Davis+Gilbert’s 12th Annual Public Relations Industry Trends Report analyzes revenue and profitability trends, client service offerings, artificial intelligence usage, staffing strategies, DEI, and mergers and acquisitions (M&A) activity. The report, highly anticipated and frequently used by firms in their strategic planning for the year ahead, is based on an analysis of data and responses from almost 200 firms of all sizes, specialties and regions in the world. This year’s report provides fascinating trends and benchmarks.
Revenue Growth Outpaces Profit Gains as PR Firms Face Cost Pressures
Davis+Gilbert’s survey reveals that 57% of PR firms expect revenue growth in 2024 — up from 53% last year. Profitability is not keeping pace, however, with only 50% anticipating profit increases, a modest improvement from 47% in the previous year.
“Firms face difficulty in their effort to increase profits due to clients tightening their PR budgets and firms absorbing costs associated with technological advancements,” Davis+Gilbert Public Relations Practice Group Chair Michael Lasky said. “Although 50% of firms predict profit growth for 2024, this is still a far cry from the 69% of firms that saw increased profits in 2022. This underscores the ongoing challenges firms face in maintaining profitability amid shifting market demands.”
PR Firms Embrace AI in 2024
This year also witnessed a meteoric rise in AI usage by PR firms. Firms shared how they are combining artificial intelligence with human intelligence to drive strategic insights, enhance analytics, and automate tasks, in efforts to increase efficiency in everything from content creation to client management. The report analyzes how firms are using AI for a variety of functions, as well as which platforms they are finding most effective.
Highlights include:
- 69% of firms now use AI for written content creation, an increase of 24% from last year.
- Large firms are using AI for data analytics and visual content creation much more than small and mid-sized firms. While smaller and mid-sized firms are using AI most often for ideation and written content creation.
“What’s clear is that PR firms are realizing the immense potential of AI, not just in its usage but in transforming the types of tasks they are automating, from ideation to visual content creation to analyzing and summarizing data,” said Lasky. “This data emphasizes the need for all PR firms, especially smaller and mid-sized firms aiming to punch above their weight, to adopt the most suitable AI platforms and invest in continuous training.”
Expanding PR Service Offerings
PR firms are increasingly adopting an omnichannel approach to their service offerings, reflecting the growing demand for integrated marketing solutions. This demonstrates that public relations firms are continuing to expand their portfolios to include a wide range of services – digital and social media, content development, branding, influencer partnerships, and data analytics. This continued evolution reflects that the future of PR lies in the ability to provide holistic marketing solutions that meet clients’ needs.
Staffing and DEI
This year saw a slowdown in DEI efforts within much of the PR industry. Only 31% of firms reported increasing the number of employees from historically underrepresented groups. This is in sharp contrast to the 42% increase in 2023 and 60% increase in 2022. However, 59% of this year’s top performing firms – those expecting increased revenue and/or profitability by more than 10% over last year – continued to increase their percentage of employees from historically underrepresented groups. This is nearly double the industry norm. This data demonstrates that successful firms continue to make DEI a priority.
PR M&A Activity on Track for Another Strong Year
M&A activity in the PR/Earned Media industry continued its positive upward trend in 2024, building on last year’s momentum. Through Oct.15, 2024, there were 79 completed deals — six more than the same period in 2023. 2024 is on track to meet or exceed the 91 total deals completed by the end of last year. Of these deals, approximately 60% involved sellers with revenue of $6M or less – essentially the same as the last two years. One significant change is the number of larger deals, with 13% of sellers reporting revenues over $25 million, up 7%from 2023. Looking at the buyer side of the equation, independent firms were the buyers in 43% of the deals (up 5% from last year), with private equity and private equity-backed firms consummating 35% of the deals (down 16% from last year) and publicly traded buyers completing 22% of the deals (up 11% from last year).
“The surge in M&A reflects broad interest from both strategic and financial buyers aiming to deploy capital for growth,” said Brad Schwartzberg, Co-Chair of Davis+Gilbert’s Corporate + Transactions Practice Group. “Smaller and mid-sized firms remain active in the M&A market, capitalizing on opportunities to expand reach and capabilities and to complement their organic growth with strategic M&A,” said Schwartzberg.
2025 Outlook
Looking ahead, 70% of responding firms state that they are cautiously optimistic about next year, a notable 17% increase from last year.
Tempering their enthusiasm, firms shared their biggest concerns for 2025:
- Client budgets remaining flat or decreasing;
- Slow decision-making by prospective clients; and
- Difficulty in maintaining or increasing profit margins.
Access the Full Report
For detailed insights on these findings and more, access Davis+Gilbert’s 12th Annual Public Relations Industry Trends Report.