The nation’s PR agency field grew by just 6.6% last year, according to a new survey from PR-focused merger and management consulting firm Gould+Partners. The results of this survey were consistent with the results of the annual Best Practices Benchmarking report released in June, showing that operating profit decreased from 16.2% to 15.3% and the firm’s Billing/Utilization report issued in July, which showed that billing rates did not increase during 2015 at the same pace as salaries and costs.
Based on stats from 215 PR agencies coast to coast and in Canada, all categories of firms had less growth than the prior year. The $3-10 million group had a growth rate of 10.4%. Another interesting stat was the average annual net revenues for each net revenue class—firms under $3 million averaged $1.7 million in net revenues, while firms from $3-10 million averaged $5.8 million. Firms over $10-25 million averaged just under $16 million, and firms in excess of $25 million averaged just over $117 million, according to Rick Gould, CPA, J.D., managing partner and director of the survey, in a news release.
The second part of the study focused on industry growth in the 10 regions of our focus and average net revenues for each of the regions.
“The major takeaway is that billing rates have been flat for two years in a row,” Gould told Bulldog Reporter. “Growth slowed down, from 9.8% in 2013, to 6.6% in 2015, with profitability decreasing from 16.2% in 2014, to 15.3% in 2015. Productivity is also down, with a 90% goal not being attained by most firms.”
Gould added, “To get back on track, [PR] firms need to raise rates as they give salary increases, raise retainers as they give salary increases and utilize time management software tools. Firms also need to practice full transparency and show their clients time analysis.”
The survey is the fourth annual poll focused on Net Revenue Growth by Gould+Partners, which has been conducting other industry wide surveys for 20 years including the recently released Best Practices Benchmarking Report and the Billing/Utilization Report.
Source: Gould+Partners; edited by Richard Carufel