Arun Sudhaman 15 May 2023 // 9:15AM GMT
The global PR industry grew by 9.1% in 2022, 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 $17.1bn in 2022, up 12.1% in USD terms. Our constant currency analysis reveals a Top 250 increase of 9.1%.
The impressive performance comes after the PR industry bounced back from the worst of the Covid era, growing 11% in 2021 after declining 4% in 2020.
Once again, the industry's 2022 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 the past two years have seen the PR industry fulfil its potential in terms of strategic counsel, creative innovation and sector-specific expertise. The results indicate that the significant elevation of corporate communications in the C-suite has outlasted the pandemic — suggesting a permanent dividend that has made PR firms less dispensable than ever as trusted advisors.
In particular, events of the past three years — spanning such areas as geopolitics, diversity and inclusion, ESG, employee engagement, health and wellness and digital transformation — have reinforced and elevated the critical value of empathetic public relations across multiple stakeholder groups, a state of affairs that appears to have played to the industry's strengths.
Accordingly, the vast majority of PR firms recorded healthy growth in 2022, even if specific types of firms and 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 $20bn, up from $18bn in 2021, and $15.8bn in 2020.
Meanwhile, the 'floor' for the Top 250 rises to record levels of $6.5m.
“Last year was a strange one for the industry," said PRovoke Media founder Paul Holmes. "Many firms seemed to spend the year waiting for the inflation we saw globally to tip the market into recession, and yet it never happened, and by the end of 2022 PR firms were enjoying a two-year growth spurt that recovered any revenue lost during the pandemic and added considerable new money.
"The fact that public relations is now at least a $20 billion business globally — and our estimate errs on the conservative side — means that PR is now a significant sector of the global economy. And it is growing faster than either the advertising sector or the marketing sector, a reflection perhaps of the broader range of issues and challenges that PR agencies are being called on to address in the stakeholder economy.
“The past three years have seen increased emphasis on ESG and DEI, both areas that require clear, credible communications and therefore both areas that play to the strengths of the PR sector. On the marketing front, companies are centering purpose, and again PR firms are playing a leading role, as earned-first becomes the mantra in an arena that requires trust. The need to build credibility and reputation capital has been a boost to the PR business and will continue to drive growth even if the market does slow this year."
Global Top 250 growth
The Global 250 grew 12.1% to $17.1bn in USD terms last year, compared to 15.7% growth in 2021. In constant currency terms, fee income was up 9.1%, compared to 10.6% in 2021, based on a like-for-like comparison of those firms reporting fee income for 2022 and 2021.
The Global 250 also reveals the following geographic results:
• US PR firms account for more than half of the market ($11.4bn), up 11.4%, compared to 16% growth in 2021.
• For all PR firms reporting in USD ($14bn), growth was 13.6%, compared to +16% in 2021.
• UK PR firms reporting in GBP (accounting for around $1.3bn, or £1bn) were +12% (constant currency) but only +0.4% in reported terms (USD), thanks to the impact of a stronger US dollar and weaker pound sterling.
• PR firms reporting in Euros ($1.2bn) led the market with 28% constant currency growth, or +20% (USD), compared to 17% constant currency growth in 2021.
• German PR firms ($465m) were up 9% (constant currency) or +2.6% (USD), following a 6% constant currency increase a year earlier.
• Asia-Pacific, Middle East and Africa PR firms ($1.8bn) were up 4% (constant currency) or +14% (USD), compared to 11% (constant currency) growth in 2021.
“Currency fluctuations played an outsized role in the rankings this year, but it is clear that firms reporting in Euros outperformed the market," said Holmes. "This group included some newly acquisitive European businesses, but even so it’s an indication that continental Europe is no longer being outpaced by the English-speaking markets.
“If any market has been slow to recover from the impact of the pandemic, it’s Asia, which has its own economic and geopolitical challenges to overcome."
The midsize engine
The world's Top 10 firms reported fee income of $6.5bn, up 12% on 2021 ($6bn). Growth was led by number one firm Edelman, which became the world's first $1 billion PR firm in 2022, when it grew by 9.6%. A further five firms matched Edelman's growth pace, led by Japan's Vector (+69%), Real Chemistry (+17%), FleishmanHillard (+10%), Ketchum (+9%), and MSL (+10%).
It is also worth noting that four of the top 10 firms are now independently owned, the highest ever proportion, and yet another reflection of how independent PR firms have outgrown their publicly-held peers over the past decade.
Midsize PR firms — defined for these purposes as those within $50m to $250m — consolidated their position as the industry's growth engine, expanding by 17.8% (constant currency) in 2022 to $4.8bn, after growth of 15.4% in 2021.
“Once again, midsize firms are the engine driving industry growth," said Holmes. "We have seen consistently over the past few years that firms specializing in a single market — whether that’s an industry sector like health or tech or a single geographic market — really do offer a flexibility that helps them respond nimbly to changes in what the market demands."
Smaller firms ($15m to $50m) were up just 4.5% in constant currency terms.
Independents vs public
After outstripping their publicly-held peers for the first time in 2021, it was another watershed moment for independent PR firms in 2022, as they cracked the $10bn barrier for the first time after registering 16.6% constant currency growth.
At just over $10bn, the gap between independent and publicly-held firms continues to grow, with independents now accounting for more than 60% of the total market.
Publicly-owned PR firms reported fee income of $7.5bn, an increase of 4%. Notably, PR operations owned by the Big 4 holding groups grew by 8.4% to $5.5bn, accounting for less than 28% of the overall global PR market.
“There are three issues that impact the ability of the big, publicly-traded firms to keep pace with the market as a whole," explained Holmes. "The first is that it’s much more difficult for a $400 million firm to grow by 15% than it is for a $40 million firm. The second is that it’s also more difficult for a global behemoth to respond nimbly and quickly in a fast-changing market. And the third is that independent firms are now more active in the M&A space than their publicly-traded counterparts, as firms looking to be acquired prefer the perceived freedom of a midsize holding company or a private equity investor to the one-size-fits-all approach of the traditional behemoths."