Newly released research from Gould+Partners, the M&A advisory firm specializing in the PR industry, reveals that best in class North American PR agencies again increased their hourly rates in 2021 over averages of all firms from 2020. The increases were most noticeable in firms in the over $10 million to $25 million category.
Forty “best of class” firms were selected, most of which the firm has been tracking for years. Researchers reached out to the CEOs, requesting their participation. Those firms will raise the bar, raise the billing rates for all firms, and elevate the PR industry to a higher level.
“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, in a news release.
Based on responses from the 40 selected PR agencies based in the U.S. and Canada, billing rates are now averaging $492 per hour for CEOs of agencies with over $25 million in net revenues and $338 per hour among agencies with under $3 million in net revenues, consistent with the previous year. The average CEO billing rate for all firms was $422, up from $417 in 2020.
Productivity—measured by billable time utilization—has been far below optimal levels, Gould said. Account Executives are billing out only 84.3 percent of their theoretical yearly capacity of 1700 hours, down from 86.5 percent.
And while some account executives are averaging as high as 100 percent, others are averaging as low as 60 percent.
“At least 90 percent should be expected for account staff not involved in management and new business, Gould added. The shift to remote work may have impacted this percent.”
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, the full report will be on the firm’s website.
