Public relations in Hungary 1996

Dr Péter Szeles

Executive Director, Star PR Agency/WORLDCOM Hungary
President of the Hungarian Public Relations Association

The Hungarian Public Relations Association celebrated its sixth anniversary in 1996. The association and the profession is young, but the market ia dynamic.

More than 40 companies provide public relations services for a range of clients. Most are one- or two-man agencies or consulting firms, but there are approximately ten companies that provide a full service. (Although precise figures are not yet available, the Hungarian Public Relations Association is currently conducting a national survey in order to formulate a clear picture of the current situation in public relations and provide a more detailed characterisation of those who work in it.) The public relations companies that are operating in the market are classified by the Budapest Business Journal each year on the basis of the information that they provide. For each agency, this survey contains the agency's annual revenue figures, the number of employees, the names of its most important clients, the year in which it was founded, the languages that are spoken and used within the firm, network affiliations, and data pertaining to the agency's management.

According to professional estimates, the Hungarian public relations market is currently estimated at HP2-3.5 billion (approximately US$13-23 million), and it continues to grow at a dynamic pace. The upcoming launch of PHARE- and World Bank-financed communications projects, which will most likely increase the size of the public relations market many times over, will play an important role in the market's growth. These are especially related to the disadvantageous phenomenon of changes in lifestyle (diet, smoking, sports, etc) and various political and government processes (joining the European Union and NATO, environmental protection education, privatisation, etc). A basis for comparison is presented by the approximately HUF30 billion (US$200 million) in total business that is annually generated by the advertising business. This value might continue to grow at a fairly rapid rate if the liberalised version of the new advertising law that is currently before Parliament is passed since the advertising business had previously lost considerable revenue because of the prohibition on advertising pharmaceutical products and alcoholic beverages. After legal liberalisation, increased activity can be predicted in these sectors (approximately HUF45 billion or US$300 million in terms of total business).

The most dynamic growth is found in the government sector, since the projects with the highest volumes and longest lives are launched almost exclusively at the government level by government organisations (ministries and agencies). In accordance with the provisions of the public spending act that was passed into law a few years ago, government agencies must announce tenders for every HUF10 million project, which is a significant factor that invigorates and activates the market. Lobbying is also considered a dynamic area.

The business sector and companies are still characterised by more modest activity. Foreign joint ventures and multinational companies are leading the way. Companies that are fully Hungarian-owned are only just becoming familiar with public relations, and their inclination toward PR is shaped particularly by the great increase in media rates and the rationalisation of their advertising and market-making costs.

The most underdeveloped and slowest growing area of public relations is sponsoring and inside PR. The gradual and ever widening spread of the market economy is resulting in strong market competition and the often ruthless struggle and fierce fight for consumers. Since unemployment is still high, inside PR, the evaluation and maintenance of employees as a capital factor, is still a neglected area that has been pushed into the background of Hungarian public relations. At the same time, the fierce rivalry emphasises the Hungarian Public Relations Association's activities and responsibilities in this area and compliance with the provisions of professional ethics.

As a result of the above, most of the clientele have very high standards (PHARE, government agencies, and multinational companies), and the rest concentrate almost totally on media coverage and the volume of publications. Those in this latter group do not often request consultation and they usually refrain from the advice of public relations consultants.

There are several companies that conduct public relations research and provide subsequent evaluation. These include Gallup, Szonda Ipsos and Median. Their work and the funds devoted to it are receiving more public recognition, especially as a result of political opinion polling.

Public relations has already received public recognition in Hungary, and although there is still a lot to do in the area of professional recognition, from a business point of view public relations in Hungary might possibly constitute one of the most dynamic markets in the region.

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