LONDON—While public relations agency leaders from around the world are still bullish about the future of their business, they are more cautious in their optimism than in previous years, according to the results of the ICCO World PR Report 2020.

When asked to rate their optimism about the PR market on a scale of one to 10, the average response from respondents was 7.0 (down from 7.7 last year and 7.8 the year before). When asked whether they expected an increase in agency profitability this year, the average score was 6.7 (relatively stable based on 6.9 last year and 6.4 the year before).

“Growth, optimism, and profitability have become the norm,” says Francis Ingham, ICCO chief executive. “The industry has transformed itself, embracing new skills and new methods of communicating. The revolutionization of business, society, and politics that the digital landscape has effected has played to our strengths.”

There were significant differences in optimism from region to region. When it comes to optimism about the market, North American respondents were the most bullish (7.7), ahead of those in growth markets such as Latin America (7.2), Eastern Europe and Asia-Pacific (7.0). By contrast, respondents from the UK (6.8), Western Europe (6.7) and Africa and the Middle East (6.5) were more cautious.

Developing markets such as Latin America (7.3) and Eastern Europe (7.0) were most likely to anticipate improved profits this year, along with North America (also 7.0). Even in the UK (6.8), Asia-Pacific (6.7) and Western Europe (6.4) most respondents expected to see some growth. But Africa and the Middle East stood out for its pessimism (5.1) on profitability.

The optimism spans both the corporate reputation realm and the marketing arena, with respondents agreeing (6.7) that marketers are spending more money on PR in comparison to other communications disciplines—with Eastern Europe (7.3), Latin America (7.1) and Western Europe and North America (7.0) particularly optimistic.

There was slightly less agreement with the idea that clients are willing to turn to public relations firms to lead non-traditional services (6.0), with Western Europe (5.9), the UK and Asia-Pacific (5.8) especially concerned that clients are not expanding the views of the kinds of work that PR agencies can carry out.

Despite those concerns, most respondents expect a significant diversification of the channels PR uses to reach audiences. Currently, respondents report that about half (49%) of their work is in earned media, with 20% in shared, 19% in owned, and 12% in paid.

But over the next five years, respondents believe earned will decline to about a third (35% of their total work, with growth in all the other categories: shared up to 25%, owned up to 24%, and paid up to 16%).

The technology sector was the fastest-growing over the past 12 months, cited by 51% of respondents, ahead of financial and professional services (37%), consumer products (27%), and healthcare (26%).