Top 150 - 2005: Editorial

While few people in the PR consultancy business would go as far as Prime Minister Harold Macmillan in 1957, when he said 'most of our people have never had it so good', there is without doubt a sense of optimism in the air not seen since the turn of the millennium.

The year 2004 brought more cheer than 2003 and, as our interviews with agency heads reveal in the following pages, consultancies are even more confident about 2005. Anecdotal evidence is that PR consultancy revenues are on an upward curve and PRWeek's research corroborates this, revealing that 88 per cent of agencies reported an increase in fee income during 2004, compared with 70 per cent the previous year.

The upturn also appears more evenly distributed. Within the top 25 agencies, only three suffered a drop in income and the top three agencies all enjoyed growth, unlike last year when the trio at the top of the table all saw a fall in fees.

For the third year running, the Sarbanes-Oxley Act has prevented many leading agencies from entering our report. But again we have obtained figures on some of the leading names from Companies House, with the help of marketing services accountancy firm Willott Kingston Smith. This has enabled us to produce a supplementary table (see p18).

It is good to see great agency brands such as Freud and Grayling back in the main survey this year, as well as exciting young integrated agencies such as Cake and Exposure. There is also evidence that the healthcare and corporate comms sectors look particularly buoyant.

There is (private) talk of over-supply in some disciplines that is leading to commoditisation and a downward pressure on fees. In others there is a dearth of talented senior practitioners, leading to spiralling salaries and similar pressure on margins. As ever, there is tension between the maturing networks and a new wave of specialist 'hot shops'.

With such a lively market, and rumours of M&A activity last seen before the 2000 peak, expect the table to look significantly different next year.

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