(MENAFN- PRovoke) The global PR industry grew by 0.7% in 2023, based on PRovoke Media's definitive annual ranking of the world's top 250 PR firms,
which is now live .
The
Global Top 250 which provides the clearest picture available of global PR industry size and growth, is based on submissions from more than 400 PR firms across the world, along with revenue estimates for key firms that chose not to submit.
The research reveals that the
Top 250 PR firms
reported fee income of around $17.3bn in 2023, up 0.7% in USD terms.
The downbeat performance comes after the
PR industry bounced back from the worst of the Covid era, growing 9% in 2022 and
11% in 2021 . A downturn in the technology and healthcare sectors undoubtedly impacted many agencies, along with continued client caution spurred by geopolitical volatility and economic uncertainty.
As usual, the industry's 2023 performance was heavily influenced by the
Top 10
group, which declined by 4% compared to the Top 10 in 2022. The results reflect the difficulties faced by holding groups in 2023, when many publicly-held agencies struggled to secure growth while ensuring profitability.
While many firms recorded respectable growth in 2023, a significant proportion appear to have expanded via mergers and acquisitions - suggesting what growth there was came from rearranging market share rather than any topline increase in communications spending.
Meanwhile, a disappointingly high number of firms chose not to report their numbers this year - indicating an unwillingness to invite public scrutiny amid more difficult trading conditions.
Accounting for the numerous firms that reported outside of the Top 250, along with the vast number of smaller firms that do not provide revenue figures - and a recalculation of publicly-held fee income estimates - PRovoke Media estimates the
size of the global PR agency industry at $19.5bn, down from $20bn in 2022.
Despite the mediocre results,
the 'floor' for the
Top 250
rises to record levels
of $6.8m.
“There is an obvious disconnect between the minimal growth we reported and the fact that our estimate of the industry's global revenues declined," said PRovoke Media founder Paul Holmes. "That's because we decided to adjust our estimate of some of the publicly-held agencies, because holding company reporting made it clear that some of our previous years' estimates were inflated.”
For a full explanation of that process, see here.
"But even accounting for that change, 2023 was clearly a
challenging year for the industry as a whole. The threat of an economic downturn, which never really materialized, nevertheless dampened enthusiasm for marketing spend. And the backlash in the US against ESG and DEI led some companies to fall silent on those issues too.”
Global Top 250 growth
The Global 250 grew 0.7% to $17.3bn in USD terms last year, compared to 12.1% growth in 2022. In constant currency terms, fee income was up 2%, compared to 7.1%
in 2022, based on a like-for-like comparison of those firms reporting fee income for 2023 and 2022.
The
Global 250
also reveals the following geographic results:
.
US PR firms, typically the engine of global growth, reported a 1.3% increase in fee income, compared to 11.4% in 2022. Once again, this group accounts for more than half of the global PR industry, at upwards of $11bn.
.
For all PR firms reporting in USD ($14bn), growth was 2%, compared to +13.6% in 2022.
.
UK PR firms reporting in GBP (accounting for around $1.2bn, or £960bn) were down 3.9% in constant currency terms, but up 0.9% in reported terms (USD), thanks to the impact of a stronger pound against the US dollar.
.
PR firms reporting in Euros ($1.3bn) were up 1.3% (constant currency), or +4.2% (USD), compared to 12% constant currency growth in 2022.
.
German PR firms ($875m) led the market with 6.4% constant currency growth or +7.5% (USD), down from +9% (constant currency) in 2022.
.
Asia-Pacific, Middle East and Africa PR firms ($1.7bn) were up 5% (constant currency) or +1.7% (USD), compared to 4% (constant currency) growth in 2022.
“I don't think it will surprise anyone that the UK had the most challenging year,” said Holmes.“It's one market that actually did fall into recession, and economic difficulties, as ever, were exacerbated by Brexit.
“Meanwhile, the healthiest growth came from Asia, the Middle East and Africa, regions where one would expect to see the business growth as they become better integrated into the global economy and adapt more global standards of governance generally.”
The midsize engine
The world's Top 10 firms reported fee income of $6.3bn, down 4% on 2022 ($6.5bn), although this was partially impacted by our re-estimation of holding group agency revenue.
Number one firm Edelman set the tone by declining 3.9%, while the likes of FleishmanHillard, BCW and Ketchum all endured more difficult years. Growth was led by Real Chemistry (+7%), alongside Vector (+6.4%) and Media Consulta (+20%).
It remains worth noting that four of the top 10 firms are independently owned, reflecting how independent PR firms, often fuelled by private equity funding, have outgrown their publicly-held peers over the past decade.
Midsize PR firms - defined for these purposes as those within $50m to $250m - also continued to outperform, expanding by 5.2% (constant currency) in 2023 to $5.3bn, after growth of 17.8% in 2022.
“Even without our re-estimation of holding company fee income, the largest firms struggled in 2023,” said Holmes.“As much as some industry leaders may want to believe that scale provides a competitive advantage, we see zero evidence for that idea in our research. Once again, the mid-market is where we see real dynamism.
“Perhaps the emergence of AI as a factor in the PR business will challenge that view, because of the size of investment required and the benefits of large data sets, but at this point it is clear that midsize firms have a competitive advantage over their larger peers.”
Smaller firms ($15m to $50m) were up just 1.4% in constant currency terms.
Independents vs public
After cracking the $10bn barrier in 2022, independent PR firms continued to submit respectable returns in 2023, up 5.6% in constant currency terms to $10.4bn. The gap between independent and publicly-held firms grows ever wider, with independents now accounting for more than 55% of the total market.
Publicly-owned PR firms reported fee income of $7bn, an increase of just 0.1% in constant currency terms, or +1.3% (USD). Notably, PR operations owned by the Big 4 holding groups grew by 1.2% to $5bn, accounting for just over a quarter of the overall global PR market.
“Even with a disappointing year from the largest of the independent agencies, they continue to outperform the publicly-traded firms,” said Holmes.“In part, perhaps because the influx of private equity money has given some of them the resources to play in the acquisitions game, although even those without PE backing are nimble enough to respond to a fast-changing market.”
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