PR spending patterns change in China

10 April 2013
BEIJING: Brand owners in China are set to boost the share of their PR budgets spent online from the current level of 29% to over 50% in four years' time, a report has predicted.

A study by R3, the consultancy, looked at 212 client-agency relationships in the country, and found not only that more PR funds are being directed to "ePR", but that resources are increasingly being channelled through digital agencies rather than PR ones.

Overall, some 44% of "ePR" spend now goes through their digital partners. "Marketers are trading up to the digital speed and savviness of digital shops," Sabrina Lee, general manager of R3 Beijing, told Campaign Asia-Pacific.

"PR agencies need to invest in and enhance their digital capabilities," she warned. Otherwise the length of client-agency relationships, already standing at a modest 2.4 years on average, could become even shorter.

The nature of those relationships is changing in other ways, too, as the study observed a rise in the number of agreements operating on a project-only basis.

More than a third of marketers currently work in this way, while only 23% pay an annual retainer fee to agencies.

It is, remarked Lee, "a dynamic marketplace right now". She added that less than half of companies were willing to commit themselves to a single PR agency, and some were working with as many as five.

A further development noted by the study was a rise in marketers' use of their company's procurement teams to negotiate terms with PR agencies. These divisions were involved in more than 65% of cases.

At the same time, marketers were seeking external assistance in setting benchmarks as they sought to get the best possible value out of their agencies.

Data sourced from Campaign Asia; additional content by Warc staff
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