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The North American PR sector had a better year in 2024 than many anticipated, according to results from an annual survey conducted by PR merger and acquisition consultancy Gould+Partners.
Gould+Partners’ report, which surveyed North American public relations firms on their revenue and profitability performance in 2024, found that half (50 percent) of the agencies surveyed revealed an increase in net revenues in 2024. Only about a third (34 percent) reported a revenue decrease last year.
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| Rick Gould |
The report also found that 57 percent of the firms surveyed reported profitability increases (operating profit) in 2024. Earlier projections for the first nine months of the year had estimated that only 47 percent would see an increase in profits, suggesting that firms had a particularly strong fourth quarter. Gould+Partners Managing Partner Rick Gould told O’Dwyer’s that this 10 percent swing was “major,” and said that it “shows tightening management” and a “focusing on the bottom line.”
Profitability was especially high among firms with between $10–25 million in annual net revenues (64 percent). They were followed by firms with between $3–10 million in revenues (63 percent). The largest firms (those with more than $25 million in annual net revenues) saw increased profitability among 56 percent, and 49 percent of the smallest firms (net revenues of less than $3 million) experienced profitability.
When it comes to net revenue gains, the firms earning between $10–25 million in annual net revenues saw the biggest gains this year (72 percent). For firms making more than $25 million, 50 percent reported an increase in net revenues. 51 percent of firms with revenues between $3–10 million saw net revenue growth and 41 percent of firms with revenues of less than $3 million saw net revenues increases.
Billing rates were also up at 51 percent of agencies last year, a number that Gould said “appeared very high” and “surprised” him. Utilization/productivity, on the other hand, was at only 42 percent.
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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 profitability (79 percent) and also reported a 55 percent increase in net revenues. In southern California, 72 percent of firms gained in profitability while only 45 percent of gained in revenues. In northern California, 67 percent of firms showed increases in both profitability and net revenues. In the Midwest, 54 percent of agencies saw profitability while 38 percent experienced revenue gains.
In the U.S. Northeast, 50 percent experienced profitability and 58 percent saw revenue growth. In the Southwest, 44 percent of firms revealed net revenue gains and the same percentage reported profitability growth. In the U.S. Southeast, 42 percent of agencies experienced increased profitability while 55 percent reported revenue growth. In Canada, 42 percent of PR firms saw profitability and 50 percent showed an increase in net revenues. Only 20 percent of PR firms located in Washington, D.C. and its surrounding suburbs showed an increase in net revenues, the smallest gains out of any of the regions ranked, although 40 percent reported profitability.
More than a third of firms surveyed (39 percent) expressed confidence in the U.S. economy, compared to 30 percent who said they have a negative outlook on the current economy.
Finally, the report also found that 21 percent of the firms surveyed reported an increase in staff working in the firm’s physical office full-time. Earlier projections had that number at only 13 percent, suggesting that PR pros are returning to the office at a faster rate than previously anticipated.
“I believe this will increase as time moves on, especially since the federal mandate, which is endorsed by most CEOs, that staff in the office are more efficient, with higher billability/productivity,” Gould told O'Dwyer's.
Gould+Partners’ “2024 Financial Trend Report” was based on responses from more than 100 PR firms based in the U.S. and Canada.
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