PR has weathered the storm well

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f ‘ flat’ really is ‘ the new growth’ then 2009’s income figures are good news for the PR industry, because flat is the overall message this year.

With the estimates that we use for Sarbanes-Oxley-affected agencies, the total amount billed by the Top 150 UK consultancies dipped slightly from £858m in 2009, to £814m in 2009. However when we asked management consultants Kingston Smith W1 to calculate average growth of those that enter the table, the picture was one of slight growth (0.75 per cent).

But looking at the group table opposite, which shows the market capitalisation of marcoms groups with PR interests, it is hard not to feel optimistic.

With the exception of Band & Brown owner Cossette, which is no longer listed, all marcoms groups have increased their market capitalisation. Chime Communications, which is heavily reliant on PR revenues, has seen exceptional uplift in its share price.

All the signs point to 2010 being a blessed relief. Many agencies report winning more clients in the first quarter of 2010 than in the whole of 2009. Next year’s tables will make interesting reading, but there is every reason to believe the PR industry will once again show the strong growth it posted pre-2009.

As in previous years, some agencies declined to enter figures for this year’s league tables, citing the 2002 Sarbanes-Oxley Act.

We have estimated fee income for these agencies using a formula agreed with the PRCA and Kingston Smith W1.

For top City agencies, we estimated perhead productivity at £280,000 and for City and corporate combinations, we used a figure of £190,000. For generalist agencies we estimated £97,000 per head. We multiplied these by the estimated number of staff at each agency to calculate a fee income for 2009. Brunswick declines to enter the tables, so we estimated its figures in the same way.

In previous years, we asked agencies to supply their total staff numbers. This year we asked for the number of fee-earning PR staff only in order to more accurately reflect per-head productivity.

Huntsworth holds the largest and most mgeographically diverse UK portfolio of PR consultancies. What happens to Huntsworth, therefore, broadly reflects what is happening in UK public relations. Increasingly, we are the bellwether of the state of the industry.

From mid-2008, we saw some 15 per cent decline in financial and corporate PR. During this recession, stock markets slumped, IPOs were cancelled, mergers were aborted and clients became much more nervous about their future. Some of our financial PR companies have successfully broadened their services, building a strong retainer base that provided a buffer against the worst ravages of recession.

A period of significant political change in the UK and continental Europe heralded a growth in public affairs. However, during the latter half of 2009 the abuses of public affairs activity cast a dark shadow over this sector, which is perceived as needing radical reform.

In a recession, clients often cut advertising budgets and – to compensate – consumer PR booms. We saw double-digit, organic growth in many of our consumer brands and sectors. The crossover between consumer PR and medical education drove healthcare PR forward and leads us to expect strong growth in these sectors over the next five years. And every major PR business has benefited from increased government spending on information and education programmes.

But PR growth is now underpinned by digital comms, which is an integral part of all we do. Where we can isolate reliable growth numbers, as in Tonic Life, digital grew by more than 100 per cent last year. So, what are the prospects for 2010? We expect a vigorous bounce-back in financial and corporate PR; continuing growth in consumer activities; a steadying of the ship in public affairs, but working under intense public scrutiny; ever faster growth in healthcare, but some decline in PR for government and public bodies. The real growth driver, however, will be the creative use of digital media. Clients should increasingly turn to us as a natural source of digital counsel – as the guardians of content in all forms of media. And if we can meet that challenge, professionally and profitably, then PR is on the verge of a new golden age.