state of indian public relations industry: 2016 · 2016-09-30 · approach to current market size...

www.feedbackconsulting.com

© Feedback Consulting - 2016

Final Report

September 2016

Deepak H | Chanchal Jetha

State of Indian Public Relations Industry: 2016

Emerging Sectors Business Unit Disclaimer: This report is solely for the use of PRCAI (Client) & specific companies that PRCAI decides to share. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from Feedback Business Consulting Private Ltd

http://www.feedbackconsulting.com/

2© Feedback Consulting - 2016

# Table of Contents

1 Objective and Approach

2 Industry Structure and Market Size (Current and Past)

3 Market Share Analysis

4 Industry Challenges

5 Future Outlook


Engagement Objective and Approach

PRCAI appointed Feedback Business Consulting to carry out a study

to understand the current status, size, share, trends and forecast

of the PR Industry in India

The survey was conducted between August – September 2016,

Covering 42 Companies in all

Mode of data collection: Online / web survey and qualitative

discussions with specific companies

All individual company information has been maintained

confidential by Feedback Business Consulting. Only aggregate level

analysis have been shared In the report & for all discussions

Note: All Analysis and Interpretation in the current report is based on views and information shared by the survey participants. Feedback Consulting does not hold responsibility to the information correctness or accuracy

Sample Coverage

ApproachedResponded to websurvey

Members 35 25

Non Members 27 7

Total 62 32

Annual Reports Analyzed of companies who didn’t respond

10

Total Sample Companies Analyzed

42

Approach to Current Market Size Estimation

Boutique

All companies met ~Judicious sample of medium & Boutique players was covered to meet the engagement

outcome

Aggregated to arrive at the large player market contribution

• Average turnover of the companies established based on the sample data

• Extrapolated to the universe to arrive at the total contribution of each player

• Aggregated to arrive at the total market• Revenuee share by Geography, Services offered, Customer segments based on sample covered

Players classified based on turnover levels

Very Large Medium

Universe Estimation of PR Industries in India

Secondary/Desk Research

Primary Interviews

Based on the secondary data available, market size will be built

Source of data- Annual Reports

Information from Primary

Interviews will be

validated with the

Secondary data

Large Freelancers

~ estimated based on

primary data


Industry Structure and Market Size (Current and Past)



Indian Public Relations Industry Structure

Company Category Very Large Cos Large Cos Medium Cos Boutique Cos Freelancers

Number of Companies 4 4 10 100 1000

Turnover Range FY 16 (Rs.

Crs)> 60 30 - 59 11 - 29 1 - 10 <1

OperationsPresence in 8+ cities Presence in all

MetrosPresence in 2- 3 locations

Present majorly in North

Present in one city

1,100+ companies estimated to be present

The Indian public relations industry is quite developed considering every major global agency operates in India today. There is intense competition for business and clients have more choices than ever, from home grown to global firms, specialist agencies and freelance consultants – all of which are vying for much of the same business

Source: Feedback analysis of Survey information, Annual Report, Qualitative Discussion, Feedback assumptions where necessary


Public Relations Industry Size (Rs. Crs)

490

630720

830940

1,120

FY08 FY12 FY13 FY14 FY15 FY16

6.5%14.6% 14.7% 13.3%

19.3%

Year on Year Growth Rate

Growth of only 6.5% was observed from FY08 to FY12 due

to the economic slowdown in the Industry in FY10 and

FY11, though the industry was anticipated to grow at 15%

during the survey in the year 2008

xx%

CAGR FY 08 – FY 12 : 6.5% CAGR FY 12 – FY 16: 15.5%

Industry recovered from the slowdown in FY13, FY14. FY16 was a better year

for the PR Industry in India where a growth of 19% was observed

Values in Rs. Crs


Company Category

FY13 FY14 FY15

Overall

Very Large

Large

Medium

Boutique


Profitability Percentage by Company Structure

0%

14%

7%

12%

10%N = 26

N = 3

N = 2

N = 4

N = 17

N = 30

N = 3

N = 1

N = 4

N = 22 2%

14%

10%

13%

12%

8%

12%

7%

13%

11%N = 21

N = 1

N = 1

N = 3

N = 16

The profitability of small companies has increased from 0% in FY13 to 8% in FY15Very Large, Large and medium companies, the profitability ratio has been the same from FY13 to FY15

Source: Annual Report

Profitability percentage is Profit/Revenue

No data

Market Estimate by Company Category

Very Large25%

Large25%

Medium16%

Boutique25%

Freelancers9%

4 Companies

8 Companies

10 Companies

50 Companies

Very Large33%

Large14%Medium

16%

Boutique28%

Freelancers9%

4 Companies

4 Companies8 Companies

100 Companies

9

Base: Rs. 490 Crore

Revenue Share by Company Category in FY 08Base: Rs. 1,120 Crore

Revenue Share by Company Category in FY 16

-11%

3%

The % change from FY08 to FY16 by company category 0%

8%

• The Industry has seen consolidation at the top of the pyramid, resulting in very large players gaining higher market share, while the bottom has expanded with respect to the number of players, with lower growth in revenue

• Large & Medium Players may not be comparable because of the consolidation that has happened in the industry

Note: In FY 08 the company categorization was: Very large: Rs. 30 – 50 Crs, Large: Rs. 10 – 29 Crs, Medium: Rs. 5 – 10 Crs, Boutique: Rs. 1 – 5 Crs

0%



Revenue Per Employee Trend by Company Category

Source: Feedback analysis of Survey information, Qualitative Discussion, Feedback assumptions where necessaryNote: Outliers have been removed in specific categories

Total number of people employed in the Indian

PR Industry:

~7,750

Average Revenue per employee:

Rs. 14.5 Lakh

Number of new employees added every

year:

~ 5 – 10% of total employed

Attrition rate of PR industry:

28%

21.0

24.0

18.7

22.0

15.6

18.0

12.3

25.0

A V E R A G E M A X I M U M

AVERAGE & MAXIMUM REVENUE PER EMPLOYEE ( RS. LAKH PER ANNUM)

Very Large

Large

Medium

Boutique

Market Share Analysis



Revenue Share by Geography

West, 38%

North, 38%

South, 20%

International, 4% East, 1%

• Although Very large and large firms have offices in the East part of India, they don’t have any revenue coming in form there

• Delhi in North, Mumbai in West and Bangalore in South are where the offices are located majorly

• Large firms have 11% of their revenue coming from International business

Share of Revenue for Sample Companies Covered (N = 29) Base = Sum of Revenue = Rs. 580 Crs (Base = 100%)

N = SampleSource: Feedback analysis of Survey information, Qualitative Discussion


Revenue Share by Services Offered

68%

11%

5%

5%

4%3% 2%

1% 1%

Public Relation

Digital & Social Media

Public Affairs

Financial Communication

Crisis & Risk Management

Content Management

CSR

Research & Analytics

Others

• The heart of the business was Public Relations and Public Affairs

• Digital and Social Media are gaining significant market share (11% in FY 16)

• CSR, Content Management and Research and Analytics are seen as insignificant revenue contributing segments for most firms

Share of Revenue for Sample Companies Covered (N = 31) Base = Sum of Revenue = Rs. 665 Crs (Base = 100%)


Revenue Share by Services offered

Large firms are adapting to the change in the PR industry and driving their revenues from Digital and Social Media, However verylarge firms are slow in doing the same

Category of companies

No. of companies

Base (INR Cr.)

Breakup by Service offered

Very Large 4 375

Large 3 100

Medium 8 110

Boutique 18 75

76%

43%

70%

62%

8%

23%

12%

11%

3%

7%

9%

6%

3%

7%

3%

6%

10%

4%

5%

7%

2%

4%

3%

8%

3%

7%

Public Relation Digital & Social Media Public Affairs Crisis & Risk Management

Content Management Financial Communication Others


Revenue Share by Project Vs Retainer Business

New clients are shifting away from retainer based relationship in favour of a project based relationship model Medium sized companies have the maximum retainer business and very large sized companies have the least retainer business

Category of companies

Sample Cos

Base (INR cr.)

Breakup by Project Vs. Retainer business

Overall 28 545

Very Large 3 245

Large 4 150

Medium 7 95

Boutique 16 55

74%

67%

77%

86%

74%

26%

33%

23%

14%

26%

Retainer Project


Revenue Share by Customer Segments


Segments Overall Very Large Large Medium Boutique

Government 4% 2% 5% 3% 2%

Private 96% 98% 95% 97% 98%

ICT 21% 28% 17% 18% 7%

Financial Services 12% 19% 5% 7% 7%

FMCG & Retail 9% 4% 10% 19% 9%

Start-up’s (Across sectors) 6% 2% 6% 19% 5%

Food & Beverage 5% 3% 8% 5% 5%

Auto OEM’s & Auto Components 4% 3% 9% 3% 4%

Aviation (including Aerospace) 4% 3% 5% 5%

Education & Skills 4% 3% 7% 7%

Energy 4% 4% 7% 2%

Healthcare Delivery 4% 3% 5% 3% 11%

Sports & Entertainment 4% 5% 4% 4%

Chemicals 3% 2% 5% 7%

NGO’s 3% 5% 5% 6%

Travel & Hospitality 3% 5% 4%

Others 10% 17% 5% 3% 22%

N= 30 3 3 8 18

Base (INR cr) 560 270 100 110 75

Industry Challenges



Challenges for Future Growth

67%

52%

55%

83%

73%

69%

68%

90%

80%

93%

26%

21%

28%

14%

17%

28%

29%

7%

13%

7%

28%

17%

3%

10%

3%

3%

3%

7%

7%

Digital not owned completely by anyone

Increase in the number of bad debt cases

Lack of Technology Investment by PR Agencies

Lack of Integration between stakeholders

Brands / Clients becoming impatient for results

Low Business Entry Barrier

Lack of Measurement Tools

Increasing Price Pressure

Talent Retention

Availability of Talent

Agree Maybe Disagree

Talent Pool Availability and Retention seen as a biggest challenge in the Industry, while the issue of price pressure continues

4.55

4.00

3.97

3.77

3.74

3.65

3.61

3.23

3.19

3.19

Mean Score N = 31

Scale of 1 – 5

“Increasing Need for Result Oriented Approach”

LOW

HIGH



Hiring of Talent Pool in FY 16 and FY 17 (Intended)

27%

10%

43%

23%

47%

47%

Other professional services

Research and analytics

Graduate colleges

Advertising and Marketing

Journalism

Rival Agencies

37%

20%

37%

57%

30%

13%

Other professional services

Research and analytics

Graduate colleges

Advertising and Marketing

Journalism

Rival Agencies

N = 28

Hiring of Talent pool by PR Firms in FY 16

N = 28

Hiring of Talent Pool by PR Firms in FY 17 (Intended)


Firms are currently hiring from Rival agencies and graduate colleges (Journalism) to plug the immediate talent gap

Firms intend to hire from Advertising and Marketing cos / students as Creativity and Digital Media is a major requisite for PR companies


Desired Skills Expected from PR Executives

18%

26%

44%

39%

48%

71%

77%

67%

79%

86%

93%

90%

29%

48%

44%

46%

37%

14%

19%

23%

14%

14%

7%

10%

54%

26%

11%

14%

15%

14%

4%

10%

7%

Paid Media

CSR

Measurement and Analytics

Multimedia content creation

Crisis Counsel

Research

Digital build and protection

Marketing and Business development

Social Media Community Management

Insight and Planning

Creativity

Media Relations


4.50

4.18

4.00

3.75

3.43

3.25

3.21

2.96

2.86

2.82

2.25

1.54

Mean Score N = 29

Scale of 1 – 5

LOW

HIGH

Creative individuals with social media community management skills in demand

Increasing need for specialized individuals in Business Development & Marketing and Research


Spend on Training and IT: Seen as an key investment area to bridge the talent gap

23000

21000

13000

6000

14000

Small

Medium

Large

Very Large

Overall

2.0%

3.0%

3.0%

4.0%

3.0%

Small

Medium

Large

Very Large

Overall

Spend on Training per Employee in INR ‘000

N = 18

Spend on IT

N = 21

© Feedback Consulting - 2016 21


• The average training spend of the PR industry is half of the service industry spend

Sizable investment on IT by the PR firms

Future Outlook



Drivers of Revenue Growth

41%

43%

62%

89%

81%

77%

81%

88%

72%

86%

22%

37%

31%

7%

7%

12%

19%

12%

21%

14%

37%

20%

8%

4%

11%

12%

7%

Increasing FDI Investments

Improving Economic Conditions

Technology Interventions

Specific Customer Sector Needs & Growth

Increased PR Effectiveness

Increased Awareness of PR

Social Media Intervention

Digital Communication / Visuals

Cross Selling by PR firms

Content Driven Campaigns


3.58

3.45

3.39

3.39

3.35

3.35

3.23

3.10

2.94

2.58

Mean Score N = 31

Scale of 1 – 5

LOW

HIGH


• New Business Areas and Retention of account ( Cross Selling) to Drive growth

• Increasing Awareness & Effective are key enablers of growth

• Needs of specific customer is changing, increasing cost of service


Public Relations Industry Future Forecast

1120

13601570

1810

2100

FY16 FY17 FY18 FY19 FY20

21.4% 15.4% 15.3% 16.0%

Growth Rate

• The Indian PR Industry is expected to grow at a rate at about 17% from FY18 - FY20 according to the estimates made by the players

• The very large companies are very optimistic about the growth in the industry in the next 3 years• Digital, Social media and Content driven campaigns will be the game changers in the Industry and may contribute to as high

as 25% of the revenue share

xx%

Next 3 Year Forecast as Predicted by Company Category

Future Forecast (Overall Assessment)

18.5%

8.8%

14.5%16.5%

Very Large Large Medium Small

Source: Feedback analysis of Survey information, Qualitative Discussion, Feedback assumptions where necessary

Values in Rs. Crs

CAGR – 17.0%


Key Trends Foreseen in the Public Relations Industry

The ratio of retainer vis-à-vis project model for new business acquisition was around 70-30 earlier but now there is

a shift taking place, due to an increasingly competitive agency landscape in India and mushrooming of freelancers

wherein clients have more choices than ever before

Companies are having a separate division to specifically cater to start ups

Companies are looking forward for complete integration of all the communication disciplines including PR, digital,

content, advertising and reaching out to multiple stakeholders with a unifying message and story

Upselling in the Industry, variety of products re upsold to the same clients which brings in additional revenue

Storytelling has gone visual and increasingly brands are opting for infographics and videos, hence there has been

an increased emphasis on Visual communication

Source: Feedback analysis of Survey information, Qualitative Discussion

Thank You

Feedback Business Consulting Services Private Ltd.

Email: [email protected]

BangaloreCorporate office

5th Floor,Oxford Towers,139 Old Airport Road,Bangalore – 560008

Tel: +91 80 4062 3800

Mumbai

5th floor, Rustomjee Aspiree,Anik Wadala Link Road,Sion (E),Mumbai - 400 022

Tel: +91 22 6789 8000

Delhi

JA 1018, 10th Floor, DLF Tower A. Jasola District Centre, JasolaNew Delhi - 110025

Tel: +91 11 4653 4653

Chennai

204, Prince Center,248, Pathari Road, Thousand Lights,Chennai – 600 006

Tel: +91 44 4206 1277

© Feedback Consulting - 2016 26

state of indian public relations industry: 2016 · 2016-09-30 · approach to current market size...

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