It is great to see this figure back to double digits and above the eight per cent we saw in 2013. There is some way to go before growth returns to the pre-recession days of 15 per cent but things are heading in the right direction.
Promisingly, growth was evenly spread across the sample with approximately 55 per cent of consultancies showing double-digit growth. Only 17 consultancies reported a decrease in their income – although of course some of those with a decrease may have chosen not to enter this year.
This year, as with last year, the smaller consultancies seem to have fared OK with only one of those below £1m fee income suffering a decline, and between them averaging 16 per cent growth. As the size of agencies increased, so the average growth worsened with those between £1m and £2m returning 12.3 per cent growth and those between £2m and £3m returning 9.5 per cent growth. We continue to see this trend with those in the £3m to £5m category reporting an average of 8.9 per cent growth.
However, for those larger agencies in the £5m to £10m range, growth was a lot more buoyant at 14.3 per cent; this was helped by the fact that none in this category saw a decline. We then saw average growth dip back down again to nine per cent for those very large agencies above £10m fee income. Obviously the larger you are, the harder it is to grow by such a large percentage.
The average gross income per head has increased by 3.4 per cent to £96,945, which is much better than the less than one per cent increase last year. However, consultancies should really be aiming for an average of at least £100,000 per head. As a rule those larger agencies tended to report the higher gross income per head figures, which one would expect as they are likely to have much larger accounts, perhaps with more senior people working on them.
Generally speaking confidence within the industry is good and there are lots of opportunities out there. The challenge is translating all this increased income into increased profits and getting margins back up to where they were pre-recession. That is not going to be easy as the pace of technological change makes it increasingly difficult to keep up with demand and other disciplines continue to encroach on the PR landscape.
Esther Carder, partner, Kingston Smith W1