It’s no secret that the COVID-19 pandemic battered the marketing and communications world. As a result, revenue growth in the PR sector fell to a record low last year, according to an annual industry survey conducted by PR merger and acquisition consultancy Gould+Partners.
The Gould+Partners survey, which is focused on net revenue growth—calculated as fees plus mark-ups— found that PR industry growth stalled at 3.1 percent in 2020, down 2.2 percent from the 5.3 percent the industry produced in 2019.
According to Gould+Partners, it’s the lowest growth year since Gould+Partners began tracking PR industry growth rates in 2013.
Among the PR agencies surveyed in the study, only the largest shops—or agencies boasting more than $25 million in net revenues—showed positive growth. Among the remaining firms—agencies with net revenues between $10-$25 million, agencies bringing in between $3-$10 million and those with under $3 million in net revenues—all showed decreased growth.
“I was not surprised at all to see the growth at just 3.1 percent,” Gould+Partners managing partner Rick Gould told O’Dwyer’s. “I thought it would possibly be ‘negative’ industry growth, based on the other four surveys we took during the 2020 pandemic year.”
When broken out by region, PR firms located in Southern California saw the highest average net revenue growth last year, at 16.9 percent. Firms in the U.S. Northwest came in second, at 7.1 percent, followed by firms in the Washington D.C. area (6.4 percent) and firms in the Southeast (6.1 percent). Northern CA firms (5.3 percent), Canadian firms (4.8 percent), Northeast firms (3.2 percent), Midwest firms (2.6 percent) and firms located in the New York City metro area (1.1 percent) followed. Firms in the U.S. Southwest saw the lowest average net revenue growth last year, at .4 percent.
Gould+Partners’ “2021 Net Revenue Growth Report” was based on responses from 211 PR agencies located in ten regions across North America.