NEW YORK: The StevensGouldPincus Annual Benchmarking/Best Practices Survey found PR firms' average operating profit margins at their highest level since the study's 1987 debut.
Firms came in with an average 22% operating profit in 2006, which the survey defined as "revenues, less total account labor cost, less total operating overhead."
Last year, the average was 13%.
"The past several profit margins weren't even close to this," said Rick Gould, managing partner at StevensGouldPincus. "It's never been consistently over 20%."
Gould attributed the outcome to factors associated with overall better management: greater control of labor costs, coming in at about 40% of revenues; increased productivity, with an average of about 1,700 hours spent on client work; and higher revenues per professional, averaging nearly $200,000.
"The reality check of 2001 is finally showing benefits," he said. "As horrible as  was, it made CEOs become entrepreneurs."
The study also found that average monthly minimum fees were about $10,000.
The survey tracks 20 best-practice benchmarks. Results are based on data from 100 US firms with revenues ranging from $3 million to more than $25 million.