New Delhi: The public relations (PR) industry is expected to touch Rs.2,100 crore by fiscal 2020, according to a report by Public Relations Consultants Association of India. While most of the growth will come from public relations, the report said, digital, social media and content driven campaigns will contribute as much as 25% to the revenue of PR firms.
The survey, conducted among 42 companies in India between August and September this year by FeedbackBusiness Consulting, shows that the industry more than doubled in size from Rs.490 crore in fiscal 2008 to Rs.1,120 crore in fiscal 2016.
“New services such as digital and social media communications, along with crisis and CSR management, have enabled strong growth of the industry which is expected to double in size by 2020 and be worth over Rs.2,100 crore, said Nitin Mantri, president of the public relations consultants association and chief executive of Avian Media .
“ PR practitioners are also waking to the huge potential, most of which is still untapped, that lies in the fast-growing rural markets. Despite limited retail access, consumer demand is booming in these markets, being fueled by mobile transactions,” he added.
According to the report, the information and communication technology sector is the biggest client for PR firms, accounting for more than 20% of their revenue, closely followed by financial services firms and the fast moving consumer goods sector which accounted for 12% and 9% respectively. The PR industry, which grew by 19% this year as compared with 13% last year, is on a strong growth trajectory.
The report said the PR Industry has seen consolidation at the top of the pyramid, resulting in very large players gaining higher market shares, while the bottom has expanded with an increasing number of boutique PR firms setting up businesses. However, their revenue growth remains low.
Clients are slowly shifting towards a project-based relationship with PR firms over the retainer-based model, even though currently it accounts for 74% of the business while the remaining 26% comes from project businesses.
This dynamic is expected to change in the near future, said the report. The increasingly competitive agency landscape and mushrooming of freelancers have increased the options for brands.
Among the challenges, dearth of right talent and retention is the biggest one. The industry currently employs more than 7,750 professionals and 5-10% of this number are added to the workforce every year. Most of this workforce is employed in Delhi and Mumbai, both of which continue to be the industry hubs in the country.
Apart from resources, the lack of measurement tools, low business entry barriers, lack of investment in technology and an increase in the number of bad debt cases are some of other challenges plaguing the industry.
However, the report said PR companies are positive about the future of the industry and estimate a 15-16% year on year growth in the next four years.
Start-ups, sports and entertainment are seen as the emerging business segment, while the industry is largely driven by the services and manufacturing segment.