Prices are expected to continue increasing in the three years to 2016, in line with the business cycle, due to rising advertising expenditure.
Los Angeles, CA (PRWEB) May 15, 2014
Public relations services have a buyer power score of 3.3 out of 5, indicating that purchasers have a slight advantage when negotiating with suppliers. Price volatility has been low in the three years to 2013 because prices have gradually increased in line with the business cycle, allowing buyers to make off-hand purchases without the risk of price hikes. “However, with market conditions improving and prices inching upward, the balance of power is slowly tipping in favor of suppliers,” says IBISWorld procurement analyst Savannah George. The recovering economy has increased advertising expenditure and the number of US businesses, boosting demand for public relations services. Furthermore, the economic recovery is increasing disposable incomes and consumer spending. Therefore, businesses are looking to invest in their public images and increase brand awareness to capitalize on these growing revenue opportunities.
The market has been consolidating since 2009, which is another reason why buyer power has shifted. “This consolidation has occurred as clients’ demands have expanded due to the introduction of new communications methods and channels through the internet,” says George. Suppliers have struggled to keep up with mounting client demands and have merged or acquired other firms to procure talent and diversify their service offerings. The amount of small, one-man operations, usually operating out of the person’s home, may have increased in the past three years, but merger and acquisition activity among agencies has increased. Overall, this consolidation is reducing the number of full-service providers within the market and allowing remaining players to charge higher fees. Major suppliers of public relations services include Omnicom Group Inc., Interpublic Group of Companies, WPP PLC and Publicis Groupe SA.
These trends are forecast to continue in the next three years, which will boost prices and limit buyer negotiating power. Fortunately, price volatility during this period is expected to remain low as the market and fees continue to grow in line with the economy, preventing any radical price increases. Despite this low volatility, buyers are encouraged to purchase public relations services now before prices increase further. IBISWorld also recommends that buyers look to bundle services or enter longer-term agreements to reduce costs and lock in low rates.
For more information, visit IBISWorld’s Public Relations Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of public relations services. Providers of public relations services facilitate communications between an organization and the public to promote favorable relationships and portray or communicate a desired image or message. This includes media outreach, content creation and press release distribution to communicate with the general public and other stakeholders. Suppliers coordinate directly with news outlets and mass media to maximize a positive image for the organization. This report does not include investor relations, internal relations, event planning, crisis management, paid advertising, media buying, social media, public affairs, social marketing or brand marketing.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.