Gould+Partners Billing Rates/Utilization Report Should Concern PR Agency Management
By Rick Gould CPA, J.D.
The nation’s PR agencies and firms did not increase their hourly rates in 2015, according to a new report released by Gould+Partners, the merger and management consulting firm specializing in the PR industry.
Based on responses from 106 PR agencies based in the U.S. and Canada, billing rates are now averaging $448 per hour for CEOs of agencies with $25 million or more in revenues and $301 per hour among agencies with under $3 million in net revenues, said Rick Gould, managing partner of Gould+Partners.
Productivity—measured by billable time utilization—has been far below optimal levels, Gould said. Senior VPs are billing out only 58.9% of their theoretical yearly capacity of 1700 hours, according to the survey.
And while some account executives are averaging as high as 95%, others are averaging as low as 70%. The average for the second year in a row was 89.0%, which is close to target. “The goal for account executives should be at least 90%, a goal reached by almost all firms achieving 20% profitability,” Gould said.
Productivity averaged less than 90% for account executives in most of the 14 PR specialties tracked. “At least 90% should be expected for account staff not involved in management and new business,” Gould added.
The survey is an annual poll focused on billing rates and agency staff utilization prepared by Gould+Partners. The management consulting firm has been conducting industry wide surveys for 25 years such as the recently released Best Practices Benchmarking Report. The industry growth report will be released in mid August.
Following the distribution of the G+P full survey results to those agencies that participated, copies will be available on request after September 1. For those of you interested in receiving a copy of the survey, please contact Rick Gould, at email@example.com, or call Gould directly (212-896-1909).
Sign up for our email newsletter, Inside Edge…Business Strategy for PR, Media & Creative Service Agencies