The proliferation of social-media is turning the tide for agencies and solo practitioners.
While annual revenue for public relations firms flat-lined from 2008 through this year, IBISWorld foresees a nearly 6 percent annual growth for the industry over the next five years. And while employment in the field has actually dropped in recent years, it's staged for a 3 percent increase every year through 2016.
Gary McCormick, chair of the board of directors of the Public Relations Society of America, says the industry's recent stagnancy was due to other companies that use PR firms or independent contractors cutting back on advertising, marketing, and PR expenses. And the upcoming PR boom? McCormick points to the increasing necessity for brands and companies to adeptly engage with customers over social media.
"The fact is that consumers having social media access, and really wanting to express their opinions about brands online, makes companies vulnerable." he says. "Running an ad isn't going to stop that. That's where PR comes in."
The industry has a low barrier to entry, and low capital intensity, but is highly competitive. It's a field increasingly conducive to very small firms and independent professionals. According to PRSA, there's an upward trend in solo practitioners: while 15.5 percent of PRSA were independent practitioners in 2010, this year the number is up to more than 18 percent. According to IBISWorld, the average company size in the field is just 2.16 employees.
By the Numbers:
Expected annual revenue growth rate through 2016, according to IBISWorld
Percentage growth in recent employment in public relations firms, according to IBISWorld
Percentage growth expected per year from 2011 through 2016 in employment in public relations firms according to IBISWorld
Average company profit margin, according to IBISWorld
Percent of PRSA members who claim to be solo practitioners, 2010
Percent of PRSA members who claim to be solo practitioners, 2011