Arun Sudhaman 26 Apr 2018 // 7:57AM GMT
The global PR industry grew by 5% in 2017, based on the Holmes Report'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.
The research reveals that the Top 250 PR firms reported fee income of around $11.7bn in 2017, compared to $11bn for last year's Top 250 ranking. That growth was powered by midsize agencies, given that the the world's Top 10 PR firms only grew 0.9% to $5bn, led by strong performances from BlueFocus (up 12.3% in constant currency terms) and Cohn & Wolfe, which cracks the top 10 amid its merger with Burson-Marsteller.
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, the Holmes Report estimates the size of the global PR agency industry at $15bn, the same size as 2017.
Meanwhile, the 'floor' for the Top 250 rises slightly, from $4.5m last year to $4.8m this year reflecting both growth and the popularity of the ranking with firms from across the globe.
Global Top 250 Growth
Currency volatility, in a particular the effect of the weaker US dollar helped many firms report stronger USD growth — at 5.1%, compared to 4% in 2016. Constant currency growth, however, decreased to 5.1% compared to 7.4% in 2016, based on a like-for-like comparison of those firms reporting fee income for 2017 and 2016.
The Global 250 also reveals the following:
• For US PR firms ($7.5bn), growth was 2.6%, down from 4.6% one year ago.
• For all PR firms reporting in USD ($9.5bn), growth was 3.4%, down from 5.3% in 2016.
• UK PR firms reporting in GBP (accounting for around $768m, or £569m) grew by 14.3% in reported (USD) terms thanks to the weaker dollar. They grew 4.2% in constant currency terms, compared to +9.3% one year ago
• PR firms reporting in Euros ($961m), grew 21.2% in reported (USD) terms, or +6.2% in constant currency terms.
Midsize vs Top 10
The world's Top 10 PR firms reported fee income of $5bn, up just 0.9% compared to 2016, effectively making it the worst year for major PR networks since the global financial crisis of 2009. Of the Top 10, only Cohn & Wolfe and BlueFocus registered double-digit growth, with several others declining.
However, midsize PR firms — defined for these purposes as those within $50m to $250m — performed handsomely in picking up the slack, illustrating how this tier of agencies have come to lead the market in terms of both growth and innovation. Midsize firms were up 6.1% in reported (USD) terms, or 3.1% on a constant currency basis.
Within this group, several agencies recorded eye-catching growth of more than 15%, including W2O Group (+18%), Japan's Vector (+38%), Hering Schuppener (+19%), Allison+Partners (+15%), Marina Maher Communications (+20%), GCI Health (+24%), H&H (+25%), SKD Knickerbocker (+19%), Prosek Partners (+32%) and M Booth (+18%).
"While this year’s numbers are again impacted by currency fluctuations, many of the patterns we have seen in recent years appear to be holding true," said Holmes Report founder Paul Holmes. "There is healthy — but not spectacular — growth for the industry as a whole, and independent and midsize firms continue to outperform the giant global networks.
"In an environment of fast-paced change, it seems that while scale is helpful — at least on a national market level — the ability to adapt is also important," added Holmes. "That is a benefit to firms in the middle market: large enough to provide integrated services, small enough to be nimble and flexible and entrepreneurial.
“The one significant difference between this year and previous years is that Europe outperformed North America," pointed out Holmes. "In the past we have observed that continental Europe in particular has been slower to adapt to new ways of doing business, to expand digital and social, content creation and data and analytics to compete with other marketing service providers. Perhaps we are seeing firms there sprinting to catch up, or perhaps the volatility in the US market — a reflection of the political climate there — was holding back American firms last year."
Public vs Independent
While independent PR firms have comfortably outgrown their publicly-held peers for several years now, that divide grew more pronounced in 2017, with independent PR firms increasing fee income by 8.8% on a constant currency basis to around $5.3bn, or +10.5% in reported USD terms.
All publicly-owned firms, meanwhile, reported fee income of $6.5bn, growing 3.7% on a constant currency basis, or +3.7% in reported USD terms, and accounting for 40% of the overall market.
The divide between independent and public PR agencies is even more clearly seen when analysing the performance of the Big 4 holding groups, whose PR operations were effectively flat at $4.6bn.
The Big 4 (Omnicom, IPG, WPP, Publicis) account for around 30% of the overall global PR market, at $4.6bn. Independent PR firms reported fee income of $5.3bn, again outstripping the PR operations of the Big 4 holding groups, a divide that grows larger every year.
Revenue per capita
Revenue per capita rebounds to $159,000 in this year's Rankings up from $151,000 last year and 2016 to the same level as recorded in 2015.
Holding Groups / Networks
WPP benefited from a weaker US dollar to reclaim top spot in 2017 among holding group PR operations in USD terms. On a constant currency basis its growth (+6.4%) took it to almost $1.6bn.
While Interpublic's CMG unit reported $1.5bn, this includes several firms that do not specialise in PR; accordingly Omnicom's PR operations at $1.38bn are likely to be the second-largest in the world.
Further analysis of the world's fastest-growing PR firms, along with specific regional rankings, will follow over the coming weeks.
Rankings: Top 250 | Top 10