NEW YORK: The majority of PR agencies saw revenue declines in 2009, according to a year-end survey by StevensGouldPincus (SGP). Of the 157 agencies polled, 63.7% reported revenue declines from the prior year. They also reported an average 11.6% profit margin, a drop from last year's figure of 19.2%
“We knew business was down in 2009, and we began seeing a drop in the fourth quarter of 2008, as the recession began to affect the industry,” said Rick Gould, managing partner at SGP.
Twenty-three percent of respondents managed to thwart that trend by achieving higher revenues than in 2008; an additional 13.4% reported no change in profitability.
Gould said that while these figures are on trend with what he's seen in the industry, the decline in revenue is likely larger than reported.
“The number is actually higher than reported, as we received information from a number of agencies who didn't wish to respond because they had declines, but didn't want the public to see those figures,” he said.
The survey also showed agencies held onto clients and staff in 2009, with a 6.4% client turnover rate, and staff turnover at 12% during a period with the highest unemployment rate in decades.
Despite the results, firms overwhelmingly remain optimistic for the upcoming year. Sixty-four percent of agencies said they expect higher revenues in 2010, a prediction that Gould believes will come true.
“Every indicator we've read or seen says that things are going to get better in 2010,” he said. “2009 may have been a down year, but the 2010 figures are encouraging.”