PR Strategies for Recession, RecoveryAs businesses cut their advertising budgets, they have started to rely more on public relations to drive sales, forge partnerships, attract investors and build brands. At the same time, many trade and business-to-business publications have downsized or folded because of lost advertising revenue, resulting in less overall editorial space. This means that competition for media coverage and product reviews has intensified.
Many businesses still pay the price for following bad counsel and strategic planning during the tech gold rush. Using a rationale that paralleled the old adage, "nobody ever got fired for picking IBM," companies were often advised by venture capitalists and investors to retain a large, "brand name" public relations agency with a posh downtown address.
While entrepreneurs and venture capitalists vaguely understood that a strong marketing communications and public relations campaign is essential, too many were ignorant when it came to deciding how to select the right agency to help maximize the return on this investment. There was no emphasis on value. These agencies often came with a premium price and inexperienced junior staffs that were not well suited for business-to-business media relations. It takes a seasoned veteran to merge media relations skills with business and life experience.
Despite the current economy, many companies are seeing the market bottom out. As they move toward recovery, companies still cutting back or just starting to rebuild their marketing communications efforts have begun looking outside the box for better value from public relations and other marketing communications services. They are learning that they can get more for less.
As funding dried up, companies cut their public relations and marketing communications budgets. They are becoming smarter buyers of marketing communications services, and are skeptical when those public relations agencies that once commanded a monthly retainer of $30,000 are suddenly offering fire sale prices for their services.
Despite the drop in agency rates, businesses are finding that many BTB public relations agencies still insist upon selling more services than necessary and often require overinflated retainers. Their services are not affordable to a pared marketing communications budget, especially when a company is simply looking to maintain visibility or bolster its own efforts.
Whether downsizing or ramping up responsibly, economically astute companies have started outsourcing marketing communications to providers that can pick up the slack and provide services on a smaller, flexible scale, often on a project basis. Smaller ("boutique") agencies, virtual public relations teams and individual practitioners are a growing alternative for companies of all sizes, particularly those with monthly marketing communications budgets less than $10,000. These outsources have to work smarter, faster and cheaper to compete.
Working on a project basis often clashes with the business model of a large agency. Offices with skyline views (and empty cubicles thanks to downsizing), salaries, benefits and equipment are all overhead costs that must be passed along to the client. Large agencies need steady retainers to ensure financial goals and obligations are met. They may offer prestigious addresses and a recognizable CEO, but the day-to-day contact performing the actual account work tends to be inexperienced. Is retaining the services of a large agency really a prudent investment?
In adapting to market changes, alternative marketing communications providers find ways to profitably service businesses and produce results. Embracing the free agent economy, senior marketing communications experts living in the suburbs (for better schools and affordable housing) are starting to "just say no" to the commute. They are departing downtown agencies (or being downsized in favor of cheaper, junior staff) to work for their own clients and smaller agencies closer to home. This is creating more affordable, project-based public relations/marketing communications options for companies with refined, controlled budgets.
For many clients, outsourced and project-based marketing communications have an economic rationale even in a strong economy, leading many businesses to rethink their original big agency bias. It makes sense to find a marketing communications outsource that will work on a project basis, or adapt to a flexible, needs-based budget that allows clients to pay for services on an "as-used" basis. It allows companies to do more short-term activities without a large commitment. If a project proves successful, it can lead to longer-term relationships. Projects are a great test-drive for both the agency and the client - a way to see if they enjoy working together.
The following advice is for firms looking to outsource marketing communications:
· Location, location, location is out. You are paying an agency based on the results it will provide for you, not from its conference room. Better work or the increase of media coverage is not guaranteed by a prestigious address.
· Agencies love to drop names of contacts, but these might not be the right reporters, editors and analysts for your company. Experienced professionals constantly look to develop new relationships as needed.
· Look at their clip book, but do not be too impressed, especially by clips for big name clients. See what they have accomplished for businesses that are about your size and budget. The people showing you past results should be the same people who will do the actual work on your account.
· Agencies should have the ability to work with a flexible and changing budget as your company's needs and budget could vary from month to month.
· Make sure that your agency has a conceptual understanding of your company and industry. Have them visit your Web site on their own time before the first meeting.
· You can find marketing communications alternatives through networking, referrals, online searches (use key words such as public relations, tech public relations, outsourced public relations, marketing communications, etc.) or look at press releases from similar-sized tech companies in industries related to yours. Agencies that advertise or attend trade association meetings will recoup those costs in their fees.
· Pay attention to the structure of the first meeting. Does the agency listen to you, or is it in "sell" mode? If the agency does not listen, can it really understand and meet your needs?
· Outsourced providers are a limited resource, often working simultaneously for several clients. Make sure they have the bandwidth to take on additional work for your account and can meet your deadlines.