So far, public relations firms are reporting encouraging numbers for the year, according to results from a survey conducted by PR merger and acquisition consultancy Gould+Partners.
Gould+Partners’ report, which surveyed North American PR agencies on their revenue and profitability performance—for the period beginning January 1, 2024, and ending September 30, 2024—found that nearly half (48 percent) of the firms surveyed this year revealed an increase in net revenues for the first nine months of the year. A little more than a third (36 percent) reported a decrease and 17 percent reported no changes at all.
By contrast, a separate Gould+Partners survey last year found that only 3.1 percent of agencies reported net revenue growth for the year.
The report also found that 47 percent of the firms surveyed reported profitability increases (operating profit) for the first nine months of the year, while 37 percent reported decreases and 16 percent reported no change.
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According to the report, the largest firms surveyed reported some of the highest percentage of net revenue gains this year. Among firms earning between $10-25 million in annual net revenues, 69 percent reported increased revenues this year. When it comes to firms making more than $25 million, 47 percent reported an increase in net revenues. 44 percent of firms with revenues of less than $3 million saw net revenues increase, and 43 percent of firms with revenues between $3-10 million saw net revenue growth.
When it comes to profitability, once again the largest firms saw the biggest gains. Firms with more than $25 million in annual net revenues reported the highest profitability increases (53 percent). But those firms were followed by smaller firms with between $3-10 million in revenues (46 percent profitability) and firms with net revenues of less than $3 million (44 percent). Only 39 percent of firms with between $10-25 million in annual net revenues reported profitability.
The survey also measured PR firm performance by region. Out of all the ten regions included in the survey, the New York/New Jersey region revealed the largest growth in net revenues (67 percent) with 57 percent also reporting an increase in profitability. The U.S. Southeast saw 64 percent of agencies reporting revenue growth and 46 percent experiencing increased profitability. In southern California, 63 percent of firms gained in revenues, and 50 percent gained in profitability. In the Midwest, 50 percent experienced revenue gains and 62 percent saw profitability. In the Northeast, 45 percent saw revenue growth and 55 percent experienced profitability. In northern California, 38 percent showed increases in both net revenues and profitability. In the Southwest, 33 percent revealed net revenue gains and 50 percent reported profitability. In Canada, 27 percent of PR firms showed an increase in net revenues 27 percent and profitability. Only 23 percent of PR firms located in Washington D.C. and its surrounding suburbs showed an increase in net revenues or profitability, the smallest gains out of any of the regions ranked. No PR firms from the U.S. Northwest were included in the survey.
The report also found that 13 percent of the firms surveyed reported an increase in staff returning to the office full-time. Gould+Partners Managing Partner Rick Gould told O’Dwyer’s that he suspects this number will increase, based on discussions he’s had with several CEOs.
“Only 36.1 percent of firms reported an increase in utilization (productivity), which supports the contention of many that staff are more productive being in the office full-time, than being remote or modified remote,” Gould said. “This is always a sensitive topic and we will be watching the responses closely for end of year.”
Finally, the Gould+Partners’ report discovered that 75 percent of firms said they’ve increased the use of AI at their agencies, the largest percentage increase of any category in the survey.
Gould+Partners’ “2024 Financial Trend Survey Report” was based on responses from more than 100 PR firms based in the U.S. and Canada. Responses were collected between October and November.
An updated survey to account for full-year 2024 results is scheduled to be sent out in January.
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