The Ethical Optimist

We’ve been in numerous business pitches lately, and many of them have left me wondering if we — as an industry — should be taking a look at how we structure the traditional agency model. Time and again, I speak to prospects who have similar complaints…most grounded in billing issues and structured rates that keep them from accessing an agency’s top talent, forcing them to deal with junior professionals. Dealing with this level of staff is one of the reasons clients often feel PR people are not good business people…they’re not dealing with top managers who tend to be more business savvy.

This is a form of the “bait and switch” mentality routinely practiced at many agencies. Bring in the big guns to show you have the expertise to handle an account, but once you land it, be sure to staff it with juniors so you’re making your margins. After all, when your owned by a holding company you better be able to show profitability of you’ll soon be out of a job.

This, combined with obscene salaries and billing rates for a top layer of management, pushes work down to the lowest common denominator and hurts clients and the industry’s overall reputation and credibility. It doesn’t do much to help develop talent either, since it tends to burn out some of our younger, up-and-coming professionals who wind up leaving the field for more lucrative, and saner work.

So, why hasn’t it changed? Perhaps it is changing. The business we’re pitching and winning is coming at the expense of larger firms. At last year’s Counselors Academy Conference, one of the most popular breakout sessions was titled, “Small is the new big,” and anecdotally it certainly seems to be moving in that direction.

I believe this is a result of several factors. With the advent of new technologies smaller firms are able to compete with larger firms … the ability to do more with less has evened the playing field a bit. Excellent talent is now available in smaller markets thanks to the expanding pool of educational institutions that offer a PR curriculum, which is fueling firms outside the traditional big markets (NY, Chicago, SF). These firms can offer identical services with far less overhead. Talent is also just a click away, which allows smaller firms to access bigger minds on an as-needed basis.

Many boutique and mid-sized firms can also offer more creativity and flexibility on fees because they have the luxury of answering to their clients and themselves, not an overlord.

While large, multi-national organizations will always need large, multi-national firms, there are a great many companies that fall just below that criteria and that are looking for new, more competitive options. I believe that those firms that are able to break away from the traditional mold have a tremendous opportunity to seize business in today’s growing market.