Client budgets on the rise as agency optimism grows in Q2

New business and client spending are on the rise for PR agencies but over-servicing continues to present a problem, the PRCA's latest Consultancy Barometer has revealed.

Industry optimism: Agencies are seeing increased client budgets (Credit:Thinkstock)
Industry optimism: Agencies are seeing increased client budgets (Credit:Thinkstock)

The survey revealed 82 per cent of agencies reported their new business pipeline was either busy or very busy in Q2, a year-on-year rise of 21 per cent and a two per cent increase on Q1.

Of these, 46 per cent of respondents noted that it came from existing rather than new clients, a 10 per cent increase on last year.

With 52 per cent indicating that client spending was up, 58 per cent were feeling more optimistic for their own businesses due to the previous quarter, while 53 per cent were feeling more optimistic about the PR industry overall.

Optimism was also reflected in staffing expectations, with 65 per cent predicting that team numbers would increase next quarter, a 16 per cent increase on last year’s findings, and 32 per cent saying graduate recruitment would increase relative to the same period last year.

However, 30 per cent said that over-servicing levels had either increased marginally or significantly over the past quarter, up a sharp 13 per cent on Q1 and eight per cent more than those who said levels had decreased. 

Hopes extended to the UK economy more broadly, with 80 per cent of agency owners expecting it to improve in the next 12 months, up from 44 per cent last year.

PRCA director general Francis Ingham commented: "With the economy now above pre-crisis peak, this economic optimism can be found in every aspect of agency life.

"That last successful pitch; that new position just created in your team; even that fresh business lead from a chance meeting at an event – everything is contributing to this positive outlook.

"It is also pleasing to see the investment in young talent that is taking place. After all, it is today’s junior account executives and account executives who ensure tomorrow’s new business and growth."

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