The latest Communication and Public Relations Australia (CPRA) agency benchmark report indicates a sector that is resilient, increasingly match fit and is gaining in prominence in marketing plans after one of the most challenging years on record.
The detailed report, commissioned by the CPRA and carried out by Lonergan, surveyed 50 PR and communications agencies of various sizes. It found that profitability increased marginally (profit margins were up from 11 per cent in 2024 to 12 per cent in 2025), more clients are returning to retainers, churn rates are low and agencies are evolving their fee structures to become more agile.
“What we saw in this last 12 months, or the 12 months that the research covers, is that our industry is beginning to come out of the turmoil of 2024 and is putting in place the building blocks of a new model for the future,” said Chris Savage, chairman of the agency special interest group at CPRA who runs a consultancy, The Savage Company.
“The overall performance of the industry has re-endorsed our view that earned first will be a lead player in the new age of marketing communications.”
Savage believes that earned media is ideally primed to thrive in a world of media fragmentation and social media wrestling with traditional media for attention.
“In a world where the creative marketing industry is really going to be about brand led, socially driven creativity, the skills and the mindset of the current earned first industry is ideally positioned to triumph and to lead in that area,” said Savage, a 40-year veteran of the marketing communications industry who has previously led Burson-Marsteller and STW Group PR.
“Earned really needs to be rebadged to engagement media, because that’s what the modern craft is all about.”
The results of the CPRA: Agency SIG Benchmark 2025 add weight to his point of view. Although profitability is still relatively low, at 12 per cent, this is a marginal improvement on 2024.
Flat revenue during a cost of living crisis is another admirable result. Medium and larger-sized agencies grew their revenue but this was offset by smaller shops revenue shrinking (see chart below).
Other financial performance indicators present a rosier picture. The proportion of clients on retainer has spiked significantly, up from 45 per cent of annual fees in 2024 to 6 per cent in 2025. Small agencies (up 19 percentage points to 74 per cent) and large agencies (up 15 points to 47 per cent) showed the largest rise in retainers.
On average, agencies had 16 permanent clients and 22 projects for the year, both up on the year prior.
The charge out rates of monthly retainers also increased by 64 per cent to $17,707—the highest rate for the past five surveys. Recurring revenue from clients was 60 per cent, marginally down on the 63 per cent in 2024.
“What that says to me is that there’s been a resurgence of client acknowledgement that having earned first as an always on consistent part of the marketing armoury is front and centre again, they’ve recommitted to retainers,” Savage said.
“They want the capability every day, 24/7, as part of what they’re doing. And we’re seeing this with an increase in retainer relationships with agencies. And that’s a positive when it comes to revenue.”
Agencies have also managed to lift their average charge out rates by 5 per cent.
What hasn’t increased too much are staff salaries, which on average grew by 3 per cent in 2025. This figure is below Australia’s inflation level of 3.8 per cent (consumer price index).
Small and medium sized agencies lifted staff pay by more (5 per cent) than large agencies (-2 per cent). The number of staff being paid bonuses decreased from 7.7 to 5.6.
“The PR agency sector has done a better job in FY 25 at managing costs; being commercially super sharp has never been a hallmark of PR agency leaders,” Savage explained.
“There’s been a maturing and a sharpening of commercial acumen and we’re seeing costs being managed very tightly. We’re even seeing with our compensation figures, the average increase in staff salary is 3 per cent across all bands, and that’s down from 6 per cent from the year before.”
Savage said the industry needs to evolve business models to become less dependent on full time salaried staff.
“Seventy-five per cent of the costs of most agencies is through staff compensation and we’ve got to make sure that we are managing our fixed compensation costs and using the right proportion of bench specialist capabilities as projects come in. This means we need to begin to rely more on contractors, freelancers and specialists off the bench to try and manage and curtail growth of our fixed costs when it comes to team.
“That said, we are seeing agencies restructuring and becoming more agile. It’s clear what we do in earned first is needed, wanted and very much part of the future. We’ve got more work to do to change and evolve our pricing, our resources, our product offering, but we were on the way in embracing that change and staying a step ahead of that change.”
Another positive indicator is that PR agency staff are staying put. The average churn rate dropped from 27 per cent in 2024 to 19 per cent in 2025.
When staff did leave, four in ten went to a client side role while 28 per cent joined another PR agency.
Agencies are getting more out of staff with staff utilisation rising from 89 per cent in 2024 to 92 per cent this year, with senior account managers having the highest billing targets of 9.3 hours.
This has led to an increase in contribution margin from 40 per cent to 54 per cent.
“There’s been big improvement with people and staff, particularly in terms of retention,” Savage said.
“Agencies are doing a better job at career planning, at remuneration structures, at balancing health and wellness but at the same time the market is tough.
“There’s a lot of uncertainty and my feeling is staff are more risk averse and are staying put in an environment where they feel more secure than going out into the marketplace.”
There has been a gradual return to the office with two thirds of agencies mandating three days in. One in five agencies have mandated a four day office week which is up from 11 per cent from 2024.
Work from home policies are “here to stay” and not even being discussed by agency leaders anymore as attention shifts to AI and evolving business models.
Agencies are already using AI technology throughout the business, with content generation (62 per cent), communications (62 per cent), and speech and language transcription (52 per cent) the most common use cases.
“Our models are evolving to be a lot more sustainable. We’re having conversations around things like processing and structure and profitability, and that we’re seeing clients,” said Helen Hutchings, the CPRA chair and managing director of Philips Group.
“What we are seeing is the market is really turning around from 2024, and we’ve really seen that growth as well, which is very pleasing. We’re just very optimistic as an industry.”
