There’s a move by PR agencies and PR consultants in Australia, under the auspices of a group affiliated to the Public Relations Institute of Australia, to seek payment when they are pitching for new business.
Having spent my career on the PR agency side of fence, I know that PR selection processes is one of the main bugbears of PR agencies. So I appreciate the reasons behind the move by the Registered Consultants Group.
Nonetheless, I think they are embarking on a ‘mission impossible’ in an area that is really ‘wild west country’ in so far as practices, guidelines – and even ethics – are concerned.
The RCG conducted a survey around PR selection practices among its PR agency and PR consultant members during July. They’ve just released headline results this week and they intend to discuss the matter more widely at their national conference in Sydney in November.
PR agencies and consultants are canvassing the concept because they argue that they need to better protect their intellectual property during the PR pitch or selection process. And, of course, they see that their advertising cousins have been getting recompensed in various forms for many years.
This is a big subject, which I will write more about in the months to come, but here’s my feeling about why the PRIA and its PR consultant and agency members, will struggle to make substantive progress.
1. Unlike advertising, which is much more established, there are few accepted principles, guidelines or protocols when it comes to hiring PR consultants and PR agencies.
2. There are too many instances where potential clients blatantly shop for strategies and ideas from competing agencies so they can pick the best. It’s not uncommon for a potential client to decide not to go ahead with an agency appointment after a pitch process.
3. While there’s been an explosion in the use of PR and the number of PR agencies, most of the growth is coming from SME’s whose processes and approaches to hiring are often pretty primitive to say the least.
4. The level of understanding of PR is still pretty elementary in large areas of the market and it’s not easy to differentiate between PR agencies. So the client resorts to wanting ideas, concepts and strategies.
5. There’s a whole bunch of PR agency people out there who will do anything to win business, so if they decide to go that extra mile it forces their competitors into the same situation.
6. Too much of the PR focus these days is on the marketing end of the business, and within this context PR is often seen as a cheap(er) form of marketing.
So in short it’s a largely immature market – on both sides of the fence.
Regrettably many PR Managers, especially in SME’s, have little or no idea as to how a PR agency works and often they don’t know who to turn to for help. And many of the new PR agencies have little or no appreciation of what constitutes sound business practices.
But it’s also a two tier market.
As I’ve mentioned there’s been an explosion at the small end of the market among SME’s looking for marketing solutions and just raw publicity. This is where PR agencies are being increasingly burnt.
On the other hand at the top end of the marketplace – among professional service firms, public companies, government departments and multi-nationals – there’s a bit more circumspection – from both sides.
The RCG and PRIA move is certainly a bold one. As far as I am aware there’s no other international PR peak body that has succeeded in introducing a policy that members must adhere to. Some ‘recommend’ that potential clients should be encouraged to recompense a PR agency for strategy, plans and creative in certain circumstances. And others ‘encourage’ reimbursement of expenses incurred by agencies in pitching.
One development that will bring a degree of order and sanity to the PR pitching business is the intervention of Procurement people and processes and /or the use of outside facilitators to achieve greater transparency. It’s a trend that is gradually taking effect in PR internationally, not surprisingly following in the footsteps of our advertising cousins.
One report I read stated that around 40 percent of all advertising pitches in Australia are now facilitated externally and Vale International, a global advertising consulting company, reported in March 2010 that in 2009 procurement officers took over 77% of the decision relating to advertising agency revenue (although there are though some aspects of this trend that are also of concern which I’ll cover at some later stage).
This whole topic of PR pitches is a topic close to my heart. I’ve written several articles on and around this topic in PR Influences and even on this blog. And acting as an intermediary or facilitator in the pitch process or in the agency-client relationship is a role I set for myself when I embarked on my second career in late 2009.
I wish the PR agencies and consultants luck, but it’s difficult to see an easy solution – for either the buyer or seller of PR services – in the immediate future.
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