Davis+Gilbert’s 13th Annual Public Relations Industry Trends Report reveals a year marked by cautious optimism, economic headwinds, and rapid technological transformation. The 2025 Trends Report draws on insights from 181 firms of various sizes, specialties, and regions, providing a comprehensive look at financial performance, artificial intelligence usage and adoption, client service offerings, staffing strategies, diversity, equity and inclusion (DEI), and mergers and acquisitions (M&A) activity.
Financial Outlook Hits Five-Year Low
After years of steady growth and transformation, this year’s data reveals a marked shift in sentiment and performance. Financial expectations for revenue and profit performance this year are at their lowest point since 2021. Only half of surveyed firms anticipate revenue growth, and 44% expect an increase in profit.
“Firms are facing real challenges in growing both revenue and profits, especially as client budgets tighten and expectations rise,” said Michael Lasky, Chair of Davis+Gilbert’s Public Relations Law Practice. “But as we’ve seen in this year’s data, firms that are prepared — those that invest in talent, technology and strategic alignment — are better positioned to lean into opportunity and be agile in the face of uncertainty.”
AI Adoption Surges
Survey results showed that 99% of firms now use AI, with 79% of firms leveraging it for written content creation. Usage has jumped significantly year-over-year, with over half of firms using AI for tasks such as visual content creation, data analytics and media monitoring.
Despite widespread adoption and investment in AI platforms, it’s incredulous that less than half of firms have comprehensive AI usage guidelines in place. This shows a strategic misalignment in policies and practices.
“AI is no longer a future consideration — it’s a present-day imperative,” added Michael. “Firms that embrace AI thoughtfully and strategically are not only improving efficiency but also unlocking new creative and analytical capabilities. The challenge now is ensuring that usage is governed by clear policies that protect both the firm and its clients.”
Adapting to Client Needs
PR firms are constantly adapting their services and approach to fit client needs. This year, firms are investing heavily in technology and digital growth. AI-powered solutions top the list, with 92% of firms investing in some way – whether that be using third-party platforms (46%), building proprietary tools (32%), or partnerships/joint ventures (14%).
Talent and Staffing
While hiring is down and layoffs are up amidst financial concerns, PR firms are allocating more budget toward compensation to stay competitive. 37% of firms expect to spend more than 60% of net revenue on compensation – the highest percent reported in the 13 years of Davis+Gilbert’s Annual Trends Report.
Among top-performing firms — those that achieved more than 10% growth in revenue and/pr profit — 57% offer long-term incentive plans (LTIPs) and 50% award equity or equity equivalents (i.e., phantom or contract equity). This compares to 45% and 39%, respectively, across all respondents. These findings demonstrate that strategic incentive arrangements can be a powerful tool for driving performance, retention and alignment with business goals.
Trends and Challenges in DEI
Despite 76% of firms reporting no change in their DEI initiatives over the past year, which saw heightened scrutiny of DEI programs, only 21% of firms reported increasing the number of employees from historically underrepresented groups. There has been a dramatic decline in DEI hiring year after year since 2022, when 60% of firms reported an increase in hiring from historically underrepresented groups.
PR M&A Activity Admits Uncertainty
M&A activity slowed overall in the first 9½ months of 2025, with 62 completed deals compared to 79 in the same period last year. Persistent macroeconomic headwinds – including U.S. federal policy and tariff uncertainty, elevated interest rates, slower industry growth, and market volatility – all contributed to a slowdown in deal activity.
March-May was a particularly sluggish period, but deal activity has rebounded in the last 3 months, driven largely by private equity buyers. While private equity accounted for 35% of all completed transactions year-to-date, that figure jumped to 50% of deals in the last three months alone. Based on current tailwinds, we anticipate a robust finish to 2025, with momentum carrying into the first half of 2026.
“While overall deal volume is down, the quality and scale of transactions are shifting,” said Brad Schwartzberg, Co-Chair of Davis+Gilbert’s Corporate + Transactions Practice Group. “We’re seeing a notable uptick in deals involving PR firms with revenues over $25 million, signaling a growing appetite for larger, more strategic acquisitions. Buyers are increasingly focused on firms that offer integrated services and digital capabilities, which aligns with broader industry trends toward consolidation and innovation.”
Looking Ahead to 2026
When looking at the year ahead, top concerns include flat client budgets, revenue growth challenges, and keeping pace with digital transformation. Just over half of firms reported an optimistic outlook, compared to 70% last year. At the same time, uncertainty is on the rise. 30% of respondents are unsure about the future, and 14% describe their outlook as anxious – a figure that has tripled over the past 5 years.