Bodybuilding pioneer Joe Gold, who died in July at the age of 82, was a big believer in growing his business through word of mouth -- what's now called "viral marketing." After
all, it was an up-and-coming bodybuilder named Arnold Schwarzenegger - well before Hollywood and politics beckoned - who helped to put Gold's Gym on the map not long after it
opened in 1965.
Gold sold the rights to the Gold name in 1971, and the new owners franchised the name into a health- club empire that now has more than 550 facilities in 25 countries, with 2.5
million members. And throughout the years Gold's Gym International, currently owned by TRT Holdings, consistently has made sure to include PR in the health-club chain's DNA.
So, when Gold's switched PR agencies in May 2003 - severing ties with Fleishman-Hillard and hiring Phoenix-based PR firm Riester~Robb -- the company wanted another "valuable
marketing partner" or, technically, an Agency of Record (AOR), said Derek Barton, senior VP/marketing at Gold's. "We wanted a very reputable PR company because mainstream America
trusts PR more than it does an ad."
Tim Riester, president of Riester~Robb, said that being an AOR makes a huge difference in agency-client relations. "When you're working on a [sole] project, you have to sell
the client on an idea, [whereas] being an AOR is having a true partnership that allows us to sit in on meetings with senior management -- and national and international committees
-- in order to track the company's entire marketing plan."
Riester~Robb quickly showed a knack for the kind of PR that gets Gold's pumped. In fall 2003, Barton got wind that a member of the "Dr. Phil" TV crew worked out at a Gold's
facility. He passed that information along to Riester, who then pitched the syndicated TV show on a partnership. The result: A nine-month program (September 2003 through June
2004) called the "Dr. Phil Weight Loss Challenge." Every day, for nine months, Dr. Phil encouraged his entire audience to go to their local Gold's Gym, and offered a free two-week
membership to Gold's to anyone watching the show (13 viewers ended up participating).
You couldn't watch the show during the nine-month period without seeing Gold's logo and appearances by Gold's trainers. "That was more than $2 million in ad equivalency for
Gold's," Barton said.
Awarding PR agencies the AOR moniker is nothing new. But in the last few years, as corporations have shifted the emphasis to reputation management from branding -- a result of
the rash of corporate scandals and increasing government regulations a la Sarbanes-Oxley -- the trend has picked up speed. Neither the Public Relations Society of America nor the
Council of PR Firms tracks the number of PR agencies that are AORs, so it is difficult to determine the rate of growth. Still, observers say the trend is accelerating.
"Corporations need to do a better job of managing their reputations and relationships, and that's driven by PR," said Tom Reno, executive VP/general manager in the New York
office of Hill & Knowlton. Naming a PR agency an AOR "is a way to deepen the relationship" between agencies and their clients. But Reno, who has worked on the client side in
the investment-banking and healthcare sectors, stressed that becoming an AOR doesn't afford you special status in the eyes of corporate PR execs.
"Being an AOR opens up the access," he said, "but that access is only going to open up if you can show talent, knowledge about the [respective] business and
responsiveness."
Although it may help agencies reps to generate new business when they can plug their AOR accounts, agencies must be careful not to grab the AOR designation just for the sake of
doing so. "We prefer taking on an AOR account when it works for us and if we have a base of knowledge in the country" the product or service is originating from, said Kristi
Hedges, co-founder and principal of The SheaHedges Group, a McLean, Va.-based PR agency specializing in technology that is the AOR for most of its clients, including Advancis
Pharmaceutical Corp., Arlington County Economic Development and InphoMatch.
Hedges said there are three distinct benefits of being named an AOR:
- Increased access to senior managers and the CEO that, in theory, creates a more strategically based relationship between the agency and client.
- Exposure, on an ongoing basis, to the company's overall goals along with constant communications between agency reps and corporate counterparts.
- Getting work done faster and more efficiently because naming an AOR is designed to cease all the "stops and starts" that tend to muddy the waters.
Yet being named an AOR doesn't make your firm the BMOC (Big Man on Campus) in the marketing mix. To the contrary, few corporations stick all their PR eggs into one basket. So
it's likely that even though one agency may be responsible for overall communications, it will have to work directly with other PR agencies - and vice versa. "You have to serve
the client and not jockey for position," Hedges said. "You have to know what you're doing as an AOR, what the other agencies are responsible for and what the operating structure
is."
There are potential drawbacks to being an AOR, too, mainly what happens when there is a regime change and the new managers consider altering PR. "They may want to bring in
their cronies and set you up for a fall," said Len Abbazia, VP for client services at Springboard Public Relations (Marlboro, N.J.), which recently was named the AOR for ATEN
Technology. "But you have to go for the stability angle. Don't be bashful about dealing with the new CEO and accelerate the PR initiatives."
Contacts: Len Abbazia, 732.863.1900 x101; Derek Barton, 310.392.3005, [email protected]; Kristi Hedges, 703.287.7811, [email protected]; Tom Reno, 212.885.0383, [email protected]; Tim
Riester, 602.462.2261, [email protected]