Spending on external IR services declines
The amount companies spent on external IR services declined last year, if only marginally, according to the IR Magazine Global Practice Report 2016.
Companies globally spent an average of 30 percent of their IR budget on external services such as targeting, webcasting and content management systems, finds the report, which is based on the responses of more than 1,300 IR professionals.
Over previous years, the proportion of the budget spent on external services has crept up as overall budgets have fallen. In 2016, however, both the overall budget and the amount spent on outside services declined.
The findings come as companies in Europe, as well as other regions, consider the potential impact of Mifid II, which is predicted to shake up the research industry and could result in companies doing more of their own marketing.
Speaking on an IR Magazine Webinar earlier this year, Lyndsay Wright, director of IR and internal communications at William Hill, said smaller companies could struggle to maintain coverage post-Mifid II. The far-reaching regulation’s deadline for implementation is the start of next year.
Looking at the findings by region, North America-based respondents spent 35 percent of their budget on external services, notably higher than the global average. For the average company this represents an external spent of $202,000.
In Europe, companies are keeping more of their budget in-house. These respondents on average put aside 27 percent of their overall budget for external IR services, which in cash terms stands at $116,000.
Asia-based respondents have the lowest IR budgets regionally and also the lowest proportional spend on external services: 22 percent. For the average respondent, this equates to $50,000 spent on IR services.