October 24, 2011

PR Agency Re-Invention: Having the Billable Hour and Innovating Too

My last story was prompted by recent articles that compared ad agencies with tech startups. In this follow-up, I try to answer the question that I left off with in the last piece: Can PR agencies adapt to changing times without dooming the profession to the fate of the Innovator's Dilemma, i.e., creative destruction and obsolescence of older models?

I contend that not only can we, but that many in our field have – and that we should continue to do so. We can have our billable hour yet also exploit new opportunities in the marketplace — launch software, Web-related services, and monetize content too.

The Agency's Enduring (and Changing) Role

One thing that the articles agree on is the vital role that agencies continue to play.

In Why Agencies Should NOT Act More Like Startups, MediaPost's Matt Strasz says: Marketers long ago accepted that it's not possible to have all the necessary expertise in-house …. Agencies are more important than ever. Even the article How Ad Agencies Can Act more like Tech Start-ups, from Fast Company, alludes to the important role of an agency: Powerful, nuanced storytelling…-communications strong enough to influence people's habits, well, this simply won't ever be automated. And it's here that creative agencies are irreplaceable.

However, it was the last story that argued for change and innovation, and challenged agencies to be more like startups, while maintaining that traditional agency models are at odds with this goal.

There is no question that changing times have caused some to question the PR agency's role and its future. The rise of social media, and explosion of content and news choices have diminished the value of the earned media hit and opened the door for many to communicate directly with their customers.

How can we continue to stay relevant and adapt to changing times? Does the PR field need to completely reinvent the agency model and become more like a tech startup?

The Innovation Imperative

In the Fast Company article, Adam Glickman argued that agencies focus on advancing client marketing objectives rather than their own. It may be true that many PR shops are often like the proverbial cobbler's kids who don't have shoes, when it comes to our own marketing. Yet, if you believe the old truism that business opportunities exist around the edges of change, then there has never been a better time to innovate.

There's been much debate about what types of agencies will win the social media "prize." Some have said that it is PR's race to lose, and indeed more and more PR agencies are helping clients with these types of programs; however the contest isn't over yet, and we will lose if we cling to old ways.

Modes of Innovation

Another point made in the Fast Company article is that the monthly retainer encourages bureaucracy and is at odds with the startup ethos, which is more about efficiency and automation. The implication is that the traditional agency model, in which we bill for time, inhibits innovation.

I would argue that, while agencies may be forced to eat some of the extra time inherent in trying new things, it is in the client's interest for agencies to stay on the cutting edge — and the agency's responsibility to lead the client in terms of outlining new metrics and methods.

Better agencies have already done this. They woke up early to the power of social media and factored blogs into the media mix, for example; they made sure that clients understood the new rules of engagement. Many have helped clients up their games in terms of improving quality of content and sharpened pencils when it comes to approaching influencers, jettisoning annoying habits like pitch Spam.

Agencies are innovating all the time, and some are completely reinventing themselves and/or their services.

Redefining PR: Its Scope and Objectives

One of the reasons for the debate about social media ownership is that it can touch many areas — communications, sure, but also marketing, sales and customer service too. It can bring PR into closer partnership with areas like content marketing and SEO. While this takes many of us out of our comfort zones, forward thinking agencies view it as an opportunity to play a greater role, i.e. to become more measurable and a profit center.

Changing doesn't mean we should just apply the same old PR methods to new paradigms — it means taking a fresh look at everything we do.

Putting Technology to work

Social media is but one example of tech-driven change that impacts PR. The growth of apps, tablets and mobile platforms, is another. Does the influence of technology mean that agencies need to become developers too? The Fast Company article said that there's no reason that an agency couldn't develop something like Four Square. Is there a way to leverage technology without becoming a software company (or launching one)?

PR agencies have a long history of using technology to address clients' needs. We use all types of research databases and Web tools. More and more are working with the growing number of solutions that assist with social media monitoring, management, content curation and publishing.

We can leverage technology without becoming software startups by doing more to become implementers of technology. With the agency world's reach into the marketplace, and the proficiency that many are gaining, is it that much of a stretch for agencies to become valued added resellers (VARs) for these types of solutions?

Some already are, and in doing so driving need for more professional services and creating new revenue streams from software subscriptions.

Conclusion

Reading the above-mentioned articles made me feel a little nostalgic as they brought me back to the time of only a few years ago of when there was much talk about the death of PR.

Although I did not agree with every aspect of the articles, I think it is a great discussion to have. The tech startup serves as a good metaphor for innovation. Clearly, our field needs to continue to change, adapt and grow. I hope I have made the case that it is possible to innovate without making the PR agency model obsolete.

Follow Bob on his blog Flack's Revenge.