PRIA survey finds average monthly retainer has grown, but agencies more reliant on top clients

PRIA survey 1

Source: PRIA

Australia’s PR agencies increasing reliance on a few larger clients for the bulk of their revenue should be seen as a “warning sign” for the industry to diversify risk, with a new report showing monthly agency retainers are also on the rise.

While the annual Public Relations Institute of Australia (PRIA) consulting sector benchmark survey has reported a 14.6 per cent increase in the monthly agency retainer, with the average rising for the second year running, up from $10,873 last year to $12,461 in 2014, it showed 34 per cent of agencies rely on their top five clients for more than three-quarters of their revenue.

“(The dependency figures) are always a warning sign and businesses need to make sure they don’t concentrate revenue too much. Our business are no different to anyone else’s — diversify risk, and keeping an eye on not being caught out by having one or two very large clients,” said Adam Benson national chair of the PRIA Registered Consultancies Group (RCG).

“It would seem that companies are investing more in public relations and putting additional projects and additional fees into PR than they have before. Budgets are coming back”, added Benson, who also warned that the two year sustained growth spurt could see a “war for talent” among Australia’s PR agencies.

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Source: PRIA

This is the second year in a row where agencies in the survey reported a significant increase in the average retainer which has largely been stable since 2008 and the aftermath of the global financial crisis.

The survey, which is based on submissions of detailed financial and business operations of RCG members across all sizes of agency, found PR consultancy activities grew an average of two per cent in 2014, with one third reporting average annual revenue growth of 19 per cent.

It showed 42 per cent of agencies are also planning a significant expansion of their digital offering, while 40 per cent already have dedicated digital services staff in place with Benson warning that the growth could led to a “war for talent” as PR agencies struggle to find staff.

“The numbers look good in terms of people anticipating and planning for growth,” he said. “But it means so doubt we are going to see pressure on staff hiring over the next 12 months.

“We know when those numbers start to tick up again that invariably we start to have a war for talent. Most of the organisations are predicting positive revenue growth and that means they are going to need to find the staff because they have the extra work and you start to see pressure on the labour market.”

The study included 48 consultancies and is independently delivered by Galaxy Research.

Nic Christensen 


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