PR firms increased their hourly billing rates in 2020 even in spite of the significant damage the industry took as a result of the COVID-19 pandemic, according to results from an annual survey conducted by PR merger and acquisition consultancy Gould+Partners.
The Gould+Partners’ report, which focused on the hourly billing rates and staff utilization at agencies by size, region and specialty, found that the average PR agency billing rate increased substantially in the last year, to $240 per hour in 2020, up from $193 per hour in 2019.
Moreover, billing rates also increased across every staff position, from the chief executive all the way down to the account coordinator. PR agency president/CEOs billed at an average hourly rate of $417 in 2020, compared to $360 in 2019; EVPs and SVPs charged $366 per hour last year, compared to $325 in 2019; VPs charged $319 compared to $285; account managers billed $256 per hour versus $238; senior account executives billed $217 compared to $190; account executives billed at $179 versus $160; and account coordinators charged $143 versus $125.
Not surprisingly, chief executives at the largest PR shops—or agencies boasting more than $25 million in net revenues—saw their average hourly rates go up the most last year, billing an average of $483 per hour in 2020, compared to $452 in 2019. Presidents/CEOs at agencies bringing in between $10-$25 million saw their billing rates decrease to $388 in 2020 from $391 in 2019. Firms with net revenues between $3-$10 million saw an uptick, at $400 per hour in 2020, compared to $380 in 2019. Presidents/CEOs at the smallest firms polled—those with under $3 million in net revenues—billed at an average hourly rate of $307 last year, down from the average $320 they billed in 2019.
|Average billing rates and utilization among staff at North American PR agencies (2020 vs. 2019).|
“At every level, billing rates increased, showing that firms did not reduce their rates in a pandemic year,” Gould+Partners managing partner Rick Gould told O’Dwyer’s. “The most profitable firms did not give in to clients requesting rate decreases. This certainly explains in some way why overall profitability increased in a pandemic year.”
The survey also discovered that the utilization rate among PR staffers, the metric by which productivity is measured, also improved, yet remains below optimal levels. For example, account executives last year billed out only 86.5 percent of their theoretical yearly capacity of 1,700 hours.
Finally, the Gould+Partners report found that chief executives at PR firms stationed in the New York / New Jersey region billed, on average, far more per hour than agencies in other parts of the country, followed by firms located in Canada, the U.S. Northeast, Northern California, the Southeast and the Midwest.
Gould+Partners’ Billing Rates & Utilization report was based on responses from 37 “prominent, best of class” North American PR agencies. Responses were collected in May.