American PR firms' profit up 20 per cent
by Tonya Garcia PR Week USA 23-Jun-08, 11:11
NEW YORK: US PR firms earned an average 19.7 per cent profit in 2007 despite an economic downturn, according to StevensGouldPincus' (SGP) annual Best Practices Benchmarking Survey.
The results were reached alongside record annual billings and high average monthly fees.
"It's a real accolade to the PR industry that they can hold the line when we're in a recession," said Rick Gould, a managing partner at SGP. "Just about all firms [with a fee volume of] over $3 million were over 20 per cent."
Annual billings per professional reached an average of $221,388, up from $198,000 last year. Just a few years ago, Gould said, $175,000 would have been considered "a solid number." The minimum average monthly fee jumped to $14,000 versus $10,000 last year. Billable time was 1,700 hours per professional, a number that has not budged in recent years.
"The industry is being more aggressive with what they bill," said Gould. "They're billing what they're worth rather than what they think the client will accept."
The SGP survey results are based on 105 agency respondents with a fee volume between $1 million and $100 million.
Only weeks ago, the Council for Public Relations Firms announced its benchmarking survey results: a 7.5% increase in revenues at US PR firms for the first quarter of 2008 and more than two-thirds of the 70 firms are optimistic, expecting higher revenues for the year. Gould agreed with those findings.
"I think it's optimistic," he said. "I'm not going to say that profits will be up, but they're holding the line."