Best in class North American PR agencies increased their hourly rates in 2020 over averages of all firms from 2019 according to a new report released by Gould+Partners, the M&A advisory firm specializing in the PR industry.
“What I decided to do in 2018 was throw away “averages” for all firms. Averages should not be good enough. “All firms” should strive to implement the billing rates for ‘best of class’ firms,” said Rick Gould, CPA, J.D., Managing Partner of Gould+Partners.
We selected 37 firms, most of which we have been tracking for years. We reached out to the CEO’s, requesting their participation.
For this survey and future surveys, we will track only “best of class” firms. Those firms hopefully will raise the bar, raise the billing rates for all firms, and elevate the PR industry to a higher level.
Based on responses from 37 selected PR agencies based in the U.S. and Canada, billing rates are now averaging $483 per hour for CEOs of agencies with $25 million or more in net revenues and $307 per hour among agencies with under $3 million in net revenues.
Productivity—measured by billable time utilization—has been far below optimal levels, Gould said. Account Executives are billing out only 86.5 percent of their theoretical yearly capacity of 1700 hours, according to the survey.
And while some account executives are averaging as high as 95%, others are averaging as low as 65 percent.
“At least 90 percent should be expected for account staff not involved in management and new business,” Gould added.
The survey, an annual poll focused on billing rates and agency staff utilization, is produced by Gould+Partners. The M&A Advisory firm has been conducting industrywide surveys for 25+ years, including the recently released Best Practices Benchmarking Report and Industry Growth Report.
Following the distribution of the G+P full survey results to those agencies that participated, copies will be available on request after August 1.
For those of you interested in receiving a copy of the survey, please contact Rick Gould, rick@gould-partners.com.
