A century after the birth of the PR agency, data suggests agencies must evolve to thrive

We’re fast approaching the centenary of the establishment of Editorial Services Ltd, considered by many to be the UK’s first professional public relations agency. Its founder, Sir Basil Clarke, was a prominent war correspondent during the First World War and the Easter Rising before founding his firm in 1924 and quickly acquiring the likes of Heinz, Lyons and the National Union of Teachers as clients.

Sir Basil proved that while you don’t necessarily need to be battle-hardened or at the front line of a crisis to be a successful PR pro, it certainly helps.

What of the UK’s PR scene today, nearly 100 years later?

Looking into the most recent Companies House data, I discovered that last year, 1,556 new businesses were registered using ‘Public relations and communications activities’ as their primary standard industrial classification (or ‘SIC’) code.

On first glance, this seemed like a healthy number, until I quickly realised that it was actually 25% lower than the number from five years ago. Companies House data can be a useful indicator of business sentiment, as well as the overall health of specific industries.

So why has there seemingly been a decline in business activity within PR?

It certainly can’t be pinned down to one reason. Firstly, and perhaps unsurprisingly, there is the economic downturn which has rocked businesses of almost every shape and size to one degree or another. In fact, the Companies House data quite clearly shows a slowdown in the number of new businesses established annually since 2020 - the start of the Covid-19 pandemic.

Continued financial uncertainty, coupled with tightening client budgets, may have caused aspiring entrepreneurs to doubt their chances of starting a successful PR agency in what is already a highly competitive environment.

Increasing competition has also likely had an impact.

As the PR and comms industry has become more crowded, it has become more difficult for new businesses to stand out and compete with established players. This has not only resulted in fewer new businesses being set up, but it has also put pressure on existing businesses to evolve and adapt in order to stay relevant. In some cases, this has been achieved through M&A activity which enables agencies to acquire specialist capabilities.

This points to another major factor: the changing nature of PR and comms itself. The ubiquity of digital channels today has fundamentally altered what PR means and what success looks like.

Agencies that recognise the natural intersection between PR, SEO, content marketing, paid media, and social media are now offering integrated, data-driven and more measurable digital strategies and consultancy - and are finding great success in doing so.

This shift may well have made it more difficult for startup businesses to establish themselves, as they may not have the skills and experience required to compete in this rapidly changing environment.

It could be that many businesses emerging on the scene are not styling themselves as ‘traditional’ PR and comms agencies at all.

This may go some way to explaining the numbers from Companies House. And perhaps sooner rather than later, Companies House will need to invent a new category for this new generation of businesses.

Written by Matthew Robinson, senior digital strategist at Definition, a digital communications agency specialising in B2B PR, B2B SEO and B2B social media.