Holmes Report Global 250
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Executive Summary

Global PR Industry Growth Surges To 11% in 2013

By Arun Sudhaman

07.07.2014

- Publicly-owned MNC firms up 6%
- Independent PR firms up 12.5%
- PR agency industry worth $12.5bn, employs more than 80,000 people

- Revenue per head rebounds to $155k
- 'Floor' for Top 250 rises to $2.8m, from $1.6m in 2012

Public relations industry growth improved significantly to 11% in 2013, cracking the double-digit barrier for the first time since the global recession took hold in 2008.

Growth was again powered by independent PR agencies, which were up 12.5% on 2013, according to the 2014 World Report, which is produced by the Holmes Report in conjunction with ICCO.

The World Report ranks the 250 largest PR firms in the world, revealing a global PR industry that grew 11% in 2013, compared to 8% in 2012 and 2011. This year, the 'floor' for the Top 250 was $2.8m, a remarkable jump on the $1.6m reported by the 250th ranked firm in 2012, reflecting the significant increase in the number of agencies around the world that are submitting numbers to the World Report survey.

Once again, publicly-held MNC firms lagged, with those owned by the major holding groups growing by 6% in 2013 to around $5.3bn. That figure still represents a considerable improvement on 2012, when the major public-owned MNC PR firms grew by just 3.3%.

Reported PR growth at the ‘big four’ holding groups — WPP, Omnicom, Interpublic and Publicis Groupe — was more modest, at around 4%. However, when accounting for all of the publicly-owned firms in the Global Rankings, including smaller and specialist agencies, reported growth was a much healthier 11%.

The market share of globally reported revenue—slightly more than $9.7 billion—held by the four giant holding companies, which was around 50 percent three years ago, holds steady at around 45 percent. Their share of the overall global PR industry revenue—now estimated by The Holmes Report at close to $12.5 billion based on the vast number of smaller firms that do not provide revenue figures— remains well under 40 percent.

Also of note is that independent PR firm fee income has almost reached parity with the big four holding groups, with the former reporting $4.5bn compared to the latter’s $4.7bn.

"Public relations agencies in general are beginning to experience the kind of growth we should expect to see in the current environment,” said Holmes Report publisher/CEO Paul Holmes. “The things that PR firms should be good at — authenticity, engagement, credibility, conversation — are all increasingly valuable in the digital age, and while it has taken some firms a few years to adapt and expand their service offerings, these numbers suggest that as a whole the industry is getting it right.

“If we had to point to a single reason for the increasing growth rate of the PR industry around the world, it would be that the firms in our survey are really coming to terms with the challenge of digital and social media,” added Holmes. “Throughout the survey, we see firms increasing their investment in digital build and production and social community management, and competing successfully for so-called ‘non-traditional’ assignments. This appears to be making a real difference to topline growth.

“Another factor is growth in Europe. While continental firms have a lot of concerns about growth and profitability—compared to their American and Asian counterparts—the best of them are growing again.

"But once again we are seeing disappointing growth for many of the industry's flagship agencies — and particularly those owned by the larger holding companies,” pointed out Holmes. “It's not entirely clear why this should be. Perhaps they are restricted from expanding their offering out of a concern that will cannibalize sister agencies; perhaps their sheer size makes them less flexible or less nimble in times of rapid change; or perhaps holding company profit targets make it more difficult to make the necessary investments. Whatever the cause it is clear that they are losing market share to midsize and independent firms.”

This year’s global rankings also finds a welcome rebound in revenue per capita for those firms reporting both fee income and headcount to an average of around $155,000, compared to $142,000 last year, and ahead of the $151,000 reported in 2011. Based on its research, the Holmes Report estimates that the global PR agency industry employs more than 80,000 people, up from 75,000 last year.

“New technologies and new frontiers - under the broad banner of digital and social media – mean demand for our services is greater than ever," added ICCO chief executive Francis Ingham. "With double-digit growth for the first time since the recession, we’ve adapted well precisely because these changes allow us to operate in a manner which shows us in the best possible light."

“Assignments have morphed, priorities have shifted, and the necessary investments needed to maintain our edge have changed even more, but our flexibility and mutability as an industry means the quality and innovation we offer remains constant, even if the exact work has changed.

“The landscape we operate in has changed– and it’s changed firmly in our favour.”

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