When it comes to the budget for spend on PA consultancies, the picture is very mixed, with 30% saying it has increased, 31% saying it has decreased, and 39% saying there is no significant change. Moreover, 67% say there is some flexibility in unlocking additional budget.

TRENDS IN PURCHASING PA SERVICESA Grayling Public Affairs Survey

Introduction

From 5 August to 8 September 2017, Grayling Public Affairs ran a pan-European survey with some 300 PA/GR professionals (from across a range of sectors including ICT, FMCG, energy, healthcare, transport) to assess the trends in purchasing PA services, the objective of which was to understand how the corporate world selects and retains their PA consultancies.

50% say the demand for PA services will increase in the next 2-3 years.

55% primarily recruit their consultants via a formal call for tender/RFP.

82% shortlist their consultancies based on an existing relationship, whilst 71% go by word of mouth referral. Only 29% undertake online research.

81% use consultancies for monitoring and political intelligence, and 58% for lobbying and advocacy campaigns.

90% of organisations work, or have worked, with PA agencies, with 76% viewing them as an extension to their team.

The three most important criteria when selecting consultancies are policy expertise; team chemistry and connections with decision-makers.

€50,

000

- €10

0,00

0

€500

,000

+

NOVEMBER 2017

57% do not recruit agencies based on multi-market briefs, largely because clients do not necessarily adhere to the hypothesis that just because an agency is strong in one market, it is automatically strong in others.

The most common yearly spend on PA consultancies is between €50,000 and €100,000 (30%), followed by the “above €500,000” bracket (21%).

The person responsible for the RFP within the organisation is the most important decision-maker in the decision-making process, ahead of procurement and senior executives.

Nearly half (49%) have a preference for a mix of retainer & project work, with the next popular being a retainer fee (24%).

The biggest trends to shape PA in the years to come are: political instability and the rise of populism (58%), corporate accountability (56%), and digitalisation of communications (52%).

12 3POLICY

EXPERTISETEAM

CHEMISTRYCONNECTIONS WITH DECISION-MAKERS

90%

30%31%

39%

56% 52%58%

76%82% 71%

29%

81% 58%

55%

57%

49% 24%

21%

30%

About the survey

ObjectiveTo understand how the corporate world selects and retains their PA consultancies

Timeframe Survey ran between August 15th and September 8th 2017

Participants Some 300 PA/GR professionals

About the respondents:

79% have a regional/global remit; 40% have a consultancybackground

About the respondents’ organisations: 25% of ICT companies and 21% in consumer goods; PA sits under various functions depending on companies (corporate affairs; communications; legal; etc.)

SECTOR WHERE PA SITSIN THEIR ORGANISATION

ICT

FMCG

ENERGY

OTHER

HEALTHCARE

FINANCIAL SERVICES

TRANSPORT, TRAVEL& TOURISM

MANUFACTURING

25%

21%

11%

9%

9%

9%

8%

8%

SITS UNDERCORPORATE AFFAIRS

SITS UNDERCOMMUNICATIONS

STANDALONE FUNCTION

SITS UNDER LEGAL

OTHER

28%

21%

21%

19%

11%

90% of organisations work or have worked with PA agencies; they consider their consultants as an extension of the team

80% of organisations seek support from PA consultants for monitoring and political intelligence and 58% for lobbying, advocacy and stakeholder management

Does your organisation work with PA consultants?

For what services do you/would you seek support from PA consultants?

IF YES, WHY?

• Need hands on deck/extension of the team • Need specific expertise that is not available in-house • Need to be challenged, get third party views and strategic advice • Other: Need local knowledge in countries that are not home country of PA/GR lead

76%

57%

57%

2%

IF NOT, WHY?

• No perceived added value • The PA/GR function is provided in-house • PA activities piloted via trade associations • Budgetary constraints • Prefer to use law firms • Prefer to use management consultants

63%

63%

38%13%13%

2%GEOGRAPHICAL REMIT CONSULTANCY BACKGROUND

Regional Global National Yes No

Key findings in detail

Yes, currently Yes, in the past No

81%

58%

56%

48%

40%

37%

33%

29%

23%

19%

10%

10%

4%

4%

MONITORING & POLITICALINTELLIGENCE

OTHER: ACCESS TO HIGHLEVEL OFFICIALS

LOBBYING & ADVOCACY CAMPAIGNS

STAKEHOLDER ENGAGEMENT

STRATEGIC ADVICE

ISSUE & CRISIS MANAGEMENT

COMMUNICATIONS MATERIALS

EVENT MANAGEMENT

TRAINING

REPUTATION SURVEYS

CEO PROFILING

REGULATORY AUDITS

SOCIAL MEDIA CAMPAIGNS

MEDIA CAMPAIGNS

71%

19%10%

51%

21% 28%

60%

40%

No Yes It depends

Multi-market briefs are not the norm, mostly because of the belief that an agency very strong in one market is not necessarily strong in another

Do you usually recruit agencies based on multi-market briefs?

The direct client is the most important decision-maker, ahead of procurement and senior executives

Policy expertise, personality fit and access to decision-makers are the most important criteria mentioned to select agencies

How important are the following criteria to select your consultancy?

(From 0 not being important to 5 being critical)

IF NOT, WHY NOT?

• The trend is to work with several boutique agencies with specialist knowledge in a particular area. The era of a single brief with one agency is gone. • Different languages, cultures, regulatory landscapes. • An agency that is an expert in one field in Brussels may not be an expert in Washington, Berlin, Shanghai or Dubai. We need experts of both the local markets where we operate and of regulations applicable to our industry. • Locals know markets better and are more flexible and agile. • It is rare to have an agency that is very competent in several markets.• Belief that agencies are only as good as the people in the team.• We leave the decision-making up to the local teams to ensure we get the best partners based on local requirements. • Different markets require different levels of support. Knowledge of local policies and a good local network of contacts will always take precedence.

Organisations primarily recruit PA consultants via a formal RFP process; yet they also recruit consultants via more informal processes

What's the weight of each decision maker in the final decision making process?(Low : 1; Medium : 2; High : 3)

1.67 1.492.55 2.33

Person responsiblefor the

RFP/relationship

Global Head of Government Affairs

Procurement CEO

How do you recruit PA consultants?

Formal call for tender/RFP followed by

a pre-selection and pitch process

Informal process, based on existing contacts and

discussions

Brief circulated to a few agencies and decision

based on written proposals

Other: consultancies retained on a global basis; need to be on

preferred suppliers list

55% 41% 37%

6%

Existing relationship and word of mouth/referral get consultancies shortlisted in most cases; few organisations go down the route of online research

How do you shortlist agencies contacted for a certain brief?

Existing relationship Word of mouth/referral Online research Other: PR Week profiling, preferred suppliers list, purchasing guidelines

82% 71%

29%

10%

4.41

4.06

4

3.98

3.67

3.65

3.61

3.57

3.49

2.63

1.1

POLICY EXPERTISE

SPECIALIST KNOWLEDGE

VALUE FOR MONEY

CREATIVITY

REPUTATION

AWARDS

PERSONALITY FIT/CHEMISTRY WITH THE TEAM

CONNECTIONS WITH DECISION-MAKERS

TRACK RECORD OF SUCCESS/CASE STUDIES

SENIORITY OF THE TEAM/ADVISORS

MULTI-MARKET PRESENCE/NETWORK

57%

14%

29%

Respondents prefer a mix of retainer and project fees; very few want to be invoiced based on timesheets; and there is some flexibility to unlock additional budget when necessary

39%

31%30%

36%

18%

46%

Some flexibility

No flexibility

High flexibility

What’s the level of flexibility to unlock additional budget to respond to PA threats ?

67%

17% 16%

It did not changesignificantly

It increased

It decreased

How did this budget evolve in the past 3 years?

60% of respondents spend up to €200k a year on PA; and 39% spend more than €200k -there is no clear pattern ofchange in the past 3 years.

Note that only two thirds of respondents accepted to disclose such financial data.

What’s your yearly average spend on PA consultancies?

What are the biggest trends that will shape PA in the next 2-3 years?

High and increasing

Low, value of PA well understood

High and remainingconstant

How’s the need to demonstrate the value of PA in your organisation ?

Most respondents believe that the demand for PA services will increase over the next 2-3 years but at the same time the need to justify the value of PA is very high

How do you think the demand for PA services will evolve in the next 2-3 years?

Russell.Patten@grayling.com

Twitter @TheEULobby

www.grayling.eu

Political instability, corporate accountability and digital advocacy are perceived as the three biggest trends that will shape PA in the years to come

€ 0-50K € 50-100K € 100-200K € 200-300K € 300-400K € 400-500K Above € 500K

15%

21%

15%

9% 9%

30%

0%

Demand will increase Demand will remain stable Demand will decrease

50% 46%

4%

What’s your preference in terms of financial arrangement?

Retainer fee Project fee Other: whateverprocurement wants

16%24%

49%

4%8%

Mix of retainer and project work

Invoicing of actual hours based on activity reports

58% 56%

52%

38%

10% 10%

Political instability and

rise of populism

Push for corporate transparency and

accountability

Digitalisation ofcommunications

Grassroots advocacy,

facilitated by social media

Shift of power to the East and rise

of China

Other: data-driven GR; issue

specialisation; professionalisation

of PA in CEE

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