While US PR practice when it comes to hiring, and working with, PR consultants or PR agencies can be perceived as rather legalistic Australian organisations are probably at the other end of the spectrum – just a tad too loose with their paperwork.

In my experience across Australia and New Zealand too few senior internal PR professionals, or those they report to, are mindful of some of the key business issues that can arise during a relationship between an organisation and a PR consultant or PR agency!

This came to mind this last week while viewing some US PR blog exchanges.

Ironically the questions, exchanges and discussions were about two of the perennial issues that I found arose most frequently during my PR agency tenure i.e.

1) Who owns the media lists and contacts that the PR agency uses?
2) What are the rules around the client hiring a PR agency staffer?

In my experience uncertainty around these two issues is often a consequence of there being no written contract between the client and PR agency, or one that simply doesn’t address key business relationship issues – a topic I have written about previously.

With regard to media lists the issue normally arose either when the client wanted, for whatever reason, to do some media contact that was normally handled by the PR agency. Or alternatively it became an issue when the client was changing PR agencies, or deciding to go completely in-house.

Both scenarios are almost certain to raise the suspicions or hackles of the PR agency. But that’s another topic for another time.

When it comes to protocols , and the legalities, my perspective is that:

1) Normally PR agencies subscribe to media information (most often electronic data bases that are continuously updated). In addition they establish their own media contacts and build media relationships as part of their business which becomes a key part of their ‘tools of trade’.
2) Media lists therefore become the proprietary intellectual property of the agency, with the cost of these services being part of the overhead structure of the PR agency which is recovered as part of the hourly billing structure.

Therefore in my view the client has no right, and the PR agency no obligation, to hand over media lists. However, I believe that it is not unreasonable for a client to ask for, and be supplied with by the PR agency, a list of media with generic contact details (i.e. general email, phone numbers etc).

When it comes to the hiring of PR agency staff by a client the issues are potentially more difficult – for both parties.  However, it’s a fact of life and with a bit of forethought it can easily be navigated to the satisfaction of both parties (or without spilling too much blood!).

 My standard agency contract always had a clause that prevented either party hiring a staffer from the other (yes, occasionally a PR agency does want to hire someone from a client!).

This stipulated that during the period of the contract and for a period after the contract ended (most commonly six months or a year) neither party was able, without the consent of the other, to engage as an employee or consultant (either directly or indirectly in whatever capacity) any person previously employed by the other.

From the PR agency perspective this clause had the additional purpose of ensuring a key staffer (and our client!) was not poached by another PR agency.

I found that covering this up front in a transparent manner ensured that both client and PR agency knew what the protocols and rules were should this situation arise.

Of course, the real issue is the wording “without the consent of the other”. Clearly where the relationship between client and agency is a strong one both parties will wish to negotiate so that a mutually satisfactory arrangement can be achieved.

To me the fairest way of handling this is for the employing party to pay the other as a minimum the standard commission they would have to pay if they were hiring through an executive recruitment firm.

That at least provides the party losing the staffer (in my experience usually the PR agency) some recompense. And it’s no more than an organisation would have to pay to recruit a PR professional from the marketplace.

In the US they are often even more prescriptive in their contracts. Because the practice is probably more prevalent in the US many of their contracts state that should a client wish to hire a PR agency staffer that they must pay a recruiting fee equal to a percentage (I have seen amounts ranging from 25% to 50%) of the employee’s current annual compensation.

Taking the time at the start of a client-supplier public relations relationship to think through issues that can arise is a worthwhile investment. It’s a shame too few Australian organisations – or PR agencies for that matter – practice it.

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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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With the clouds of recession in Australia now fading more PR Director’s and PR Manager’s seem to be deciding that its time to ramp up the public relations and communication effort.  As a consequence PR agency relationships are being put under the microscope resulting in an upsurge in PR agency reviews and selection processes.

Evidence comes from an increase in announcements by marketers of competitive PR agency pitches being planned or having taken place, and successful PR agencies issuing press releases about their wins.

But with the increased activity around PR agency reviews and selection processes, comes the inevitable grumbles. Whether it’s just from sore losers, or whether some of the practices employed in choosing a PR agency do genuinely leave a lot to be desired, it’s hard to tell.

Having spent 30 years on the PR agency side, and been through my share of pitches,  I’ve seen too much that has gone wrong. And because I strongly feel that much could be done to produce improved results for both the client and agency if more structure, process and commonsense were applied, PR agency selection is a service I’m now offering.

A lot of the gripes from PR agencies comes from the pitch process itself – and I will write about this at some point in the future. But I think as many frustrations arise in the first part of the process.

What my experience tells me is that many PR Directors and Managers, by treating the initial stages of a the pr agency selection process as more of an administrative chore, actually end up eliminating PR agencies that might actually be the best choice in the final analysis.

Some of the key factors that determine how you get the best short list to finally pitch include:

 
1. How you handle the incumbent PR agency.  If, as many organizations do, you aren’t up front with the incumbent and they suddenly find themselves in a competitive pitch with a group of pre-selected agencies it doesn’t send the right message to your future PR partner. If you treat your current PR agency this way, isn’t that a good indicator as to how they are likely to be treated once the honeymoon is over?

 
2. How you arrive at your initial list of PR agencies. The PR industry is diverse, especially in these days of specialisation. Yet how some organisations arrive at a list of PR agencies they want to hear from is not only frightening, but often incredibly hit and miss. A lot of time needs to go into this part of the process. Regretably often that doesn’t happen. So the process is flawed, and very restricted, right from the beginning. 

 
3. Your brief/RPF (request for proposal). It’s not easy to prepare a proper brief, but inadequate and poorly thought through briefs are probably the biggest complaint by PR agencies.  Too often organisations delegate the task to someone within the Department who has the time. But that’s normally a more junior person without the right experience for the task. The Brief or RFP is probably the single biggest factor in an organisation getting the PR agency that is the right fit for it.

 
4. Your qualifying pre-selection process. Too often a number of agencies are asked to provide a written credentials or capabilities submission and the decision as to who goes to the short-list and actual pitch is made solely on this without the opportunity for face-to-face contact. If the brief is inadequate then this process may result in the potential best agency being excluded because something has been excluded or misunderstood.  This is often the single biggest gripe and frustrations of agencies and it directly leads to bad decision making at this crucial preliminary phase of the PR selection process.

 
5. Management of the initial phase.  This is not a job for a junior or an administration person. It needs someone who is a PR decision maker who is going to be personally engaged with all those invited. From this group will come your eventual new PR agency partner. You want to create an environment that provides every opportunity for the right agency not to get lost or eliminated because of administrative procedures. So be connected, be available, and meet the agencies face-to-face. It’s worth the time commitment.

How organisations go about selecting a PR agency is changing. However, regrettably many of those involved in the PR agency selection process have little understanding of how agencies work. Too often, in my experience, the importance and relevance of this initial part of the process is completely under-estimated.

No related posts.

Australian organisations face challenges when undertaking a PR agency review or selecting a PR agency, but they certainly don’t need any help from the Australian Financial Review.

Amanda Meade who writes ‘The Diary’ in The Australian was right on the mark when she threw cold water on competitor The Australian Financial Review for allegedly conducting a web survey to rank PR firms and their operatives in the high profile M&A sector.

According to Meade the AFR was seeking to answer questions such as “Is it (the PR work done) effective from the client’s perspective?” “Is it worth the money?” “Who are the best practitioners?”

As well, individuals in PR agencies were allegedly being rated on a scale from “very effective” to ‘not effective”.

Now that I’ve left the PR agency field I can say what I am sure others think, but fear to say i.e. that the media would be about the least qualified of any body to make any evaluation of PR agencies.

Media view PR work, and PR operatives, through a very narrow (and biased) prism. And as for a journalist (or even an editor) undertaking a web survey – what they know about how to conduct a scientifically valid survey would probably fit onto a postage stamp (or part of one!).

Regrettably, if you are in PR you simply can’t say this – openly.

The media are very good at handing out the criticism. But they are not so good at accepting it.

Criticise them (especially publicly) and you not only risk offending the often very sensitive (some would say prima donna) souls; you run the risk of them using their power to subtly ‘withhold favours’. For PR agencies that rely on the media and in-house PR Directors who are charged with protecting the reputation of their organisations, that’s a risk that you can’t afford to take.

In this situation, assuming what Meade has reported about the AFR is correct, you see PR in action. What appears to have happened is that the AFR’s intentions have been anonymously leaked to Meade with the intention of having her discredit the AFR and kill the initiative.

For Meade it’s a good story. Even better is the chance to snipe at a competitor.  For the PR agencies who wanted the initiative killed they hope the result is ‘mission accomplished’– but without collateral damage.

The role of the media is to run stories and everyone reading them understands the limitations that are inherent in what is published. But undertake and publish the results of a web-based survey which purports to accurately reflect the views of those who participated? Methinks they’ve gone beyond their area of competence.

 
Disclosure: After 30 years in the PR business part of what I now do involves assisting organisations to identify and select PR agencies.

PS  If you are interested in this topic you might get some value from reading two articles from PR Influences:

1) How to Hire a PR Firm

2) Selecting a new PR agency – Best and Worst Practices

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News that LG Electronics Australia has shifted from one multi-national PR agency to another as part of an international re-alignment, apparently without a pitch from either of the agencies involved, or indeed any other local Australian PR agency, is a further signal as to how much PR in Australia is becoming driven by international factors.

Moves of this nature, as a consequence of ‘global decisions’, are not unusual in advertising. But this is a reminder as to how much PR is following in the advertising slipstream.

I’ve seen this move towards internationalism at first hand. During my last 10 years in the ‘agency world’ my agency was an independent that was able to ‘act local’ for several multi-national clients. But as the Australian associate of an Omnicom agency we were also at times the grateful recipient of international business that we won by overnight email, out-of-the-blue from New York or London.

Both worked – depending on the client.  But PR is not like advertising. Advertising is still about buying platforms and delivering consistent messages. PR, on the other hand is about developing relationships.

The former can be orchestrated from anywhere – and the buyer can be changed without too much disruption. The later need connected people on the ground, who are able to build and sustain long-term relationships. In the old adage’ think global, act local’ advertising is the former while PR is the later.

Most Australian PR Manager’s of multinationals that I’ve met have been sceptical, suspicious or resentful of the increasing multinational approach to PR. 

From my experience issues that arise to irk PR Managers include.

1. Relevancy.  What works in other countries is often not appropriate for Australia – and it can take a hell of a fight to be the exception. 
2. Budgets.  Local budgets are often not adequate to tackle the tasks that Head Office is implementing and wants its Australian operation to duplicate.
3. Endorsement. Local internal management can often have more of a sales perspective which can leave the PR people bereft of local endorsement.
4. Process.  Marching to the international drumbeat can result in a large proportion of scarce internal and local agency resources being chewed up in liaison and reporting with little left to actual implement the PR work!
5. Media. Trying to duplicate American and Asian media initiatives can be fraught with risk given Australian media that can be fiercely critical and frank at times.

There’s no point in shooting the messenger – the multinational PR agencies. Instead PR Manager’s need to be stronger and more proactive in protecting their patch and fighting for their independence (providing that they commit to following international policy and messaging).

One way is to bring more process and transparency into the PR agency selection process.

Too many Australian PR agency appointments are still made without a rigorous process. Multinationals would likely be less inclined to make arbitrary decisions in favour of multinational agencies if they knew that equal or superior local Australian PR agency talent was available – and their local PR Managers or Marketing Managers insisted on having a genuine competitive process.

LG has had its share of issues to handle in Australia and there have been some rumours that it hasn’t been the easiest client to work for. Nonetheless the agency on the way out -Burson-Marsteller -has done some major high profile work for LG and its likely that neither LG Electronics and  Burson-Marsteller locally are too happy with having the rug pulled out from under their feet.

The only one smiling will be those in WPP because the irony is that both the present and new PR agencies (part of Ogilvy) are owned by WPP. So it doesn’t matter one iota to them.

Welcome to the new world of international PR.

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