The 2015 World PR report produced by the Holmes Report and International Communications Consultancies Organisation (ICCO) estimates the size of the global PR agency industry at $13.5 bn, up from$12.5 bn in 2013.
The research also reveals that, for the first time,the Top 250 PR firms in the world cracked the$10 m barrier in terms of fee income, reporting$10.4 bn compared to $9.7 bn in 2013. The world’s Top 10 PR firms account for $4.8 bn, a 5.4% increase on 2013.
The World PR Report again provides the clearest picture available of the global PR industry, based on submissions from more than 400 PR firms across the world. According to the report, the global PR industry grew by 7% with currency volatility helping to soften another positive year for PR firms around the world, according to the 2015 World PR Report.
“A growth rate of 7% may indicate a slower year for the industry after it improved by 11% in 2013,but much of this decrease can be explained by currency volatility, as the Global 250 is calculated in US$. So, while US firms are unaffected (and retain a good growth rate), firms reporting in GBP and Euros firms drag the overall growth rate down,” reads the report’s executive summary in part.
Analyzing the report, Paul Holmes, the Holmes Report Publisher and CEO says, “Industry growth in the high single-digits is encouraging; it certainly suggests that public relations continues to grow faster than the overall economy, which is a healthy sign,” stated.
Adding, “Having said that, there is still a sense that PR could—and perhaps should—be doing better. The things PR does well—engagement and relationship-building—are more critical to successful marketing than ever, and PR is doing more: more social media, more content creation,more data and analytics. It ought to be growing more as a result.
”The report thus reveals that Public Relations firms are benefiting from increased spending on digital and social media activity, with 72% of respondents citing digital and social as one of their top three growth drivers, up slightly from 69.5% the previous year.
In fact, digital was the top growth driver in every region, cited by 85.3% in Asia (the highest score in any region) to 70.4% in the UK—which interestingly was the highest score last year(80.3%) and the lowest score this year.
Social media community management continues to be the strongest driver of growth in the digital and social arena (cited by 55.3% of agency leaders globally), followed by multimedia content creation (39.9%) and digital build and production (28%) but it was interesting to note that traditional media relations continues to becited by a significant number of firms (28.8%)as a major driver of growth. Media relations was particularly important in developing markets such as the Middle East and Eastern Europe.
However, Paul Holmes maintains that much as there has been a lot of focus on the opportunities created by digital and social media, some clients still prefer traditional media.
“It is important to note that many clients still come to PR firms because they want earned media coverage in traditional print and broadcast outlets, and in many markets the ability to deliver that coverage is still a critical success factor.”
“The agency of the future will be one that combines cutting edge digital skills with traditional print media ones. Quite simply, there is demand for both.”
Adding, “In the modern world, the agency with the best strategic insight—whether it’s an ad agency, a digital specialist or a PR firm—will be the agency that leads the overall communications effort.”
“That insight can only come from sound research, and that’s an area where PR firms will need to step up their game if they are going to play a real strategic role.”
The report also reveals a familiar trend in terms of challenges facing the PR industry.
The ability to attract top talent is still the biggest concern for public relations agency leaders around the world according to the survey.
“This year, more than four out of 10 (44%) of consultancy principals around the world cited“staff recruitment” as one of the most significant challenges facing PR firms in their market. That was an increase over last year’s (39.9%),” reads the report in part.
At the same time, there was growing concern over the supply of “intelligent, well-educated talent” for PR agencies to recruit, with agency heads less confident that such a supply existed.“
There is a definite war for talent going on right now, particularly around the senior account manager/account director level. Employers should expect to see their wage bills increase in the short to medium term, as employees ask for more”, said Francis Ingham ICCO chief executive.
Accordingly the report notes that when it comes to sourcing new talent, most PR firms still find it easier to cannibalize their direct competitors—other PR agencies were identified as a key source by 65.6%—than to look elsewhere. Based on its research, the Holmes Report estimates that the global PR agency industry employs more than 85,000 people, up from 80,000 the previous year.
Public vs Independent
Maintaining a trend that has firmly taken hold since the onset of the recession in 2008,independently-held PR firms again comfortably outperformed their publicly-held peers:
“The growth of independent firms is impressive and beggars the question of whether we’ll see their value overtake publicly held firms,”said ICCO chief executive Francis Ingham. “It is intriguing to see that publicly-held firms account for around 42% of the overall market, down from 45% last year – this is perhaps a reflection of the fact that they may have been slightly hamstrung by profit targets to invest as freely in those all-important ‘non-traditional services’ as the independents.” Holmes, meanwhile, described holding company agency growth as “anaemic”.
The Top 10 PR Agencies in the world as of 2015 were;
1. Edelman (USA)
2. Weber Shandwick (USA)
3. FleishmanHilard (USA)
4. Ketchum (USA)
5. MSLGroup (France)
6. Burson Marsteller (USA)
7. Hill+Knowlton Strategies (USA)
8. Ogilvy Public Relations (USA)
9. Golin (USA)
10. Havas PR (USA)