Arun Sudhaman 16 May 2022 // 9:00AM GMT
The global PR industry grew by 10.6% in 2021, 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 as they emerged from the worst of the Covid-19 pandemic.
The research reveals that the Top 250 PR firms reported fee income of around $15.3bn in 2021, up 16% in USD terms. Our constant currency analysis reveals a Top 250 increase of just under 11%, with the PR industry also recording healthy growth of 7% versus the pre-pandemic year of 2019.
Not only does this mean that the PR industry defied the worst of the grim industry forecast 18 months ago, but that it recovered in some style after declining 4% in 2020. It also marks the industry's first double-digit expansion since it rebounded from the Global Financial Crisis more than a decade ago.
Once again, the industry's 2021 performance was underpinned by strong returns from the Top 10 group, demonstrating that diversification not only mitigated the worst of the pandemic, but helped firms prosper, too.
And while Top 10 growth was outstripped by midsize and smaller firms, it seems safe to conclude that last year saw the PR industry as a whole embrace its potential in terms of strategic counsel, creative innovation and sector-specific expertise. Indeed, the results suggest a 'pandemic dividend', reflecting the manner in which the Covid-19 crisis has reinforced and elevated the critical value of empathetic public relations across multiple stakeholder groups — a state of affairs that has played to the industry's strengths.
PRovoke Media's ongoing research has already revealed soaring industry optimism, including remarkable positivity about the pandemic's impact on the PR business. There is consistent evidence of reinvigorated demand for such services as corporate communications, crisis counsel and employee engagement, along with sectoral growth in healthcare, B2B and technology. In addition, it appears that a broad-based consumer marketing recovery has accelerated the industry's resurgence over the past 12 months.
Accordingly, the vast majority of PR firms recorded healthy growth in 2021, even if specific geographic regions remained favoured. 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, PRovoke Media estimates the size of the global PR agency industry at $18bn, up from $15.8bn in 2020.
Meanwhile, the 'floor' for the Top 250 rises to record levels of $6.4m.
“Last year, we commented on the resilience of the public relations industry, even as it declined during the first year of the pandemic," said PRovoke Media founder Paul Holmes. "This year, the industry recorded robust double-digit growth, more than recouping any losses. This is not just business as usual; this is public relations demonstrating its value across the board as an increasingly mission-critical discipline."
Global Top 250 growth
The Global 250 grew 15.7% to $15.3bn in USD terms last year, compared to a 0.3% decline in 2020. In constant currency terms, fee income jumped by 10.6% compared to a 3.9% decline in 2020, based on a like-for-like comparison of those firms reporting fee income for 2021 and 2020. That also means the Global 250 grew by 6.8% compared to the pre-pandemic year of 2019.
The Global 250 also reveals the following geographic results:
• US PR firms account for more than half of the market ($10.3bn), up 16%, compared to 1% decline one year ago.
• For all PR firms reporting in USD ($12.5bn), growth was 16%, compared to a 1.5% decline in 2020.
• UK PR firms reporting in GBP (accounting for around $1.3bn, or £935m) led the market in terms of growth, +22% (constant currency) and +20% (USD), compared to a 4% constant currency decline one year ago.
• PR firms reporting in Euros ($916m) were +17% (constant currency) or +9% (USD), after dropping 6.6% on a constant currency basis in 2020.
• German PR firms ($398m) were up 6% (constant currency) or -0.6% (USD), following a 3.5% constant currency decline last year.
• Asia-Pacific PR firms ($1.4bn) were up 11% (constant currency) or +19% (USD).
“One big success story was the UK, where growth was better than 20% in both constant currency and US dollar terms," explains Holmes. "It’s a market where big, bold creative ideas are celebrated — and needed to cut through a competitive mediascape — but also where solid, strategic corporate reputation is increasingly valued.
"The relative weakness of the euro impacted numbers from continental Europe, masking what was a pretty good year — although the German market seems to be a few months behind the rest of the market in terms of a post-pandemic rebound.”
A rising tide
The world's Top 10 firms reported fee income of $6bn, up 13% on 2020 ($5.3bn). Growth was led by number one firm Edelman, which recorded 17% expansion to close in on becoming the first $1bn PR agency. Edelman was one of six agencies to report double-digit growth in 2021, alongside excellent performances from Brunswick (+36%), Real Chemistry (+32%) and Finsbury (+18%). Further analysis of the Top 10 here.
After a difficult 2020 in which they declined by 8%, midsize PR firms — defined for these purposes as those within $50m to $250m — reclaimed their position as the industry's growth engine, expanding by 15.4% (constant currency) in 2021 to $3.9bn, and up 19.4% compared to their 2019 numbers.
Smaller firms ($15m to $50m) also performed well — up 16% in constant currency terms.
Public vs independent: A watershed moment
One of the dominant industry themes of the past decade is the ability of independent PR firms to outgrow and, in many cases, 'out-innovate' their publicly-held peers. And while that gap narrowed two years ago, independents restated this argument to handsome effect in 2021, delivering a significant watershed moment in the process.
In 2021, independent PR firms were up 20% in constant currency terms to $8.2bn, marking the first time in the Rankings' decade-plus history that independent PR firms now account for more fee income than publicly-owned players. Independent PR firms now comprise 61% of the global PR agency market, in terms of fee income.
Publicly-owned PR firms reported fee income of $7.1bn, an increase of 5%. Notably, PR operations owned by the Big 4 holding groups grew by 9% to $5.2bn, accounting for less than 30% of the overall global PR market.
“Once again we see a stark divide between the big publicly-owned holding companies and the independents," said Holmes. "The big four holding companies had a pretty strong year up 9%, but that was only half the growth experienced by the independents. For the first time, independent PR firms account for more than half the revenue in our survey, while the big four share of revenue declined to 29%.
“Many big agencies continue to believe that the PR market is consolidating. Many independent PR firm owners continue to tell us that one of the reasons for selling is to drive growth. It should be obvious by now that neither of these things are true: the market is more fragmented than ever, and growth is faster for independents. The obvious explanation is that clients are increasingly unwilling to sacrifice quality for convenience—in most circumstances, they want the best specialist agency available in the relevant market, sector, or practice area, and not a jack-of-all-trades.”