Survey reveals fall in PR income and profitability

Income and profitability in PR agencies have fallen, according to Marketing Services Monitor, a survey of the top 20 PR agencies published by accountants and financial advisers Willott Kingston Smith and Associates.

Income and profitability in PR agencies have fallen, according to

Marketing Services Monitor, a survey of the top 20 PR agencies published

by accountants and financial advisers Willott Kingston Smith and

Associates.



Gross income per head declined by 2.1 per cent between October 1997 and

January 1998, according to the survey, which is published three times a

year. Average gross income per head is now pounds 72,000.



The fall in income per head may in part be due to a learning curve being

experienced by new staff. Numbers of staff have increased by five per

cent since October 1997. Income includes fees and profit on

rechargeables.



Profit as a percentage of income has fallen by 1.7 per cent. The average

profit is 11.3 per cent of income, compared to 11.5 per cent in October

1997.



However profit margins compare well with other marketing services

companies.



Advertising agencies made average profits of seven per cent in the same

quarter. The figures were skewed slightly by the poor performance of

some agencies.



Below the line agencies saw profits of 10.6 per cent in the same

period.



According to Mandy Merron, a partner at Willott Kingston Smith and

Associates: ’The industry hasn’t reached its peak. This may well be a

blip.’



Leader, p9.



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