BEIJING – Friday , March 27th , 2015 – The austerity pressures hitting the rest of China’s industries have clearly found their way down to marketers and their relationships with their PR agencies, according to a new study by independent consulting firm, R3.

“57% of marketers now rate “Cost of Service” as a most important factor, up from 17% in our 2013 wave” said Sabrina Lee, Managing Director of R3. “From this result alone, we can see the new face and challenges of the PR industry in China.

Sabina Lee, Managing Director, R3 China

R3 met with over 150 marketers and corporate communications leaders over the last four months, covering more than 215 different PR agency relationships across more than 60 agencies. This is the third wave of the study, but the first one with such dramatic cost outcomes. “Unfortunately, People Quality has moved from the #1 factor on Most Important to #7, and the demand for creativity has never been higher” said Ms Lee. “Based on the key reasons to change agencies, a lack of creativity is now cited as the number one reason” she added.

Procurement involved more than ever before

The study also tracked the involvement of procurement now in contract negotiations with PR agencies – with 72.5% of companies declaring that they lead the way, up from 65% in 2013. “The most progressive of PR agencies have understood the importance of procurement and have invested in Commercial Directors to work more closely with them” said Ms Lee. “It’s clearly a global trend for the industry and the entire procurement sector has matured a lot in five years” she added

PR’s Grip on Digital Under Threat

Despite the massive increase in Social Media since the 2013 study, China marketers have still been reluctant to engage their PR agencies in Digital marketing – with just 23% using them as lad agency

“Perhaps more than any ‘traditional agency, the future of PR in China has to be digitally centric” added Ms Lee. “We’re seeing more and more acquisitions in this sector in China than all the others combined, PR must continue to play an active role” she added

Alibaba , Coca-Cola lead amongst marketers

When asked to name the best peer marketer at Public Relations in China, local tech giant Alibaba was most mentioned, followed by Coca-Cola. With such a successful IPO around the time of the fieldwork, there were few better success stories than this. Other peer companies recognized for their PR approach included Xiaomi, BMW, Durex and Mercedes Benz.

Ogilvy Public Relations, Blue Digital lead amongst agencies

As in the 2013 study, WPP’s Ogilvy PR and Bluefocus’ Blue Digital stood out in term of perception amongst all the marketers surveyed. “Both these agencies have taken different paths to growth in China – and beyond – but both are equally reaping the rewards of a long term strategy” added Ms Lee.

The survey will go back into field again at the end of 2016.

About R3 PR AgencyScope

In-depth, Face to Face Study, covering over 215 PR agency relationships

The China PR and Social AgencyScope is now in its third wave, with previous research conducted in 2011 and 2013. It complements the China Creative, Media and Digital AgencyScopes, last conducted in 2014. The Study aim is to understand the latest marketer-agency engagement trends, and perception and performance of more than 60 Public Relations agencies in China.

In-depth face-to-face interviews were conducted with senior Chinese marketing decision makers from China’s top marketing companies, providing comprehensive data and insights to help agency networks and marketers forecast and benchmark their businesses. The study is conducted every two years in China, making it the most robust independent tracking measure of Chinese agencies and their client relationships.

ABOUT R3

R3 is a global marketing consultancy, focused on improving the effectiveness and efficiency of marketers and their agencies. Founded in 2002 , it works with nine of the world’s top twenty global marketers, including Unilever, Coca-Cola, AB InBev, Unilever, Diageo, Samsung, Nestle, JNJ and Mercedes Benz. For more information, visit www.rthree.com, or contact Talia Tay at [email protected] +86 21 5271 6505