O’Dwyer’s: “Profitability was up last year for North American PR agencies, according to an annual industry survey conducted by PR merger and acquisition advisory firm Gould+Partners. Gould+Partners’ latest Benchmarking report, which analyzes key factors affecting PR firm profitability, found that North American PR agencies witnessed operating profits averaging 19.7 percent of net revenues (calculated as fee billings plus markups) in 2021, up from 18.2 percent in 2020 and a 2.3 percent increase from pre-COVID 2019’s 17.4 percent.

“ ‘19.7 percent average operating profit is an incredible comeback for the PR industry,’ Gould+Partners’ Managing Partner Rick Gould told O’Dwyer’s.”

“The survey’s findings discovered that profitability was especially high at the largest firms: PR agencies with revenues in excess of $25 million netted average operating profits of 21.3 percent in 2021—up from 20.2 percent in 2020—indicating both increased organic growth as well as growth via acquisition. Firms with between $10 million and $25 million in revenues netted 20.1 percent profitability last year, up from 17 percent in 2020. Firms accounting for between $3 million and $10 million in revenues netted profitability of 19.5 percent profitability, up from 18.1 percent, while the smallest firms—those with under $3 million in revenues—netted the smallest profitability, 15.8 percent, flat from 2020.”