North American PR agencies and firms did not increase their hourly rates in 2016, according to a new report released by Gould+Partners, the merger and management consulting firm specializing in the PR industry.
Based on responses from 101 PR agencies based in the U.S. and Canada, billing rates are now averaging $486 per hour for CEOs of agencies with $25 million or more in revenues and $272 per hour among agencies with under $3 million in net revenues, said Rick Gould, CPA, J.D. managing partner of Gould+Partners and director of the survey, in a news release.
Productivity—measured by billable time utilization—has been far below optimal levels, Gould said. Account executives are billing out only 84.1 percent of their theoretical yearly capacity of 1700 hours, according to the survey.
And while some account execs are averaging as high as 95 percent, others are averaging as low as 70 percent. The average for all firms of 84.1 percent was down from 89.1 percent, in 2015.
The aim for account executives should be at least 90 percent, a goal reached by almost all firms achieving 20-percent profitability,” Gould said. Industry average profitability was 15.2 percent, down from 15.3 percent in 2015.
Productivity averaged less than 90 percent for account executives among the 14 PR specialties tracked. “At least 90 percent should be expected for account staff not involved in management and new business,” Gould added. CEOs averaged 33.0 percent, down from 36.2 percent for firms less than $3 million in net revenues utilization was 41.6 percent, slightly down from 42.5 percent.
The survey, an annual poll focused on billing rates and agency staff utilization, is produced by Gould+Partners. The management consulting firm has been conducting industrywide surveys for 25 years, including the recently released Best Practices Benchmarking Report. The industry growth report will be released in mid-August.