Friday, April 21, 2006

PR is back

If anyone was wondering, it should now be pretty clear from this week's UK and US PR Week league tables that our industry is experiencing its best time since the dot com boom. Indeed if you look at the US top 40 companies the average growth was 13%, with only four companies either going backwards or standing still. The highest growth came from our own Bite Communications at 63%, but equally there were 18 of the top 40 (that's almost half for the none mathematicians) that produced growth of over 20%. Of course these league tables don't include the numbers from the real top 10 agencies such as Weber Shandwick, Fleishman Hillard et al due to their parent companies refusing to take part on SOX grounds a reason/excuse I still feel is rather feeble. Looking at the top 10 in the PR Week US table, the growth rates were less impressive. Only APCO and Schwartz beat the 20% growth rate and half the firms either standing still or growing less than 5%. This would suggest that the sweet spot for agencies right now is for agencies with around 60 people and revenues of around $10m.

The other piece of data that caught my eye in the US table was the revenue per employee. For the top 40 this averaged an impressive $188,000. There were several firms that blew past this such as Sloane & Company who averaged $309K, Levick Strategic Communications at $276K and Integrated Corporate Relations at $293K. I wonder how many of their clients are now checking their hourly rates. At the other end of the scale were firms such Schwartz that averaged a mere $126k. Interestingly again there is a big difference between the average for the top 10 and the top 40. For the top 40 as I've said it was $188K, whereas the top 10 was a less impressive $170k. To confuse matters more, out of the firms that grew 20% or more the average revenue per employee was just below the average for the top 40 at $184k, suggesting that growth has been achieved thanks to offering a slightly more competitive rate. However, if you look at the firms that grew 30% or more their average revenue per employee is slightly above the average at $191K. In other words, all this figure really tells you is which agencies charge the most to their clients and which agencies potentially pay the most or least to their staff.

I guess all of this goes to show that even if the really large agencies don't take part there is still something to be gained by having these tables.

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