The Agency Revolution: Get On Board, Or Be Tossed Over Board

The current business environment's impact on corporate communications is obvious, prompting an impetus for communications executives to integrate their function into the overall business strategy to definitively contribute to bottomline business results. But what of the agencies? Against this tumultuous business backdrop, a number of agencies have chosen to actively evolve their offerings to meet a diverse set of client needs, but there are still those that resist change - or at least don't know how to implement it. So, the crucial question is this: How can (and must) an agency evolve to survive today, and to prosper tomorrow? There is no silver bullet answer, but a compilation of best practices and integrated offerings can transform an anachronistic PR shop from a roster of implementers to an army of strategists. Best Practice 1: Replace "practitioners" with "consultants." The aforementioned challenges faced by businesses today create unprecedented opportunities for communicators to leverage their skill sets and elevate themselves from tactical employees to valued consultants. But consider the competition: In the economic boom of the late 90s, PR shops went on a shopping spree, hiring new (and expensive) talent like it was going out of style. Then 9/11 and the dot-com bust crippled businesses that had, mere weeks earlier, been fat and happy. PR executives responded to the financial hit accordingly, firing their most expensive assets (senior people) and running a business on cheap(er) yet efficient junior staffers. The McKinseys and Bains of the world saw the gaping hole left by the void of senior talent and stepped on PR's sneakers with their custom-made Italian loafers; they began to offer clients strategic counseling that fell within communications' parameters, and PR was thus commoditized, left only with the tactical jobs (writing press releases, planning events) executed by junior staffers. Now, PR agencies are feeling the backlash. If they remain commoditized, their work will be relegated to that of implementers; however, integrated marketing communications and new technologies enable PR agency executives to step up their offerings to those of more strategic counselors. "There are some firms that are at the forefront of executive counseling, and others that are still mired in traditional PR definitions and solutions," says Eric Morgenstern, president and CEO of Morningstar Communications. "From the agency point of view, you have to reposition to transcend traditional public relations. Meeting business goals is what puts food on the table. PR practitioners have to understand business goals and find ways to achieve them through strategic planning, message platforms and sales-force enhancements." Tom Amberg, president and CEO of Cushman/Amberg Communications, agrees, urging agency executives to shift into the mindset of a counselor. It's more valuable to both sides and, last time we checked, consultants get paid more. Best Practice 2: Don't reinvent yourself when you are doing poorly. It may be human nature to assume failure is a reason to change, but there is a much higher risk of reinventing oneself during a time of poor financial performance. "Most businesses don't reinvent themselves when they're doing great," Morgenstern says. "That's the problem. They should always think about doing better." A steady evolution to meet clients' changing needs is far more economical than a haphazard makeover when you're under the gun. Best Practice 3: Show them the money. If clients are looking for full-service communications consultants rather than practitioners, remember: Your agency is not a gas station. Sending the lowest man on the totem pole out to handle client work on a day-to-day business only reinforces PR's reputations as tactical "hired help." They don't want to see a bill comprised of thousands of dollars of AAEs' work writing a press release - forget those days ever existed. "Our industry and the way we serve our clients is completely backwards," says Ed Moed, co-founder and managing partner of Peppercom. "The traditional pyramid model is having a few senior people at the top who do some semblance of consulting, management and accountability work, but they're not in the trenches on a day-to-day basis." Moed, who has drastically reorganized his firms' operations to deliver on clients' needs, condemns founding your firm on strategy up front and then implementation the rest of the way. "There needs to be more mid-and senior-level managers on a day-to-day basis in this Web 2.0 world," he says. "If you don't shift that mindset, you're never going to evolve; mid-and junior-level people are the ones dealing with clients 90% of the time. It can't work like that anymore." Best practice 4: When focusing 100% of your energy on your clients, don't overlook yourself. Moed quotes Steve Cody, fellow managing partner and co-founder of Peppercom, when he says, "You have to treat your agency like your most important client." Best practice 5: Take creative outside the box. With buzz words and concepts like innovation and integrated marketing, "creative" and "big ideas" have become the agency-client conversation's sexy new dialect. But do firms ever not think creatively? Do senior managers call a creative meeting one day and a boring, mundane meeting the next? Why is "creative" often relegated to its own department? And, would you ever approach a big-money client with a "small idea" unless he/she specifically requested a big one? Hopefully not. Then why are these terms so imbedded into segmented thinking? Questions abound, so here are some answers. Creativity must be integrated into the agency culture. (See sidebar for tips on how to do so.) Calling in the "creative" guy only when you have a "creative" problem tells your people that you only see the need for creative solutions on a case-by-case basis. Rather, you must foster a culture that is saturated with creative thinking. Moed offers a few examples of ways in which Peppercom makes creativity the focal point of the agency: Simulated networking cocktail receptions: The idea is to create a simulated networking session where your junior people are "you" (the rainmakers, the ones who are trying to bring in business) and "you" are the client. The junior staff members have a limited amount of time to try to get "your" business by offering irresistible, creative pitches for each "initiative." Not only does it train employees on how to interact with clients, but it puts them in a position where creative thinking is a must. Dream days: Inspired by Google, Moed and his team host structured dream days once a quarter, where every single employee has carte blanche to imagine the challenges of today and tomorrow, and throw out possible solutions. Nothing is too far-fetched, and great ideas have been born in such a setting. Case in point: Because of an idea generated during a "dream day," Peppercom now outsources its clipping and media analysis services to its London office because it opens five hours earlier, so clients have information waiting for them when the arrive to work in the morning. Best practice 6: Take risks and reward mistakes (well, sort of). Many agencies are currently operating like someone learning to drive a stick-shift car for the first time. You are presented with a very daunting problem: a business environment that is all uphill, and, when you take your foot off the break, you just roll backwards uncontrollably. You are flustered, panicked and self-conscious, especially as traffic backs up behind you and other cars (or your competition) breeze by. So you have to take a risk: Release the clutch (slowly, very slowly), press in the gas (gently) and hope to high-heaven you are going to start moving in the right direction. You have to go all-out, or you will crash and burn. But, once you are in first gear (the transition is bumpy and maybe you stall a few times), it's smooth sailing. (For those of you who attended the Counselors Academy Spring Meeting last week in Cabos, Mexico, you will appreciate the metaphor. For those who didn't, call PR News Editor Courtney Barnes at 212.621.4986 for the full story behind the story.) Moed offers the direct communications implication: "[Peppercom's] culture is based on risk-taking. You have to create risks to create solutions and strategies, but first you have to understand the pain around the problem. If you don't understand the pain-point - that is, the problem - then you can't offer a creative solution." He emphasizes the importance of encouraging risks and not reprimanding those who take them and fail. Talk only about lessons learned and move on. "The hardest thing to do is stay the course," he says. "You have to go all the way all the time, not just when it's convenient." It's true for stick-shift driving as well: If you don't stay the course, you'll end up backing into a cactus. CONTACTS: Eric Morgenstern,; Ed Moed,; Tom Amberg, How To Integrate Creativity Into Your Firm's Culture 1. Eliminate boundaries on thinking. Set strategy, then start outside the circle of possibility (encompassing client expectations, budget, etc.) and compromise inward rather than starting in the center and working outward. 2. Create brand platforms on which multichannel communications platforms grow. 3. Own it yourself or offer to work with your clients' other agencies to integrate strategy through all communications. 4. Hire new perspectives and leverage them. (For example, Peppercom hired a cultural anthropologist to add a completely different perspective to its team.) 5. Stop asking the recent college graduates to begin by pulling media lists. They understand digital communications better than anyone, and they have a whole new definition of creative thinking. 6. Make strong research, smart strategy and well-conceived execution the foundation of every idea. Source: These tips were provided by Cathy Austin, partner and SVP of Imre Communications. She can be reached at

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