Glory Days for PR Come to an End

The bull market that the PR and communications industry has seen for the past few years is showing some signs of wear, according to the newly released Davis+Gilbert Public Relations Industry Trends Report 2025.

The report, culled from information supplied by 181 firms, reveals an industry in which optimism, as well as revenues and profits, is taking a hit.

While 50 percent of the firms surveyed said they expect to see a hike in revenues for this year over last year, that number is down from 57 percent in the 2024 report. More than a third (35 percent) say they expect revenues to fall—only 22 percent made that prediction last year.

Fewer firms are expecting to see profit boosts as well. Half of the firms (50 percent) in last year’s report anticipated a rise in profits. That number dropped to 44 percent in the 2025 edition of the report. In addition, the number who think their profits will fall rose seven points—from 25 percent to 32 percent.

Larger firms seem to be better able to withstand the hurdles of the current economic climate than do their smaller peers. Almost seven out of 10 (69 percent) firms with between 100 and 200 employees expect hikes in profits for the year, with almost as many (67 percent) of firms with more than 200 employees making the same claim.

Those numbers drop considerably for smaller firms, with only those employing between 10 and 29 people coming close to the mega firms, at 61 percent. Out of the firms with fewer than 10 employees, only 32 percent expect an economic boost for full-year 2025.

On the mergers and acquisitions front, things are slowing down as well, with 62 deals reported as of Oct. 15 of this year, as opposed to 79 in the same period last year.

For a majority of firms, the biggest cost they face is employee compensation. About eight out 10 firms (82 percent) spend at least half of their net revenue on compensation, and for more than a third (37 percent) that number tops 60 percent.

That’s the highest number ever recorded in Davis+Gilbert’s report and is an increase of five percent from last year.

Efforts to “right-size” workforces as a method of managing compensation have seen some changes this year. In last year’s survey, 12 percent of firms said they were using layoffs to align their staffing needs with revenue. This year, that number is up to 20 percent. Another jump was seen in the number of firms that didn’t replace departing employees—from 39 percent last year to 44 percent this year.

But firms also are aware of the need to attract, retain and train top performers. Among the top areas in which trainings are given—artificial intelligence (76 percent of firms), client management and growth (50 percent) and leadership skills (47 percent).

The dominance of AI for firms is now just about complete, with 99 percent reporting that they use it in some form. Written content creation (79 percent) and note taking/summarizing meetings (75 percent) are at the top of list for uses of AI, with ChatGPT (63 percent), Gemini (12 percent) and Copilot (11 percent) coming in as the top platforms.

One of the biggest drops is in the prominence firms are giving to their diversity, equity and inclusion efforts. In the latest survey, only 21 percent of firms noted an increase in their DEI programs, with 62 reporting no change and 17 saying there was drop. That a big change from 2022, when 60 percent of firms reported an increase in hiring from historically underrepresented groups.

“Firms are facing real challenges in growing both revenue and profits, especially as client budgets tighten and expectations rise,” said Michael Lasky, Chair of Davis+Gilbert’s Public Relations Law Practice. “But as we’ve seen in this year’s data, firms that are prepared — those that invest in talent, technology and strategic alignment — are better positioned to lean into opportunity and be agile in the face of uncertainty.”