Cautious optimism for 2011 : CPRFHK

The estimated total Hong Kong public relations firm industry annual billings are approximately US$171 million with some 2,000 staff working in the sector serving an estimated 2,865 corporate and institutional clients.

Revenue from the financial and professional services sector nearly doubled on a percentage basis since 2008, while revenue from the technology sector decreased by around half. 

Consumer marketing (35 per cent), corporate communications (25 per cent) and financial communications (15 per cent) were identified by respondents as generating the highest percentage of the public relations consultancies’ fees. However, just five per cent each reported that events and public affairs constituted the highest percentage of their revenue.

The majority of firms responding also showed cautious optimism that billings will rise in 2011 helped by strong growth in China, but moderated by tight marketing budgets among multinational corporations recovering from the financial crisis. 

“The performance of public relations in Hong Kong is a bellwether for overall economic performance and confidence in Hong Kong,” said Simeon Mellalieu, chairman of CPRFHK and GM of Ketchum Hong Kong.

“We expect companies and other organisations to increasingly turn to public relations firms to help maximize the value of communications to achieve their objectives in 2011, but at a moderate and steady rate reflecting the overall conservative economic mood.”

The CPRFHK study also highlighted concerns from respondents about the possible impact of writing down the value of staff time spent on client work, rising rents and indemnity insurance on billing rates and profitability.

Mellalieu added, “While it is good to see fee revenues increasing across the PR agency sector, profitability is clearly being squeezed from many different directions. To ensure sustainable business growth, it is essential that all agencies manage client budgets transparently and responsibly and clearly demonstrate the value of their work in a quantifiable way.”

The study, conducted among 29 CPRFHK member and non-member firms, captures a comprehensive snapshot of industry practices and trends in the utilisation of public relations firms.