How much should I spend on PR?

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I was chatting to my dear friend and European PR managaer at Pegasystems a few months ago about how many companies should spend on PR as she was preparing a presentation for her management team. Remembering that I hadn’t spoken to her about her findings, but also thinking that it would be an interesting one to share, I asked her if she wouldn’t mind contributing to my blog.

Guest post by Jo Richardson, PR Manager, Europe, Pegasystems
Recently, I spoke to Paul and opened up the difficult debate of what a company should be spending on Marketing and then in turn on PR, it’s a subject that has kept us both very interested in the last couple of months and we have spoken about it a number of times since.

My belief was that it was around 10% – 15% of turnover on marketing.  In fact, I was right and wrong at the same time!  This seems to be a vast subject and each different marketer that you speak to has a different idea on what it should be.  I did some reading, tweeting, posting on Linked in and research and I had figures ranging from 1% – 17% of turnover – so pretty broad ranging!  One thing that I read and deemed to be from a pretty trustworthy source came from the Chartered Institute of Marketing (CIM), which conducts a bi-annual survey of marketing trends and they said,“spending on marketing is continuing to rise, accounting for an average of 7.7% of an organisation’s turnover, up from 6.6% in the last survey. Among small businesses the figure was 8.6% for those with a turnover under £1m, and 8.8% for those with turnover between £1m and £10m.”

Further research to find out what percentage of that marketing spend should be going on PR seems to point to around 40% if you are using agencies, and this does not include Ad-spend.  I would say that based on what I have seen in various companies, all of this sounds like a reasonable guideline.

I don’t know about everybody else, but I think a that gut instinct tells you what you should be spending each month, plus it is dependent on what you have available, or what you inherit as a budget – which isn’t really very scientific and this is exactly why I wanted to find out what it should be, so that I could best advise back into the business.

I’d be very interested in hearing what the rest of you think is reasonable, how you decide what to spend & if you have heard of any other ways of figuring out what the spend should be.