Exclusive report produced by StevensGouldPincus on behalf of PR News shows disappointing financial results for the PR field this year, with revenue per professional staff down in every category.
▶ A Brutal Winter for PR, in More Ways than One: It’s not pretty earnings-wise for PR agencies right now. Operating profit this year fell to an average of 16.1%, from 18.8% last year, according to an exclusive report produced by StevensGouldPincus on behalf of PR News. The report is based on the first 50 responses from SGP’s annual best practices benchmarking survey. Among the first 50 respondents, revenue ranged from under $3 million to $10 million-plus. Rick Gould, managing partner, who put the study together, said the decrease in earnings is due to agencies mismanaging their fees as they relate to spikes in staff salaries. PR agencies “have to give good people raises,” Gould said, “but won’t concurrently raise fees for clients” due to a fear of pushback. One remedy: be more transparent with both existing clients and prospects. “You need to show clients how you’re paying your staff and why you need to raise their billing rates and increase their fees, which should go right to the bottom line,” Gould said.
This article originally appeared in the March 31, 2014 issue of PR News. Read more subscriber-only content by becoming a PR News subscriber today.