PR industry in India grew 12% to reach Rs 1,600 cr in 2019: PRCAI report

The public relations (PR) industry grew 12 per cent to touch Rs 1,600 crore in FY19, according to the fourth ‘State of the Industry Survey 2019’ report by the Public Relations Consultants Association of India (PRCAI). While media relations continues to be the largest service, non-media relations services now contribute 53 per cent of the industry’s revenue.

The online survey, conducted among 34 PR companies in India between July and August 2019 by i2iResearch, has forecast that the industry will continue to grow at a CAGR of 12.5 per cent, reaching Rs 1,800 crore by 2020.

Nitin Mantri, President, PRCAI, and Group CEO, Avian WE, said, “The ‘State of the Industry Survey 2019’ findings are important indicators of the excellent performance of the PR industry at a time when most sectors are reporting slow growth. The industry is on the cusp of significant change. For the first time, revenue from non-media PR services (53%) has overtaken revenue from media relations (47%). This shift is also visible in the increase in technology spend by all PR firms and their effort to focus on lateral employment to expand service portfolios to cover more digital, social and data-related services. However, we must not stagnate. If we want to lead in this transformational world and drive our clients’ businesses forward, we must continue to innovate, engage, and evolve.”

Growth drivers

The growth this year has been driven by very large (annual revenue greater than Rs 85 crore) and large (Rs 30-85 crore) firms. Though media relations continues to be the largest service, there has been a decline in its revenue share from 50 per cent in FY18 to 47 per cent in FY19. Three service lines – media relations, digital, and public affairs – contributed as much as 73 per cent to the revenue of PR firms. The second and third largest services are digital and social media and public affairs, respectively. The revenue share of digital and social media services has increased from 12 per cent in FY18 to 16 per cent in FY19. Very large PR firms are doing the maximum amount of policy work, according to the report.

The report highlighted an interesting cultural shift in the industry. While large PR firms are still getting more than 50 per cent of their revenues from conventional businesses, the younger firms have been able to reduce their dependence on conventional media relations in favour of digital, social media, content and design services.

Media relations is still the biggest service offered by very large firms (52%) and large firms (56%).
Non-media PR constitutes 60% of the work performed by smaller firms and freelancers.
Among sectors, fast-moving consumer goods (FMCG), Information Technology (IT), travel and government (both central and state) have driven the industry’s growth, with a 44% contribution to the revenue.

Challenges faced by the PR industry

The availability of talent remains a key issue with PR firms. The average revenue per employee in the last four years has grown by only 2 per cent, resulting in increased employee cost and stress on profitability.

91% of the PR firms surveyed said talent availability was impacting work
79% said data and creative employees were hard to find and retain
76% expressed concern about high attrition at entry levels
64% said there was limited availability of talent in digital and public affairs segments

Pricing under stiff competition continues to be a problem because clients are tightening their budget. Compared to 46 per cent in FY18, 71 per cent of PR firms said price cut was a growing concern in acquiring or retaining new clients.

Key trends for FY20

Increased demand for people who understand the digital space, integrated PR, increased emphasis on campaign-driven work, visual communication and data-driven activities, more investment in technology, and the integration of PR and digital are the key trends foreseen.

91% of the respondents said there was a high demand for people with social media, data and analytics skills
89% said integrated PR was the key to brand building
87% said integration of PR and digital was critical as social PR was becoming more important than traditional PR
81% of PR firms said they will do more campaign-driven work in FY20
81% of PR firms said they will focus more on visual communication
71% of the respondents said they will invest more in technology