"The inflationary cost spiral began affecting the industry early, and that squeezed operating margins to 19.7 percent from the record 22 percent in 2006," reported the survey's originator and author Rick Gould, a managing partner of the merger and management consulting firm. "This offset a remarkable average of $221,388 per professional in annual billings and a huge jump in average monthly fee minimums to $14,000 from $10,000 one year earlier." A record number of 105 targeted agencies responded to the survey, ranging in fee volume from $1 million to $100 million.

In total, the SGP Benchmarking Survey covers 22 separate metrics of agency performance and best practices. Other highlights of the findings are:

• Salaries of account management professionals remained flat at 40.3 percent of revenues; bonuses likewise were constant at 3.3 percent; and total labor costs rose more than a full point to 54.5 percent from 53.1 percent in the prior year.
• Baseline hours (of billable time) remained at 1700, consistent with those of the past several years.
• Total overhead also rose, reaching 25.8 percent, again an early indicator of inflation that is now impacting business broadly across the nation.
• Billing rates of agency presidents ranged from $409 per hour in New York to $329 in Northern California; and other agency positions followed a similar pattern.

StevensGouldPincus specializes in merger and management consulting to the PR agency industry. It is headed by partners Gould, former owner an accounting firm serving this industry; Art Stevens, former owner of Lobsenz Stevens Public Relations; Ted Pincus, former owner of The Financial Relations Board; and Mike Muraszko, former senior executive at Manning Selvage & Lee.