Average PR salaries up ten per cent

Average PR salaries increased by almost ten per cent in the last financial year despite the downturn, according to an annual survey of the top 30 agencies.

The average salary in the agencies concerned - those with the biggest gross incomes - rose from £41,000 to £45,000, showing a failure to react quickly to the current difficulties, according to the survey.

Ester Bannister, a partner at the accountancy firm Willott Kingston Smith, which conducted the survey, said: 'This probably reflects the fact that there is still competition over the best people, but we would expect that to start going down next year.'

While salaries have held, agencies are coping with a massive increase in exceptional costs, due partly at least to making redundancy payments.

The survey, which is based on a review of agencies' most recent accounts, found that combined exceptional costs jumped from £600,000 last time to £5.7m this time.

This increase in exceptional costs helped reduce profits per head, but PR agencies still perform better in this regard than the ad agencies which were also surveyed. PR agencies generated operating profits of £8,790 per head compared to £7,730 for full-service ad agencies.

But more than half the agencies involved showed a decrease in pre-tax profits. The survey found that many of the PR agencies that suffered most severely were part of the UK or foreign-owned quoted groups including PR subsidiaries of Chime Communications, Grey Worldwide and Omnicom. Bannister said this indicated that small and independent agencies with lower fixed overheads were able to react more quickly to the current difficult market.

On the positive side the survey, which is called Financial Performance of Marketing Services Companies, concludes that the creative services sector overall had not overstretched itself and had largely achieved effective short-term cost control.

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