During this time of recession it seems that many large companies are taking their PR business elsewhere, to smaller agencies that have a lower price tag, but still deliver a quality service. This new phenomenon might just be a consequence of the economic downturn, but at the same time, we might also be in the midst of a new PR trend.
Mobile network giant Vodafone recently signed over all its accounts to Paratus, a ten-person agency that was selected after a competitive pitch from other larger agencies. Similarly Symantec, the largest maker of personal computer security software, hired Speed Communications in August to handle its six-figure corporate and enterprise PR brief for the UK and Ireland. And finally McCain Foods, the world’s largest producer of frozen-foods, signed Pitch PR in June to promote its sponsorship of UK Athletics. All these companies had the option to go with a larger agency but in the end chose the smaller firms. Just what is making small firms so appealing in comparison to large agencies and why are companies making the sudden switch?
When you typically think of a PR agency, you think of posh offices, attractive socializing females, schmoozing clients over lunches, often unnecessary extravagance, over the top and pulls out all the stops to impress its clients. All great, but the bells and whistles have to be paid for by someone – and that’s often client budgets or higher fees.
A handful of the top PR agencies grossed more than £130 billion globally in 2001. Impressive, yes, but in the end it’s the client who ends up paying more for all the extra, lavish, amenities and in a time when money is tight, finding the PR agency with the most economic benefit is a must for companies.
Naturally larger agencies also pride themselves on their ability to provide media relations, lobbying, event management, social media and other PR practice areas for companies, to make up their "integrated communications services" for their clients – but smaller companies are also offering all these services.
“Boutique” agencies are smaller and are typically less expensive for clients. Often they have a more detailed focus and expertise in certain industries and this business model seems to be thriving. These agencies are beginning to compete with large PR firms because they offer attractive budgeting options. New technologies have made the PR process so much more efficient that small companies can conduct PR just as well as large agencies – the Internet; customer relationship management systems; online media monitoring; cheaper, easy to use, high quality audio and video production tools; web design – all services now provided within small agency walls.
David Watson, senior Vice President of PR Boutiques International said in a letter to PR Week, “Importantly, it has never been easier to outsource non-core activity and plug into global markets through online communications and networking. Boutique PR firms are managed with the same rigour as big companies, and are succeeding worldwide.”
But even the “boutique” label for smaller agencies is just a fancy way of saying what they really are: a smaller company providing the same public relations services for companies wanting to gain publicity, build an image and be perceived positively in the public arena. Why not be proud of being a “small agency,” offering more cost effective, high quality PR services without making us sound like some sort of fashion house.
The primary driver for Symantec Corporation’s Dominic Cook is the flexibility offered by small agencies. “For those of us in-house relying heavily on external agency support, one of the key drivers in agency selection, particularly in tight budgetary conditions, is flexibility. The flexibility to move budgets around, to increase or decrease focus on social media or another piece of the PR puzzle, is vital and unfortunately many of the larger agencies find this difficult to cope with,” he says.
Companies may be turning to small agencies because they recognise they value the practitioners’ proficiency, flexibility and lower fees – rather than the unnecessary perks.
John Brice of the small U.S. based agency, Brice & Associates said, “Like doctors, lawyers, accountants and electricians, one good PR practitioner can get the job done well and generally do so at a more cost-effective price. A small agency can convene substantial marketing expertise as needed and not have to pass along any overhead to the client.” Flexible budgeting options and their deviation from the ‘typical’ PR agency traits may prove that these small agencies might just be the public relations industry’s new trend.
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