PR Agency Blunders Are Rooted in Economics


Online journalist and new media consultant David Spark outlined his terrible experience with a large PR firm yesterday on his blog. It’s the same old story and one that many bloggers and journalists experience when working with PR consultants from big agencies. In this case, David was spammed by the agency and approached to be a “friend” of their client on Facebook when neither the agency nor the client knew who David was – or had bothered to read his blog or his web site.

We feel your pain PR consultant.

We feel your pain PR consultant.

David showed a lot of class by refusing to name the offending agency or the client – something that many bloggers would never do. It’s a credit to David’s character.

It’s these types of situations that bloggers and journalists point to as evidence that PR people just don’t get new media. But that’s not true. At all. Take a look at any PR agency on the web and you’ll find at least one blog, RSS feeds, and invitations to join them on Twitter or Facebook. All of them use hyperlinks and try to optimize news releases for search. At this point, the vast majority of PR agencies not only get social media — but are actively participating it.

So what’s going on? Why do PR agencies continue to fumble media relations and social media?

Here’s the answer: it’s economics.

Bear with me as I explain. PR agencies (especially agencies that do technology PR) really came into their own in the 1980s. But they were mostly smaller, regional shops. But during the go-go 1990s, PR exploded and suddenly every company desperately wanted a PR firm (in fact, many venture capitalists demanded that start-ups invest in PR. It’s actually a wise decision – PR gives companies fantastic ROI.).

Monthly retainers soared. At one point in 2000, when I worked for Weber Shandwick, the minimum retainer was $40,000 a month. Agencies grew like wild-fire and they merged and acquired and grew into big brands. But they were structured and designed around large monthly retainers. Consultants who worked for the firms worked on an average of three accounts.

But then the dot-bomb crash ruined everything. Retainers plunged and firms were forced to lay-off staff and reduced head count. In the mid-2000s, firms started to recover, but retainers never recovered. A $40,000 a month account was now a large client – not the minimum. Then, of course, we entered the latest economic downturn (bloodbath?) and retainers have sunk to even lower depths. The average PR retainers are about $10,000 – some even lower.

overworked and under appreciated.

PR Consultants: overworked and under appreciated.

I’m speaking in generalities here — obviously there are still large companies spending millions on PR annually. But even the big companies have reduced budgets drastically. But the consequences have been the same: PR agencies are forced to reduce the size of their account teams and assign their consultants to more clients in order to be profitable. So consultants that used to work on three clients with an adequate staff are now working on more than five accounts with teams that are too small.

The result is overworked PR consultants at a time when social media is exploding. That’s why we get PR consultants making bad decisions: like using mass email pitches to reach bloggers and journalists. It’s why they continue to improperly research targets. They don’t have the time. They take shortcuts because they have to. Client expectations have never been higher. PR consultants need to prove they can get results every day and you’re only as good as your last success.

Unfortunately, in the new world order of social media – your mistakes come back to haunt you. Sharp journalists like David Spark catch you and call you out.

It’s difficult to know how this will all shake out. But I predict a movement back to smaller PR agencies – where senior consultants can give more hands on attention and counsel to clients (please note that I’m a solo PR practitioner). The economics make it difficult for large PR firms to work with small and mid-sized companies.

I’d love to get some feedback on this topic. If you are a client what’s been your experience with your PR agency lately? If you’re a journalist or blogger have you noticed this trend? And I’d love to hear from any PR people about their work environment lately (comment anonymously if you’d like).

10 Responses to “PR Agency Blunders Are Rooted in Economics”

  1. George,

    I agree with you to an extent, however, I don’t think blame can be put entirely onto the economics of agencies.

    As a former agency professional myself, part of the problem I saw was that many agencies put too much focus on the end result of getting a hit, and neglected the relationship building phase with reporters. In many cases, it was up to the PR professional to build relationships, and many had no idea that you could even talk to a reporter without having something to pitch. I feel that if more attention were given to HOW to build a relationship with a reporter (and David does a good job of saying in his post that he’s met with PR people, gone out to lunch with them, had discussions outside of a pitch with them, etc) then people would know who they were working with and wouldn’t pitch off-topic stories to the press.

    Now I know this is difficult considering the enormous time constraints both reporters AND PR professionals are under these days, but if PR professionals just took 5 minutes out of their day, each day to call/e-mail/tweet a reporter and introduce themselves and get to know them without pitching them anything, it would help with the pitch process down the road.

    It goes back to your earlier post on how the business model of PR agencies needs to change. Maybe this is one step agencies can take to help build their brand and their clients’ brands.

  2. Great article. This is completely in line with what I’ve seen and experienced in the industry the past few years.

    I agree with you that if PR is going to stay afloat, we need to go back to the model of more robust client teams and increased attention to researching targets. There’s just no excuse for the clueless pitch anymore – we need to have time to research and actually get to know the people we’re building relationships with!

  3. Hi Michele:
    Hard to disagree, but I’d add that in agency environments where people are overworked – training and guidance are usually the first causalities.

    Hi Marie:
    I like the idea of launching a campaign around “Ending the Clueless Pitch!”

  4. In times of economic downturn when PR professionals are all stretched so thin… all I can say is thank you god for the miracle that are H.A.R.O. queries.

    Like little pieces of heaven in my inbox.

  5. Good advertisement for H.A.R.O. Make sure you alert Skydiver to your hit.

  6. I agree with your contentions about the PR agency business model. We have a mid-size agency owned by a huge conglomerate that does some good work for us (lacking in social media knowledge/ skills and senior counsel though). We hadn’t even heard from their senior management staff in months until they scheduled a call with us last week to tell us they had laid people off, and that we are getting a whole new team in London (oh and “we appreciate your business” all of a sudden). I continue to be shocked that no one from their senior management team calls us to ask how things are going. They don’t even do customer surveys. This is not the way I’d run an agency.

  7. Hi Anonymous:
    That’s too bad about losing your London team. Those senior managers probably have so many clients that they don’t know where to turn anymore, but I’m surprised that they aren’t in contact with you at least weekly. Changes like your experiencing can really shake karma – so I’d keep an eye on things until the new team settles in. Good luck.

  8. Agree with most of the above. There is a client education problem here as well though. Most clients, understandably, are fixated on volume of column inches. The modern PR practitioner is going to have get them to understand that more than ever it is where the copy shows up that counts. Better to have 10 readers who are key prospects than 1000 who aren’t.

    PRs need to realise that they should concentrate on building a relationship with the right people and forget the e-mail blasts which just look like spam and are a poor reflection on the industry as a whole.

  9. Agree to most although there are PR consultants who willingly take short cuts and use the old tactic to “throw spaghetti on the wall to see what sticks.” However, for those more concerned with their reputation and good name who take the time to research each contact individually before hitting the send button, late nights in the office and working weekends end up becoming the rule, along with a feeling of frustration and under appreciation.

Trackbacks/Pingbacks

  1. Why PR agencies fumble media relations and social media - Glen Turpin: The Identity Question - February 18, 2009

    [...] answer: economics. The result is overworked PR consultants at a time when social media is exploding. That’s why [...]

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