PR: MARKETING PR, MEDIA RELATIONS AS PUBLIC RELATIONS – OR A MIX?
This week, I had separate lunches with two colleague CEOs of Public Relations firms. Both firms are larger than us, and I respect both CEOs. I can’t say I often dine or spend time with industry colleagues. Generally, my time is spent with clients, employees, journalists or hunting for business. Given the pure chaos which exists in the market, it’s necessary to hear (and share) with industry colleagues.
An interesting topic that came up was the definition of Public Relations in 2009. Not the textbook definition, but the actual definition vis a vis what clients will pay for and what agencies can ask to be paid for. (As I often say, it’s easy to say, much harder to do. Running an agency isn’t an experiment or concept – it’s reality). Particularly in times like these, agencies need to be clear on what they do. Clients rightfully demand responsibility for every penny spent, and PR firms need to know what they are tasked to deliver (and what can they deliver).
A key question for agencies remains: Do we define Public Relations as PR/marketing, or is PR centered around media and media relations? Or a combination of the 2 ? I ask this question not as an academic, but more as a practicality of running a business. It’s very challenging to charge a media relations client $50K a month, whereas agencies who look at PR primarily through marketing eyes can often charge that and more. Conversely, it’s often a challenge to find senior talent who will call the media (as we at 5W PR expect). The skills to succeed at creating PR marketing programs are often antithetical to the skills required to thrive in media.
It is very, very much unknown just how small the PR agency world is. There are fewer than 200 independently owned PR firms in the US, and that number is sure to shrink in 2009 with the recession. Of course, the above list doesn’t count the many 1 or 2 person “PR” businesses, which I really wouldn’t characterize as agencies. And there are also the 20 or so mega agencies owned by publicly traded holding companies.
As the CEO of the 21st largest independent firm in the US, I am often amazed at the small size of PR retainers. As I often state, a $1M (or even $500K) PR client is one that any PR firm in the US would chase endlessly, whereas a $1M advertising client is one that very few top 100 ad agencies would pay a minute of attention to. It’s a disparity that I very much hope will change in the future. But for now, PR simply remains the overlooked bastard step child.
While reading about the recent scandal surrounding Brunswick, a highly-specialized financial public relations firm, I wondered why PR firm employees don’t earn what bankers earn, despite the fact that PR professionals shape messaging, create public perception, and move stock markets en masse. It’s because the fees corporations pay PR people simply aren’t in the millions. (Although a firm like Brunswick does charge a stiff hourly rate, compensation doesn’t come anywhere near to what a top lawyer or banker makes).
Despite The New York Times’ statement that financial PR agencies “are often as deeply embedded in deals as the bankers and lawyers who negotiate them,” PR firms simply aren’t huge businesses like banks or law firms. For anyone who wants to work at a PR firm, there simply aren’t more than a handful of options.
Ronn Torossian
December 22nd, 2008 at 7:54 pm
I think the key element is the fact that PR is something you cannot quantify. From that statement, we can easily understand why people need to always try to find a justification in the cost that a PR strategy implies : PR professionals produce brand image, something that’s linked to perception, something that no annual report will be able to highlight at the end of the day. We work with images, messages and ideas while lawyers have their cases and financial advisors analyze datas. In a society where productivity is a major element, PR and its hard-to-define immediate results can ofter be considered by some people as a source of unnecessary expenses.
I think the example you picked of PR in the finance industry is clearly explaining that problem we are facing in our everyday life : stock exchange is 90% brand image,rumors or ideas people have about a company. And who is going to help a company work on that? PR professionals. No marketing in this. Just pure hardcore media relations, defined messages and strategic thinking about the best way to put things together in order to convince investors that what our client is the one to trust.
Mixing PR with marketing is, in my opinion, an excuse for some companies to shrink expenses linked to the communications strategies.
In other words, we are definitely that overlooked bastard stepchild!