Article by Francis Ingham, Chief Executive of ICCO

The ICCO & PRWeek World PR Report is the definitive analysis of where the global PR and comms industry stands today; how it has been performing over the past year; and what it predicts will happen in the next few. Drawing on the breadth and depth of ICCO’s membership – 37 national associations, operating in 48 countries, and representing more than 2,500 agencies – it is a vital tool in understanding our industry.

What are the headlines?

Agency heads are optimistic. On a scale of 1-10, there is a global average of exactly 7. The most optimistic markets are the UK (8.1), and the Middle East (8.0); the least are Latin America (5.9), and Africa (6.0).

And they are expecting an increase in profitability, with a score of 6.2. Leading the pack is North America (7.2), followed by the UK at precisely 7. At the other end, we have Latin America again (5.2), and Western Europe (5.7).

Both of those findings deserve celebration, given the at times tempestuous and uncertain state of the world economy. What is driving this performance? I would highlight three factors, which we have seen for the past few years now, and which are remarkably constant region-by-region.

The first is chief executives taking corporate reputation seriously. Quite simply, the business community around the world is more aware than ever before of the fact that their most important asset is their reputation.

The second is that marketers are taking their spend away from other disciplines, and diverting it into more effective mediums of PR and comms. And the third is that clients are increasingly asking public relations firms to provide non-traditional services.

Those last two points amount to one incontrovertible trend – in an increasingly integrated marketing world, PR’s nimbleness, insight, and creativity is beating the competition.

What have been the main practice areas of growth?

Four stand out head and shoulders above the rest – digital comms; corporate reputation; marcomms; and public affairs. And when agency heads are asked to predict which sectors will drive growth over the coming years, they name exactly those four again.

Obviously, there are variations by region, reflecting different local priorities, and different levels of market maturity. But the message is clear – those areas have driven growth in the past, and are set to do so again in the future. Looked at by sector, we again see four key areas of growth now and in the future – technology; consumer; healthcare; and financial and professional services. And underpinning all of this behaviour is the crucial role PR and comms agencies now play in social media and community management, and in creating content across the whole range of media – areas where wise agencies are making significant investment. So far, so encouraging.

But what of the challenges faced by the industry?

It will come as no surprise that two perennial ones are right up there – meeting profit margins, and handling general economic conditions. The first is a symptom of PR’s inability to charge appropriately for the value it delivers – former ICCO chairman Richard Houghton’s regular lament that ‘Fridays are free’; the second is something over which we have no control.

The area where we certainly have the ability to make a difference is talent. In six of the nine world regions, it tops the bill as the key challenge. In fact, only in Asia does talent not rank in the top three. Although our industry continues to power ahead, its growth is being hindered by our failure to attract and then to retain the very best.

Within that challenge are two specific areas of concern: hiring senior staff, and attracting people from non-traditional background. The latter is of particular concern to ICCO. If agencies keep on recruiting the same type of person, with the same type of background, they are automatically excluding themselves from large parts of the market. The more varied teams are, the abler they are to deliver excellent services to the widest possible range of clients.

I would make two final observations: First, and it is a point made by several contributors from different regions, the industry has reached a happy place of maturity. Social media and content may be the biggest areas of growth, but there is still room for the older skills of PR and comms, such as media relations. And that place exists in established and developing markets.

There is, quite simply, a home for all branches of our profession.

Second, what a brilliant time to be in this industry. Even in difficult economic circumstances, PR and comms agencies are profitable, growing, and optimistic.

How would I sum up the future? Bright. And getting brighter.

Download a free copy of the ICCO & PRWeek World PR Report 2016 here.