Most of those in the over-50 crowd remember a movie called “Wall Street.” The main character is played by Michael Douglas, and he exclaims what became a famous line back then in describing the attitude of those in finance, “Greed is good.”
If Hollywood were to create a movie called “PR Street” with Michael Douglas, he would declare “Chaos is good.”
Because part of the role of communications, particularly in the tech sector, is helping the outside world make sense of complexity and eliminate confusion. Inevitably, chaos generates the very complexity and confusion that we help our clients or companies address.
Exacerbating the chaos, who does what is up for grabs.
A few year ago, Fortune Magazine hatched a product called TOC (trusted original content).
For a price point that starts around $250K, Fortune would write stories for a company’s owned media channels. You can think of Fortune as jumping into the content development biz.
I suppose the price premium comes from the assumed halo that will follow the Fortune content. But Fortune’s plan wasn’t to deploy its own staff for this dirty work. The plan called for aggregating the horsepower of freelance journalists — no, make that “trusted” freelancers (need to stay true to the brand) — to produce this content. You end up with a value proposition that goes something along the lines of Fortune will deliver high-quality content to your owned media channels by managing a stable of freelance journalists. By applying the same Fortune expertise for guiding and editing compelling narratives, Fortune ensures industrial-grade stories … even though the writing is not done by the Fortune staff.
You have to give Fortune credit for chutzpah in the search for new revenue streams. Even at the low end, $250K buys a lot of freelance stories on the open market. The point is, publications such as Fortune and others with content development teams such as Business Insider and even The New York Times now quasi compete against PR consultancies.
And look at what PR consultancies are doing today. Media relations is merely one of numerous spokes feeding into integration campaigns that reflect a holistic approach to communications (i.e., earned, owned and paid media). This means going all-in on content development as well as making sure that content — narratives that include visual storytelling which begets art departments — reaches the intended audiences.
We continue to call ourselves a “PR agency” for fear of missing RFPs categorized as PR. But the reality is that we and many of our competitors are better described as communication consultancies.
Moving along to the next layer, we’ve witnessed a parade of announcements under the overall communications banner, some of the shocking variety.
Burson and Cohn & Wolfe get squished together. Omnicom, WPP and Publicis seemingly play nice to create a new agency to serve P&G (huge consumer brand). WPP shoves Martin Sorrell out the door. All of the huge holding companies are struggling to perform financially.
It’s not an anomaly that the Independents have outperformed mega shops for the past several years. As a matter of fact, in 2017 the top 10 PR agencies grew 0.9 percent compared to the Indies growing 8.8 percent.
Look, someone could write a book analyzing this situation as well as others. From my perspective, they offer proof points showing that bigger isn’t better (said the guy who stands 5 foot 4).
If you took all the organizations in the world that buy communication services, I believe over 90 percent of the budgets are less than US$30K per month. Even at the high watermark of US$30K per month, that’s typically a four- to six-person account team. I’ll take our six-person account team against a mega shop’s counterpart any time. The mega shops often hire good people. No, I don’t have my fingers crossed behind my back. I mean this. The challenge lies in the mega shop’s infrastructure, processes and culture all hyper-tuned to squeeze out another dollar of profitability that prevents talented people from delivering good work.
A few weeks ago I met with a friend and colleague Michael Young, CEO of Millwright Holdings, who predicted that we would look back on this period of time as “the age of the Independent.” I think he’s right.
And there’s plenty of chaos on the road to this description, and that’s a good thing.