Independent agencies thriving
For years there has been talk of consolidation in the PR industry and the decline of specialist independent firms. The argument typically goes that the big firms will continue to acquire the small firms and the market will consolidate. The reality is that the opposite is happening and independent firms are growing faster than their larger competitors. According to The Holmes Report, the PR industry as a whole grew to be a $15 billion global market in 2016 with the independent sector growing by 9% compared to just 5.1% for publicly quoted agencies.
As Paul Holmes, Founder and Chair of The Holmes Report said, “The fact that midsize independent firms continue to outperform the giant holding company agencies is clear evidence that the much-ballyhooed ‘consolidation’ of our industry is a chimera. The fact is that clients are increasingly looking for best-in-breed agencies in individual markets and for individual audience segments. I would suggest that as PR comes to be seen as more and more mission critical, this trend will continue and expand."
Of course, it is true that larger firms frequently buy independent agencies to gain new areas of expertise, expand into new countries or simply to increase market share and this will continue. However, as quickly as small firms are acquired new ones continue to emerge and there are fundamental reasons why the independent sector is thriving and will continue to do so.
PR is a fast moving business that requires continued adaptability and fresh thinking. Just take a look at the changes in the media landscape and in the many ways that information is distributed and consumed these days. PR firms need to be constantly evolving to reflect these changes and shape their services and their approach accordingly. As in any industry, smaller PR firms tend to be more adaptable.
At its heart, PR is a creative business. It is driven by small, close-knit teams of people with sector expertise, creativity and in-depth understanding of their clients’ needs. Small, creative teams work best in environments where they are free from the shackles of large company administrative structures, bureaucratic constraints and big company politics.
Another key factor is simply that smaller, independent firms are leaner and have lower operating costs and as a result are not only able to provide more cost-effective services but are also able to provide clients with far more access to their senior staff.