The level of strategic thinking PR agencies believe they provide to their corporate clients is out of whack with the amount of strategy companies think they're getting from
agencies, according to an exclusive study on agency-client relations conducted by the Counselors Academy on behalf of PR NEWS.
The study, which polled both Counselors Academy members and PR NEWS subscribers throughout a three-week period in April, left no stone unturned. It polled both sides of the
table on issues ranging from the growing demand among clients for 'spec' work to budgetary concerns to how what both sides can do to improve agency-client relations. (See tables
and charts.)
Although both parties see knowledge of the client's business goals as critical to PR success -- and are in sync regarding how they should measure performance -- agencies and
their clients run into problems with strategy versus tactics. While agency reps think it's about a 50-50 split, clients who were polled said they view the ratio as 70-30, in favor
of tactics. With "strategy" the favored mantra among corporate PR execs vis-a-vis professional services, PR agencies need to re-evaluate how they define the word as they move
forward.
"Clearly, we in the agency world are not doing enough with aligning our own definitions of strategy versus how the clients see strategy," says a manager of a mid-size PR
agency, who requested anonymity. "We need to get our act together, sit down with clients and get their perspective on how to better align our differences."
In an e-mail exchange, Janice Rotchstein, Chief Quality Officer at Edelman, said that too often agencies focus on the flavor of the month. "That micro vision addresses issues
threatening a program's success, but can't financially cover the bigger picture thinking clients want, need and have come to expect 24/7/365," she says.
For clients, a major sticking point on strategy is that once the heavyweights atop the agency win the business, the 12-year-olds take over. "We're seeing a lot of work being
pushed down to the junior level, and they are not the most strategic thinkers," says Ed Nicholson, director of media and communications at Tyson Foods and the chair of the
corporate section in the PRSA. But with PR budgets often the first to get yanked by a manager with an itchy finger, doing more with less will continue to be a problem for
agencies.
For their part, corporate clients have to learn to be more up-front about precisely what they want from their agencies. While they pine for matching pr to business goals, the
reality is that corporate pr execs continue to value quality of publicity placements above all else.
Though companies may be loosening their purse strings due to an improving economy, the specter of Sarbanes-Oxley and Reg-FD -- as well as ongoing efforts at corporate reform,
not to mention improving crisis communications -- means there will be a lot of caution in the field.
For agencies, "the game is changing," says Peter Debreceny, VP-Corporate Relations at Allstate (and an PR NEWS advisory board member). "They need more focused plans and a
higher degree of certainty on what they're doing for the client. More resources are going to be available but [companies] are going to be frugal about how they spend them."
Contacts: Peter Debreceny, 847.402.3111, [email protected]; Ed Nicholson, 479.290.4591, [email protected]; Janice Rotchstein, 212.704.8164, [email protected]
What Do CEOs Want?
Either in-house or as a client, getting the CEO to place as much value on PR as he does on, say, sales and marketing, is the Holy Grail for communications execs. But there are
miles to go before PR execs reach the summit. Next week's issue of PR NEWS (May 24) includes strategies that will help you get there and, perhaps in the process, convince CEOs
that they need to pay closer attention to PR.
Orlando Blooms
About 300 presidents of PR firms will gather in sunny Orlando, FL early this week for the Counselor Academy Spring Conference. Titled, 'The Power of Vision, the Art of
Leadership, the three-day powwow features numerous seminars revolving around how PR execs can play more of a leadership role for their firms and, perhaps more important, clients.
PR NEWS Editor Matthew Schwartz will introduce leadership guru Jim Kouzes, chairman-emeritus of the Tom Peters Company and best-selling author of "The Leadership Challenge"
(Jossey-Bass, 2002). The contents of this week's Counselors Academy/PR NEWS agency-client study will also be discussed. Look for a wrap-up of the conference in next week's issue
(May 24) of PR NEWS.
CHANGE IN PAY? Both PR agencies and their corporate clients prefer a monthly fee or retainer in terms of billing. But with corporate procurement officers starting to put the
squeeze on PR agencies, might hourly rates become more pronounced? Stay tuned.
|
How do you prefer to bill your clients?
|
|
|
|
Response Percent
|
| Hourly |
23.0%
|
| Monthly fee or Retainer |
50.6%
|
| Fee plus hourly |
9.2%
|
| Project basis |
4.6%
|
|
What percentage of your corporate clients ask you to work on spec when you are developing proposals for business or projects?
|
|
|
|
Response Percent
|
| Yes |
60%
|
| No |
44.4%
|
|
How do you prefer your public relations firm to bill you?
|
|
|
|
Response Percent
|
| Hourly |
12.8%
|
| Monthly fee or Retainer |
42.6%
|
| Fee plus hourly |
4.3%
|
| Project basis |
31.9%
|
|
Do you expect your PR agencies to work on spec when they are developing proposals for your business or projects? |
|
|
|
Response Percent
|
| Yes |
35.1%
|
| No |
48.1%
|
REALITY CHECK. The biggest disconnect found in the study was about strategy vs. tactics. While corporations view their agencies as giving very little strategy, agencies think
they are providing far more strategy than their clients think they are. Bridging the differences will be a long, hard slog. But both agencies and their clients have a few ideas on
how each side can improve the relationship.
|
Thinking about your client roster overall, what percentage ratio best describes the kind of services your agency contributes to your corporate clients communications |
|
|
|
Response Percent
|
| 90% Strategic / 10% Tactical |
2.3%
|
| 80% Strategic / 20% Tactical |
3.4%
|
| 70% Strategic / 30% Tactical |
11.5%
|
| 60% Strategic / 40% Tactical |
16.1%
|
| 50% Strategic / 50% Tactical |
28.7%
|
| 40% Strategic / 60% Tactical |
14.9%
|
| 30% Strategic / 70% Tactical |
17.2%
|
| 20% Strategic / 80% Tactical |
4.6%
|
| 10% Strategic / 90% Tactical |
1.1%
|
|
If you think the ratio should be different, what do you think it should be?
|
|
|
|
Response Percent
|
| 90% Strategic / 10% Tactical |
2.9%
|
| 80% Strategic / 20% Tactical |
11.6%
|
| 70% Strategic / 30% Tactical |
40.6%
|
| 60% Strategic / 40% Tactical |
11.6%
|
| 50% Strategic / 50% Tactical |
20.3%
|
| 40% Strategic / 60% Tactical |
7.2%
|
| 30% Strategic / 70% Tactical |
4.3%
|
| 20% Strategic / 80% Tactical |
1.4%
|
| 10% Strategic / 90% Tactical |
0%
|
|
Pick three that your clients overall could do more of in order to improve their relationship with your agency: |
|
|
|
Response Percent
|
| Give us a larger, more realistic budget |
40.2%
|
| Provide better access to upper-level executives |
36.8%
|
| Set clearer expectations for the measurement of results |
28.7%
|
|
What percentage ratio best describes the kind of services your PR agencies currently contribute to your communications programs?
|
|
|
|
Response Percent
|
| 90% Strategic / 10% Tactical |
4.2%
|
| 80% Strategic / 20% Tactical |
8.3%
|
| 70% Strategic / 30% Tactical |
8.3%
|
| 60% Strategic / 40% Tactical |
2.1%
|
| 50% Strategic / 50% Tactical |
6.2%
|
| 40% Strategic / 60% Tactical |
14.6%
|
| 30% Strategic / 70% Tactical |
27.1%
|
| 20% Strategic / 80% Tactical |
16.7%
|
| 10% Strategic / 90% Tactical |
12.5%
|
|
If you think the ratio should be different, what do you think it should be?
|
|
|
|
Response Percent
|
| 90% Strategic / 10% Tactical |
2.7%
|
| 80% Strategic / 20% Tactical |
2.7%
|
| 70% Strategic / 30% Tactical |
8.1%
|
| 60% Strategic / 40% Tactical |
21.6%
|
| 50% Strategic / 50% Tactical |
37.8%
|
| 40% Strategic / 60% Tactical |
16.2%
|
| 30% Strategic / 70% Tactical |
8.1%
|
| 20% Strategic / 80% Tactical |
2.7%
|
| 10% Strategic / 90% Tactical |
0%
|
|
Pick three that your agencies could do more of in order to improve their relationships with your enterprise:
|
|
|
|
Response Percent
|
| Make more of an effort to learn and understand our business |
39.1%
|
| Measure results in a more meaningful way |
34.8%
|
| Improve our organization's visibility and awareness |
32.6%
|
MEASURE FOR MEASURE. There's been enough wind on measurement lately to float a battleship to China. But with all the kibitzing on measurement vis-a-vis ad equivalency, share
of discussion and target audience versus total audience, it's (surprise) quality of publicity placements that both agencies and their clients devote the biggest piece of the
budget pie. The numbers below lend a little currency to some of the top corporate managers who, we're told, don't bother so much with measurement and prefer to "just get some
ink."
|
How much do you typically budget as a percentage of your corporate clients' communications programs for each of the following measurement methods? |
|
|
|
Response Percent
|
| Advertising equivalencies |
42.2%
|
| Behavior or attitude change measurement through formal research |
46.9%
|
| Brand message effectiveness |
42.2%
|
| Leads generated and closed |
32.8%
|
| Quality of publicity placements |
57.8%
|
| Reputation assessments |
48.4%
|
| Sales |
39.1%
|
| Share of discussion metrics |
23.4%
|
| Target audience versus total audience |
23.4%
|
| Other |
31.2%
|
|
For what measurement methods do clients give you a designated budget?
|
|
|
|
Response Percent
|
| Advertising equivalencies |
22.9%
|
| Behavior or attitude change measurement through formal research |
41.4%
|
| Brand message effectiveness |
21.4%
|
| Leads generated and closed |
18.6%
|
| Quality of publicity placements |
47.1%
|
| Reputation assessments |
28.6%
|
| Sales |
14.3%
|
| Stock price |
2.9%
|
| Share of discussion metrics |
5.7%
|
| Target audience versus total audience |
12.9%
|
| Other |
28.6%
|
|
What percentage of the following methods do you use to measure your communication results
|
|
|
|
Response Percent
|
| Quality of publicity placements |
88.4%
|
| Target audience reached versus total audience |
62.8%
|
| Brand message delivery |
69.8%
|
| Advertising equivalencies |
48.8%
|
| Behavior or attitude change measurement through formal research |
41.9%
|
| Share of discussion metrics |
25.6%
|
| Reputation assessments |
46.5%
|
| Sales |
41.9%
|
| Leads generated and closed |
41.9%
|
| Other |
20.9%
|
|
How much do you typically budget as a percentage of your communications programs for each of the following measurement methods?
|
|
|
|
Response Percent
|
| Advertising equivalencies |
57.6%
|
| Behavior or attitude change measurement through formal research |
42.4%
|
| Brand message delivery |
63.6%
|
| Leads generated and closed |
51.5%
|
| Quality of publicity placements |
78.8%
|
| Reputation assessments |
54.5%
|
| Sales |
39.4%
|
| Share of discussion metrics |
27.3%
|
| Target audience versus total audience |
48.5%
|
MAKE OR BREAK. The agency-client relationship has not been immune to the debate over in-house versus the outsource option, as the tables below show. For agencies, gauging
behavior through formal research was the biggest measurement method outsourced while an overwhelming majority of agencies keep the all-important publicity placements in-house.
Clients also keep the tracking of publicity placement close to the vest, but are lot less reluctant to outsource measurement methods -- like brand message delivery and
reputation assessments - than agencies (who don't have as much capital to outsource, of course). One of the more surprising elements of the study was just who on the corporate
side makes the decision when selecting a PR agency. About 55% of C-level respondents said they personally tap their PR agencies. It's important to note, however, that most of
these decisions are from small- to mid-size companies; in the bigger firms marketing managers usually make the call.
|
What measurement methods do you outsource versus those that you perform with account staff? |
|||
|
|
Outsource
|
In-House
|
N.A.
|
| Advertising equivalencies |
23%
|
51%
|
27%
|
| Behavior or attitude change measurement through formal research |
47%
|
26%
|
30%
|
| Brand message delivery |
24%
|
48%
|
35%
|
| Leads generated and closed |
16%
|
47%
|
39%
|
| Quality of publicity placements |
11%
|
79%
|
13%
|
| Reputation assessments |
31%
|
50%
|
25%
|
| Sales |
22%
|
39%
|
41%
|
| Share of discussion metrics |
13%
|
29%
|
60%
|
| Target audience versus total audience |
19%
|
32%
|
51%
|
|
When competing for a new account, who influences the decision in corporations?
|
|
|
|
Response Percent
|
| Primary client contact: Title & % |
73.1%
|
| Procurement or purchasing department |
29.5%
|
| Marketing department |
67.9%
|
| Corporate Communications department |
61.5%
|
| C-suite members (CEO, COO, CFO etc) |
79.5%
|
| Sales department |
21.8%
|
| Search consultant(s) |
19.2%
|
| Other |
15.4%
|
|
What measurement methods do you outsource and what methods do you retain in-house?
|
|||
|
|
Outsource
|
In-House
|
N.A.
|
| Advertising equivalencies |
45%
|
29%
|
29%
|
| Behavior or attitude change measurement through formal research |
49%
|
28%
|
33%
|
| Brand message delivery |
36%
|
70%
|
5%
|
| Leads generated and closed |
7%
|
63%
|
32%
|
| Quality of publicity placements |
35%
|
74%
|
2%
|
| Reputation assessments |
48%
|
26%
|
31%
|
| Sales |
3%
|
64%
|
36%
|
| Share of discussion metrics |
11%
|
34%
|
58%
|
| Target audience versus total audience |
24%
|
59%
|
27%
|
|
When selecting PR agencies, who influences the decision?
|
|
|
|
Response Percent
|
| I do : My Title & % |
76.6%
|
| Procurement or purchasing department |
12.8%
|
| Marketing department |
44.7%
|
| Corporate Communications department |
40.4%
|
| C-suite members (CEO, COO, CFO etc) |
55.3%
|
| Sales department |
12.8%
|
| Search consultant(s) |
12.8%
|
| Other |
23.4%
|
HELP ME HELP YOU. If there is one thing agencies and their clients can agree on, it's the importance both sides place on understanding business goals that can support
communication programs, even though there is a significant gap between agencies and companies on just how much strategy agencies provide.
That's well enough, but corporate execs apparently need to better articulate their demands and agency folk have to be more specific in the kinds of services they can bring to
the table - and just who in the firm will be doing the work. The reason? Just 25% of agency execs responding to the study said they were "very involved" in helping clients decide
the business goals that can a support the PR campaign while more than half said they were somewhat involved. And "somewhat" isn't a great harbinger for relationships that can
last.
|
In relation to what you do for your corporate clients, please rate how important you believe it is for your agency to understand, in detail, the business goals that support |
|
|
|
Response Percent
|
| Very Important |
96.5%
|
| Somewhat Important |
3.5%
|
| Not too Important |
0%
|
| Not at all Important |
0%
|
|
How involved is your agency in helping your clients research, discuss and decide the business goals that support their communications programs?
|
|
|
|
Response Percent
|
| Very Involved |
25.3%
|
| Somewhat Involved |
55.2%
|
| Not too Involved |
19.5%
|
| Not at all Involved |
0%
|
|
In measuring your agency's performance, which of the following services do you think are the most important?
|
|
|
|
Response Percent
|
| Creative Services (design/production of materials) |
21.8%
|
| Crisis Communications |
25.3%
|
| Financial Relations |
4.6%
|
| Investor Relations |
4.6%
|
| Issues Management |
28.7%
|
| Messaging |
57.5%
|
| Positioning |
46%
|
| Publicity & Media Relations |
63.2%
|
| Sales & Marketing Support |
33.3%
|
| Other |
12.6%
|
|
Which of the following services should be the most important to your corporate clients?
|
|
|
|
Response Percent
|
| Creative Services (design/production of materials) |
16.1%
|
| Crisis Communications |
14.9%
|
| Financial Relations |
4.6%
|
| Investor Relations |
4.6%
|
| Issues Management |
37.9%
|
| Messaging |
58.6%
|
| Positioning |
60.9%
|
| Publicity & Media Relations |
55.2%
|
| Sales & Marketing Support |
18.4%
|
| Other |
18.4%
|
|
In relation to what they do for you, please rate how important you believe it is for your agencies to understand, in detail, the business goals that your communication programs
support. |
|
|
|
Response Percent
|
| Very Important |
91.5%
|
| Somewhat Important |
8.5%
|
| Not too Important |
0%
|
| Not at all Important |
0%
|
|
In measuring your agencies' performance, which of the following services are the most important to you?
|
|
|
|
Response Percent
|
| Creative Services (design/production of materials) |
23.4%
|
| Crisis Communications |
23.4%
|
| Financial Relations |
2.1%
|
| Investor Relations |
2.1%
|
| Issues Management |
27.7%
|
| Messaging |
61.7%
|
| Positioning |
57.4%
|
| Publicity & Media Relations |
74.5%
|
| Sales & Marketing Support |
17%
|
| Other |
4.3%
|