The PR industry is highly polarised, with a small number of firms
representing most of the growth in fee income, research shows this
Plimsoll Publishing, which has reported on the state of the PR sector
for the past six years, says the gap between the winners and losers this
year is now markedly greater than before.
David Pattison, a Plimsoll senior analyst, said: 'The industry is
growing at six per cent on average, but there's a band of 70 companies
growing at about 50 per cent a year and about a quarter companies losing
20 per cent a year.'
Among the 70 companies growing fastest, the report says 31 could be
putting themselves in financial risk in pursuit of new business.
'It does not mean the business is an overall success just because it is
seeing growth - maybe they are borrowing more money or taking less
margin. There is evidence that companies are putting themselves at
risk,' said Pattison.
The report looks at the most recent accounts of 1,000 companies and
predicts that more than one third will not see growth at all this
Less than half of these companies were making efforts to reduce their
asset base, the report warns.
The highest market-share earners listed in the report include Joe Public
Relations (up 120 per cent), Fleishman-Hillard UK (up 126 per cent) and
Gnash Communications (up 95 per cent).
Some of these gains are the result of mergers within holding groups.
'The sector is moving towards 120 or 150 companies capturing more of the
market,' Pattison added.
The research comes as the PRCA announced plans to treble normal
expenditure on marketing for a six-month research and marketing campaign
to support its members during difficult market conditions.
The 'Building Market Confidence' project will be funded with £100,000 from the body's cash reserves.
- Leader, p8.