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Interel has made available the results of their first annual survey of the global public affairs industry.
The survey polls CEOs from 35 independent public affairs consultancies which make up Interel’s global network, providing a fantastic insight into the opportunities and challenges for the public affairs industry over the next year.
Fredrik Lofthagen, Interel Group CEO, said: “The survey result show that the public affairs industry is growing both in-house and on the agency side and that growth is fuelled by increased political and economic uncertainty in the wake of the financial crisis.
“The trend is towards globalised public affairs support from multi-national clients, which is why Interel recently launched a Global Practise to handle worldwide accounts which we deliver through our Global Partnership of over 30 independent public affairs consultancies with a presence in some 45 countries and a team of over 1000 consultants”.
The survey results, which point to an industry which is confident and in good health, are available to download in full by clicking on the graphic to the right. A summary of the findings is available below.
Industry has poor reputation but perceived as important by business
The public affairs industry continues to view itself as being important to business. Only 7% felt that public affairs doesn’t really make a difference.
However, the industry itself is not widely recognised and when it is, it is not well respected and often seen as a branch of public relations.
That said, the industry is engaged at the top table with the main client contact cited as being CEO, group or regional Heads of Public Affairs or Director of Corporate Communications. Only 4% reported to a Head of Public Relations.
Increased budget is also being made available in response to instability following on from the financial crisis. Business clearly sees public affairs as being important.
Globally the industry is not well regulated with just 20% saying they were subject to legislative regulation. Only 14% of respondents said they were obliged to publically register their clients with only 8% bothering to declare if not legally required to do so.
Looking forward, however, 50% of the respondents expect some form of regulation within the next 12 months.
Significant budget is being made available
The overwhelming view was that the public affairs will continue to grow with 72% predicting increased budgets over the next 12 months with subsequent rises in income from retained clients and increasingly project work which is growing faster than traditional retainers.
Agency income is projected to continue to grow over the next five years. 84% of agencies intend to hire new staff in the next 12 months and also report an on-going increase in the size and prevalence of in-house teams.
The main growth sectors are health, technology and consumer (including food and drink). The core service offering remains lobbying, stakeholder engagement and issues management.
Growth trend driven by political uncertainty and changing technology?
Growth is being driven by a combination of more regulation, increased political risk and changing demands from business.
60% of respondents say that businesses are very concerned about increasing political risk and 40% say they are somewhat concerned with 88% saying this represents a stark change of attitude since the start of the financial crisis.
Over the same time frame 92% of respondents said the amount of regulation affecting businesses in their market had increased with governments becoming more focused on the short term with 60% believing this is making it more difficult to do business and only 20% citing more regulation as helpful to business.
Continued globalisation and changing technology is at the heart of the trend. Some 52% believe governments have become more susceptible to global trends in the last five years. 68% also believe that governments are being influenced by social media. Interestingly only 32% of public affairs agencies surveyed so far employ a digital director.
How government has changed?
44% also said that governments now listen to business more than they did five years ago with 52% saying trade associations had the most influence and only 4% saying public affairs professionals had influence.