fishburn Hedges, Porter Novelli, Kreab Gavin Anderson
3. Grayling, Citigate, Red, Tonic Life
4. Weber Shandwick, Golin Harris
5. EuroRSCG and Maitland
6. Frank, Hotwire
7. Lexis, Bite

With the latest inflation figures and earnings growth being announced this week there has been a lot of talk about the squeezing of real incomes. A few weeks ago I put together this graph but hadn’t got round to publishing it.

The graph shows the trend in average real earnings (the black line) based on earnings growth less the CPI measure of inflation since 2000. I used CPI to reflect buying power though some might suggest RPI would be better to reflect total living costs. However I suspect the story would be similar. The future data is based on the May Bank of England quarterly inflation report and I have assumed earnings growth of 2.5% per annum for the next two and half years.

You can see that the trendline steadily rises to a peak in March 2008 when on average we were around 22% better off apparently than eight years before.

Since then things have gone rapidly south. The graph estimates we are about 5% worse off now than in March 2008 and will be a further 4% worse off by the end of December 2013. In fact by the end of December 2013 the analysis predicts we will be only as well off on average as we were at the end of 2004, nine years earlier.

But worse still is the “Expectations Gap”. This represents the difference between what we would have expected had the pre recessionary trend continued and what we are actually likely to experience.

This gap says we are 11% worse off now, and will be 18% worse off at the end of 2013 on average than we expected to be.

No wonder it feels so painful.

A few weeks ago whilst discussing the timing of a FIR interview with me on the value of press releases (which is now published here by the way) Shel Holtz asked me if I had any plans to update the research. As it had been over 18 months this seemed a good idea so I booted up Excel and here are the results

1,044 releases were analysed from those distributed in the 6 months from September 2010 to March 2011
Coverage is data is based on RealWire’s Proveit coverage tracking and evaluation service
79 were Social Media News Releases (releases related to 62 different companies, across 21 different industry sectors)
965 were “Traditional” Releases  (releases related to 339 different companies, across 28 different industry sectors)

So overall the sample of SMNRs achieved over three times as much editorial/blog coverage on average (15.7 pieces v 5.0 pieces) as the “traditional” releases.

Some examples from different sectors of high performing SMNRs include releases by Panasonic, Alterian, 3M, Warner Bros, Rolls Royce and Aviva.

As with the previous analysis I think one of the primary reasons for the difference in performance is that the additional investment that can often be required to produce an SMNR – multimedia assets, links to background research etc – means that they are used for stories that the sender perceives are potentially high impact and therefore likely to be of interest to a wide audience.

Another reason could be the lower proportion of B2B releases in the SMNR sample. However I am not necessarily convinced this is the case as there are plenty of examples of B2B releases in the traditional sample that performed to a similar level as the best performing B2C SMNRs.

As I indicated in my interview with Shel I think it is more likely that a higher proportion of traditional releases are more informative in nature e.g. new appointment, new customer, financial results, tradeshow attendance etc. These stories are of potential value to relevant publications, but it is likely that the number of such publications will be lower than where the release is around a broader topic of conversation e.g. research, market changes, new products etc. If people would find this of interest then let me know in the comments as further study of the nature of the releases themselves might shed some more light.

In the meantime on a short promotional note it is good to see that our overall pickup stat of 80%+ of releases gaining editorial/blog coverage still compares very favourably with our competition

Independently Adam Sherk last month used PRFilter to look at how often buzzwords are used in releases – read more about it here. We  in turn thought it would be interesting to look at which technology brands, topics and products have been talked about most in press releases over the last couple of months. As an industry there is a lot of time and money spent analysing what the media writes/talks about, but what are PRs trying to talk about and do the two things fit?

Thats why we have produced our first PRFilter Technology PR Rankings. These rankings analyse the tens of thousands of releases indexed by PRFilter each month and look for the most talked about technology brands, topics and products within them.

Highlights from this first month (February 2011) include:

A presentation of the full details of the Top 25 technology brands and the Top 50 technology topics/products can be found here or view below.

This first month’s rankings demonstrate that a large number of stories are being created around certain brands and topics and not all of these are necessarily in areas that are likely to provoke great interest from the media.

We hope that producing these monthly rankings will assist public relations practitioners in developing a higher proportion of stories that journalists and bloggers find of interest and lead to improved coverage for the companies concerned.

As this is the first month there are bound to be things we could do better or information people would like to see next time so please let us know in the comments.

We have also started with Technology because that was the sector PRFilter was initially focussed on when it was first launched. However if there is demand we will look to expand the rankings to cover other sectors. Again feel free to let us know.

Note: If anyone is aware of any funding rounds not included below, have specific information on any of the assumptions made or can spot flaws in my calculations please feel free to highlight them in the comments.

First round – July 2007

This is the trickiest element as I don’t think terms of this deal were ever disclosed. Techcrunch reported at the time an estimate of $1-$5m of funding raised. It was later reported that the deal size was net funding after costs of $4.8m. The unknown factor though is what level of equity Union Square Ventures (the first VC) received in return for this investment.

In the absence of any firm figure for this dilution we need to make an estimate. This was obviously a pretty early stage investment at a relatively significant ($5m) level so one could expect the dilution to be fairly significant. We also know from the Second Round (see below) that almost a year later Twitter was valued pre investment at $80m. So balancing these factors lets assume a pre investment valuation for the first round of $20m which would mean that ownership post First Round would have been:

Founders – 80 per cent
VC – 20 per cent

This estimate is highly material to the rest of the calculations as it sets the initial level of founder ownership that all other rounds will then dilute. In the conclusion below I indicate the impact of different assumptions for this round to the current level of ownership.

Second Round – May 2008

Investment size was reported this time at $15m with a pre investment valuation of $80m. Post investment this gives revised ownership of:

Founders – 67.4 per cent
First Round VC – 16.8 per cent
Second Round VC – 15.8 per cent

Third Round – February 2009

Investment reported at $35m with a valuation of $250m though it is not clear if this is pre or post investment. If we assume pre this gives the following ownership post investment:

Founders – 59.1 per cent
First Round VC – 14.8 per cent
Second Round VCs – 13.9 per cent
Third Round VCs – 12.3 per cent

Fourth Round – September 2009

Investment size reported at $100m with a valuation of $1bn. Again not stated whether pre or post so lets assume pre gives the following ownership post investment:

Founders – 53.7 per cent
First Round VC – 13.4 per cent
Second Round VCs – 12.6 per cent
Third Round VCs – 11.2 per cent
Fourth Round VCs – 9.1 per cent

Fifth and latest round – December 2010

Investment reported at $200m at a valuation of $3.7bn. Again not stated whether pre or post so lets assume pre gives the following current ownership estimate:

Founders – 51.0 per cent
First Round VC – 12.7 per cent
Second Round VCs – 11.9 per cent
Third Round VCs – 10.6 per cent
Fourth Round VCs – 8.6 per cent
Fifth Round VCs – 5.1 per cent

Conclusion

This analysis would estimate the Twitter Founders ownership at 51 per cent with a valuation approaching $2bn.

If you vary the First round dilution assumption you get the following alternative estimates for the current level:

NB It is also worth noting that if the valuations for rounds 3, 4 and 5 were all post investment valuations this would lead to an additional dilution in all the ownership percentage figures of approximately 3.25 per cent i.e. 51 per cent would fall to 49 per cent. The valuation figures would also all fall by approximately 8 per cent as the post investment current valuation would be $3.7bn not $3.9bn ($3.7bn valuation + $200m investment).

James Holland – Editor, Electric Pig “Catering to the whimsy of fickle journalistic tastes is no easy task, but the intelligent tuning behind PR Filter shows great promise. A service that cuts the clutter, and brings me news I can actually use? Sign me up!”

Stuart Miles – Owner/Editor, Pocket Lint ““PRFilter looks to be the service that will help me get the news I want and filter out the press releases I don’t”

To date the use of technology to solve the issue of irrelevant or badly targeted PR content has been relatively limited. Database structures used for press release targeting are generally based around categorisation or perhaps keywords. Depending on the level of granularity this can often result in a poor match of a particular press release to individual journalists or bloggers.

Recently new language analysis based databases have started to be released that look at a journalist or blogger’s output in order to try and identify those who talk about a particular topic the most. This improves the intelligence of the approach for the sender if they use such tools effectively.

But even tools such as these do not address the issue from the individual journalist or blogger’s perspective. They don’t allow the recipients themselves to decide how relevant something must be to get their attention. Meanwhile spam filters or rules based inbox systems are often crude or time consuming to manage.

At RealWire we thought we would try and take a different approach. Having built a system to improve the targeting of our own distribution (which we will be applying in the coming weeks) we decided to go further. We asked ourselves – what if we could adapt the system to provide relevant releases to individual journalists and bloggers across thousands of releases a day from multiple sources?

So after months of development, in a bold experiment to both demonstrate our filtering technology and as a potential solution to the issue of irrelevant PR we have built PRFilter.

We believe PRFilter is something different:

Like the language analysis databases, PRFilter’s active interest technology™ builds a profile of a journalist or blogger’s interests from their own, or their publication’s, published articles. It then refines and updates this profile as new articles are published.

But then it flips things on their head and applies this profile to an inbound aggregated stream of press releases from multiple sources, presenting the individual journalist or blogger with the releases it thinks are most relevant to them – in a given time period, in selected geographies and even on a certain topic.

The user can then set their own personal relevance threshold and subscribe to alerts which pass this test (currently via RSS, other notification systems to follow). They can even train the system to improve its predictions by providing feedback on when it is right and wrong.

Making finding relevant stories a quicker and easier task and ensuring that senders of PR know that when their releases are indexed by PRFilter they will be seen by the most relevant media.

As the quotes above show we have already had some great feedback from initial beta testers, but like all beta applications we know it won’t be perfect and are keen to get feedback from all interested parties. Either contact me @AdParker, [email] adam@realwire.com, follow @PRFilter or register your interest in a beta account or updates here.

We selected ten sites each from the following areas – UK Nationals, Business, Marketing, Technology and Consumer. There was no particular selection process, just an attempt to have a reasonably representative sample and we both hasten to state that this is a relatively limited exercise which should therefore be taken with at least a pinch of salt. Particularly since indexed urls have been used as a proxy for content as this can be impacted significantly by site structure (as stated in slide 21), with some sites having sub domains and/or a more complex content directory structure.

However at the same time with the data that is readily available we think it provides some (arguably) valuable food for thought. So after several hours of research, number crunching and graph generation here are the results (I suggest you view in full screen mode unless you have excellent eyesight):

Site data is sourced from Google for the number of indexed urls via the “site:domain” command and from AdPlanner for the traffic data.

However they don’t mention the following three crucial issues about the traffic to their site.

1. That volume of traffic is clearly going to be affected by quantity of content.

2. The time visitors actually spend reading their content.

3. The relevance of those visitors to the content.

At RealWire we are always keen to make sure that discussions are based around the facts so let’s look at each of these in turn to see how our readership, engagement and relevance are all in fact apparently superior to Big Wire Corp’s.

Quantity of content

Q: Which is the more “popular” of the following two sites?

Site A – 1 piece of content and 1,000 page views in a month
Site B – 1 million pieces of content and 1 million page views in a month

Well according to their literature Big Wire Corp would apparently see Site B as a more popular destination because it has 1,000 times more page views. Makes sense, bigger is better right? Wrong.

Site A’s one piece of content has been viewed 1,000 times, whereas each of Site B’s stories has only be viewed once on average. Now which site is more popular? Site A of course.

Now let’s apply this concept to Big Wire Corp’s website.

First of all let’s get an idea of volume of content. The Google “Site:[url]” command gives you the number of unique pages indexed by Google on a particular site – a good proxy for the amount of content.

In this case the answer is 406,000.

Next we need an idea of traffic to the site. Google AdPlanner provides estimates of monthly page views.

In this case the answer is 7.5 million

If we then divide page views by content, we get an estimate of the number of views per article per month. Answer 18.5.

RealWire’s equivalent data from the same sources is
Content – 5,500
Page views – 200,000* (less than 3% of Big Wire Corp’s figure)

This gives 36.4 page views per article per month.

Twice the Big Wire Corp figure suggesting RealWire has higher readership for each article.

*I happen to know that the page view figure is too high in RealWire’s case (we do have analytics of course) but it could equally also be so for Big Wire Corp and so until I can get a hold of actual numbers for them I am being consistent.

Engagement

Q: Which of these two sites is engaging its readership the most?

Site A – average time spent on each page 2 minutes

Site B – average time spent on each page 5 seconds

Site A obviously. Each of the readers are spending 24 times longer reading an article on average than on Site B.

So let’s apply this to Big Wire Corp again.

Again Google AdPlanner can help. It tells us how many visits the site receives and how long each one lasts. From this we can get Time spent per Page as follows:

Big Wire Corp numbers

Time spent per visit = 3 minutes 50 seconds (230 seconds)
Total page views = 7.5 million
Total visits = 3.5 million

Time spent per page = 107.5 seconds or 1 minute 47.5 seconds

RealWire numbers

Time spent per visit = 8 minutes (480 seconds)
Total page views = 200,000
Total visits = 64,000

Time spent per page = 153.6 seconds or 2 minutes 33.6 seconds

43% more than Big Wire Corp suggesting readers of RealWire content are more engaged.

Relevance

Q: Which of these two sites is most likely to have the most relevant readership to a UK relevant story?

Site A – 100% of visits from the UK

Site B - 1% of visits from the UK

A: Site A – Yes I know these are getting ridiculously easy now!

Big Wire Corp’s market report focusses on US usage of their site when comparing themselves to others such as RealWire. However given that the vast majority of their content is from US companies it will come as no surprise that the vast majority of their traffic does as well. Google Ad Planner again helps us out.

US traffic – 76% of total

But the majority of RealWire’s clients and therefore content are from the UK. So what’s Big Wire Corp’s UK traffic like?

UK traffic – 3% of total.

And RealWire’s UK traffic? Well AdPlanner estimates around 75% but the real figure is nearer 45% or 15 times the Big Wire Corp figure.

Suggesting that RealWire’s traffic is around 15 times more likely to be relevant.

Conclusion

When evaluating traffic between sites it is imperative that you don’t get drawn in by the size of headline traffic numbers and that you consider:

a) normalising traffic for levels of content

b) how engaged the readers are

c) how relevant the readers are

Or you could find yourself reaching some very misleading conclusions. Just ask Big Wire Corp

* Hattip to Andrew B Smith for highlighting the value of Google Adplanner for such analysis

As comforting as this figure might be to all of us working in, or with, the PR industry my own take on the figures suggests that the picture may not have been quite so rosy.  I estimate that a reduction of around 5-10 per cent is probably a more realistic range and is more consistent with David Brain’s analysis yesterday from a global perspective.

This conclusion is based on an analysis of the changing make up of the table and other supporting evidence.

For clarity PR Week’s 2010 league table is based on income generated in calendar year 2009. Similarly the 2009 league table is based on income generated in calendar year 2008. 

Analysis of the league table positions

The table below shows the income that an agency had to achieve in each of the last two years in order to be ranked at the particular positions shown in the league table;

The table shows that to achieve a particular position in 2010 requires significantly less income at all levels compared to the 2009 league table. For instance to be ranked 25^th in the table this year required an income of £7.52m, but to achieve the same position last year required £8.35m, a 9.9 per cent reduction.

Excluding the change at the 150^th position the reductions are between 8.0 and 14.4 per cent with an average of 10.9 per cent.

In producing this table I have made adjustments for new entrants and mergers to make it more accurate:

2010 New entrants

Of the agencies that were new entrants into the Top 150 this year six of them would have been included in last years list had they submitted their figures. I have added these into 2009’s list for consistency.

Mergers

The numbers are also affected by the mergers of Grayling/Trimedia, Ketchum/Pleon and Tonic/Huntsworth Health. In these cases I have also combined the income for the three combinations in 2009’s list as well in order to compare like with like.

Other evidence that doesn’t fit with the headline estimate

Agencies joining and leaving the list – is it a fully representative sample?

It would appear that Stephen Waddington’s challenge to the industry to submit their numbers for the benefit of all has gone unanswered by some. 30 agencies (excluding those that have merged) that were in the top 150 last year do not appear in the 2010 league table.

Between them these agencies had total income in 2008 of £67.2m and varied in size between £13.80m and £1.13m. Given that the 150^th position agency in the 2010 league table has income of £0.44m these agencies would have needed to have suffered a reduction in income of between 61 per cent and 97 per cent to have not made the cut.

This seems highly unlikely and what I suspect is more likely is that these agencies just didn’t submit figures this year. Obviously individual agencies could have any number of reasons why they chose not to, or were unable to, submit figures. However the absence of 20 per cent of last year’s list begs the question as to whether relying on just those who have submitted represents a valid sample. Have some agencies chosen not to submit numbers for fear of how they might look? Is the table therefore more likely to be biased towards those that performed better?

It is impossible to calculate a sensible estimate of the impact of these absences, but it does seem reasonable to question whether the sample, that the 0.75 per cent growth figure was based on, is truly representative.

Performance of the major Marcoms groups’ PR brands

The major global Marcoms groups that publish figures for PR specifically performed as follows in 2009:

WPP is organic change from 2009 analyst report
Interpublic from PR Week article 17 March 2010
Omnicom is organic change from 2009 analyst report

It is obviously possible that the UK elements of these businesses performed better than the rest of the world. However given that the UK recession was amongst the longest and deepest and in the absence of any specific data to the contrary, I would take these figures as they stand.

Between them these three groups account for approximately £2bn in PR revenues worldwide and these figures would also indicate a reduction of approximately 5-10 per cent.

Conclusion

It was clearly going to be a challenge for PR Week to pull together a robust analysis this year due to the optional submission nature of the list. However I think there is significant evidence to suggest that the headline performance of slight growth is more than a little misleading.

But what do agency heads think? Is my estimate of minus 5-10 per cent nearer the mark?