ICCO World report October 2003

Overview
General opportunities
General threats
Best sectors
Best margins
The advance of audited management
Audited accounts
Graduate employment

Overview

The opportunities for the PR market among ICCO's members are mainly local. Each country has its own characteristics which dominate growth opportunities locally. These opportunities may be hosting a world event; the growth of the EU; or the local economic growth.

Weak economies dominate concerns among ICCO members. They create pressure on margins through higher competition and lower budgets. A new element among concerns is the undercutting of rates by individual practitioners who cannot offer the services and professionalism of ICCO member organisations.

The Healthcare and Public sector are the key engines for growth in the world PR markets. These two sectors are well in advance of others as ICCO members identify where the best growth in coming from.

The best margins follow these two strong growth sectors.

The adoption of audited management practices, audited accounts, and the level of graduate recruitment are all patchy. A handful of countries have pushed the acceptance of audited management; others are planning it; a large proportion have yet to tackle the issue.

This report is based on the reports from 21 ICCO member organisations in the following countries:

· Austria · Belgium · Czech Republic · Denmark · Finland · France · Germany · Greece · Hungary
· India · Ireland · Italy · Norway · Portugal · Slovakia · Spain · Sweden · Switzerland · Turkey
· UK and · USA.

Over 640 companies were covered by the survey with over 30,000 employees.
General opportunities
The general growth opportunities for the world's PR markets are mainly local. They hinge around how the local economy is going: well in India. Whether the country has been chosen as a site for a major world event: as Greece has for the Olympic Games. And whether the European Union is to expand and so create local economic activity: it will for Belgium as the host of the Commission; for Austria which is a neighbour for many new members; and it may for the Czech Republic and other European countries which will soon be EU members.

At the heart of these growth opportunities is the issue of whether PR is recognised as an effective tool. In Greece the work to develop the infrastructure for the Olympics is making PR an important tool. In India the growth of the economy is reinforcing the role of PR. In Sweden the growing acceptance of PR is hand-in-hand with deregulation, outsourcing and the adoption of "Anglo-American work habits".
General threats
Weak economies are a main threat to nine of the PR markets covered by ICCO member organisations. This leads to two of them specifically mentioning the pressures on margins. The impacts comes through stagnant or reduced PR budgets, mentioned as a threat by five countries: Finland, Ireland, Spain, the UK and the USA. As Austria reports, this can lead to an over servicing of clients.

A new element is adding pressure on budgets: the role of the independent one-person PR practitioner who, in some cases, may be a journalist without PR skills. This is now of rising concern in five countries: the Czech Republic, Ireland, Spain, Sweden and Turkey.

A further pressure on margins comes from the competition rising from other professions, such as management consultants and advertising agencies. This threat was mentioned by Ireland, Sweden and Turkey.

The instability in the Middle East was mentioned only by Spain as a threat by those countries outside the region.

In three countries the image or role of PR has a problem. It is either not an understood activity or its image has been damaged by local events. This is a threat in Greece, Sweden and Turkey. The reputation of PR in Hungary was damaged by public sector contract issues.
Best sectors
The twin engines of growth in the world PR markets remain the healthcare sector and the public sector. Healthcare has 10 mentions as among the best sectors for growth. In Austria it is the only sector mentioned as best for growth. The public sector/public activities and the EU combined have nine mentions. In Finland it is the only sector for growth.

Five countries are blessed with growth in both healthcare and the public sector: Belgium, Ireland, Turkey, the UK and the USA.

The combined IT and Telecoms sector has risen again. It is mentioned as one of the best areas for growth by the Czech Republic, India and Turkey.

Sectors showing the best growth

Place	Sector/activity	Mentions
1	Healthcare	10
2	Public sector/EU	9
3	IT and telecoms	3
3	Consumer	3
5	Food	2
5	Finance	2
5	FMCG	2
5	Pharmaceuticals	2
5	Services	2
10	Auto	1
10	B to B	1
10	Biotech	1
10	Construction	1
10	Corporate	1
10	Energy	1
10	Litigation support	1
10	Logistics	1
10	Publishing	1
10	Real Estate	1
10	Retail	1
10	Services	1

Best margins
The best margins are following the best growth: Healthcare provides the best margins for six countries: the Czech Republic, Germany, India, Ireland, Spain and the UK.

The whole public affairs sector including the EU follows providing some of the best margins in the Czech Republic, Greece and the USA.

The financial sector provides among the best margins for Ireland, Sweden and Turkey.

In April 2003 the best margins did not follow the most growth in world PR markets. Crisis Management, although a growth market for only one of the countries/regions which identified their growth sectors, was a high profit sector for four. It dropped to two mentions as a strong margin area in October: Spain and the USA.
Best margins
The best margins are following the best growth: Healthcare provides the best margins for six countries: the Czech Republic, Germany, India, Ireland, Spain and the UK.

The whole public affairs sector including the EU follows providing some of the best margins in the Czech Republic, Greece and the USA.

The financial sector provides among the best margins for Ireland, Sweden and Turkey.

In April 2003 the best margins did not follow the most growth in world PR markets. Crisis Management, although a growth market for only one of the countries/regions which identified their growth sectors, was a high profit sector for four. It dropped to two mentions as a strong margin area in October: Spain and the USA.

Sectors/activities showing the best margins

Place	Sector/activity	Mentions
1	Healthcare	6
2	Public affairs/Government/EU	3
2	Corporate communications	3
2	Financial	3
2	IT/telecoms	3
2	Services	3
7	Crisis management	2
7	Pharmaceuticals	2
9	Biotechnology	1
9	Corporate affairs	1
9	Deregulation	1
9	Energy	1
9	FMCG	1
9	Institutions	1
9	Life Sciences	1

The advance of audited management
Countries fall into three groups on the issue of audited management through the CMS. The UK and Germany lead the first group with 100% auditing; Ireland and Turkey are also in the first group with 93% and 80% of members audited.

The second group of countries are those who are undertaking audits or are working on plans for audits. These include Portugal, the Czech Republic, Switzerland and the Slovak Republic.

Other countries have not reported on audited management.

The average for the seven countries with audited management in the April 2003 report was 72%, it reached this high figure because of the total audits in the leading pack.
Audited accounts
Seven countries have PR agencies with audited accounts in the returns from the 18 countries. In five of them all members have audited accounts: India, Ireland, Switzerland, Turkey and the UK. In the Czech Republic it is 16 out of 28 members; in Spain 11%.

In the April 2003 survey six countries/regions had audited accounts, according to the country/regional association's return. India, Turkey and the UK are 100%. The Middle East was at 70%.
Graduate employment
Six countries reported on the level of graduates employed in their PR industry. The lowest reported percentage was 44% for Switzerland. The rest were 70% or above.

In the April 2003 survey a total of 31,807 people were employed in the 18 countries/regions which assessed their employment levels. Where employees were graduates and the country/region provided the numbers, 90% were on average graduates.