Which PR Firms Are The Road Runners?
Luca Penati from Ogilvy left aninteresting comment on my Wiley E Coyote post about PR firms running on thin air--http://www.siliconvalleywatcher.com/mt/archives/2007/10/wily_e_coyote_p.php">doing PR-as-usual and not noticing their world has changed drastically. As it has for media.
Luca Penati writes:
<blockquote>I think saying that most PR agencies do not get social media is wrong. Social media is new way to engage in conversations with stakeholders. Some agencies and companies mastered this before others, but the key thing to understand is that it has to be embedded in everything we do, and not seen as a separate discipline.
And engaging in conversations with stakeholders is what we have been doing all along.
We are not the coyote. We are the road runner.</blockquote>
Luca is right, there is some excellent work going on within the PR industry in using the new media technologies to build online communities, and to improve communications between companies and their customers.
Such efforts are very effective if done right. They create tremendous value for clients in many ways.
But there is a massive amount of work still being done around traditional PR. This is an expensive way to reach the same basic goals: improve sales and improve brand perception.
As more companies realize they can get more bang for their buck with new media PR strategies, they will pull more of their money from doing PR the old way. And that's when revenues for PR firms will fall.
And why wouldn't that happen? The new media approaches work tremendously well. And they don't cost as much.
I already come across companies that spend tiny sums on conventional PR services and they have been very successful in building their businesses through non-traditional approaches. This is a growing trend. It is not a fad.
I disagree that some PR firms have already mastered the new changes.
We are all at such an early stage in all of this. Technologies such as RSS, CSS, and XML are simple yet incredible powerful media technologies that can be used to publish unique types of media formats, and publish the activities of interactive online communites. RSS should stand for "Relationships Simply Syndicated."
We don't yet know all the things we can create with these technologies, which is great. Because we can all have a hand in creating the future. The changes the PR industry still has yet to go through are similar to the changes that media companies are going through now.
The media business model is being hacked off at the knees or rather the neck.
Established media companies are continuing to lose revenues because of a plethora of new media sites. Those online publishers can offer cheaper advertising, better conversion--plus a ton of free additional metric data compared with traditional advertising. Traditional advertising cannot compete.
Similarly, PR firms will lose revenues because of new media approaches to creating the same basic value: improving sales and improving brand perception.
Yes, Ogilvy is doing some interesting work in new media areas, others are too. I don't have the figures, but I bet that the new media work accounts for a small fraction of overall PR industry revenues.
Not much incentive to change
There isn't much to be gained for PR firms to push new media approaches because it would lower revenues. Except if it is offered as an additional service, which is how it is being sold these days. Much of the PR industry is telling clients to use a dual approach, strap a new media strategy onto a traditional approach.
The PR firms that win will be the ones that kill most of their traditional PR approaches and advocate a new media approach because it is more effective and has a lower cost. That's a hugely disruptive change and it has yet to play out.
It is clear that some PR firms will emerge as Road Runners while others will remain behind as road kill :-)