North American PR agencies saw lower revenues and dwindling profits in 2024, according to results from an annual survey conducted by PR merger and acquisition consultancy Gould+Partners.
The Gould+Partners’ report, which tracked North American PR firms across 21 critical benchmarks, found that, on average, PR firms saw net revenue growth—calculated as fees plus mark-ups—of only 1 percent in 2024. That number suggests a downward trend, as it reveals a decline from 2023’s 3.1 percent, itself also a decline from 2022’s 9.4 percent.
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Agency profitability was down last year as well. According to the survey, average operating profits—the key metric by which Gould valuates PR firms—was 16.6 percent. This was down 2 percent from 2023’s 18.6 percent and also another drop from 2022’s 18.7 percent. In fact, 2024 revealed the lowest average profitability since 2019’s 17.4 percent.
According to the survey, operating profits were highest among firms with net revenues between $3–$10 million (19.5 percent). The largest PR agencies—or agencies boasting more than $25 million annually—came in second place, seeing operating profits of 18.6 percent. Firms accounting for between $10–$25 million in net revenues saw operating profits of 13.8 percent. The smallest firms surveyed—those with under $3 million in net revenues—witnessed operating profits of 6.4 percent.
Budget cuts and consolidation were among the reasons for firms’ declines in operating profits, according to Gould+Partners Managing Partner Rick Gould. Operating expenses averaged 21.2 percent in 2024, down from 22.2 percent in 2023. Gould also noted that average total labor costs increased last year among PR agencies to 62.7 percent, up more than 3 percent from 59.2 percent in 2023.
“That is too high to run a highly profitable agency,” Gould told O’Dwyer’s.
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Gould also said that account salaries were high last year: an average of 44.3 percent of revenues. According to Gould, the goal should ideally be under 40 percent.
Agency billing rates, meanwhile, remained roughly the same as last year.
The Gould+Partners report also found that, among the 10 regions ranked, PR firms stationed in the Midwest were the most profitable in 2024 (boasting an average operating profit of 21.3 percent), followed by firms in the Washington D.C. area (20.4 percent). Firms located in Canada came in third (18 percent), followed by the U.S. Southeast (16.2 percent), the U.S. Northeast (15.1 percent), the NYC metro area (14.5 percent) and California (14 percent). The U.S. Southwest bottomed out the list for the region with the lowest operating profits (12.4 percent).
Gould+Partners’ “2025 Best Practices Financial Benchmarking Report” was based on responses from 37 “model" PR firms based in the U.S. and Canada. Responses were collected between March and May and were based on 2024 financials.
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