95% global PR agencies expect an increase in client income post-Covid: ICCO Report

After a sobering analysis of the impact of COVID-19 on the PR industry last year, this year’s report by the International Communications Consultancy Organisation (ICCO) presents a more optimistic outlook. As stated by Francis Ingham, CEO, ICCO, “Overall optimism is notably higher than last year – up from 6.4 out of 10 to 7.3; and above 5 in every world region.”

Expectations of a more profitable year have increased by almost 50%. Respondents in every region are positive, compared with respondent in only two regions last year. In fact, 95% of the respondents expect an increase in client income, compared with only one in five last year.

According to the report, the Top 3 growth sectors remain the same as last year, and indeed in the same order. But their salience is growing. So, IT and technology is No. 1 (67% of respondents saying it is in their top 3 growing sectors, up from 52% last year); healthcare is No. 2 (58% up from 41%); and financial and professional services is No. 3 (35% up from 22%).

Addressing the digital needs of clients is more important than ever; and PR agencies continue to provide non-PR services, such as marketing and advertising. Agencies are reflecting this growth with own their spending plans. 3 of the top 4 areas PR firms plan to invest in are digital – and ESG is the other big spend item, reflecting the renewed focus in this area of business.

Ingham pointed out that the top service area is again corporate reputation and is also more pronounced (35% putting it in their top 3, up from 27% last year); with strategic consulting still at number, and increasing its numbers from 26% to 32%. Purpose and CSR work is now the average agency’s second biggest growth service area, reflecting presumably how public expectations of corporate behaviour have been transformed, and mirroring the surge in ESG investment too.

AI retains its place as the most important technology for PR businesses in the future. Agencies are using tech and digital to operate more efficiently and to improve employee engagement, as well as to build online communities for their clients. It’s all part of the industry’s evolution.

5 critical challenges

Along with the rising opportunities, there are also some critical challenges that agencies need to address:

  • Retaining talent is the number one challenge faced by agency leaders, with basically no change in the number saying that we are good at recruiting people from outside of the industry.
  • A majority of respondents say that identifying fake news is a problem.
  • While two of three say that PR is ethical, a significant minority disagree.
  • There is basically no change in PR reflecting the diversity of society.
  • And finally, offering mental health support to staff is still not the default position – a fact which is shameful given how many practitioners have suffered to keep their companies viable.

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