The Clients Are Now in Charge...for real

And some of the big ones are real monsters…

If fighting for every client dollar amongst our own industry wasn’t enough, now we are fighting the clients themselves for theirs… as well as ours. A couple of stories this last week really brought this fact home. The Wall Street Journal "Thrift Darkens Industry Hopes" once again reported that this recession is causing big companies like American Express and Shell to cut back on the fees they pay their advertising agencies and thus, asking for equal or more service for the same or less. And "Advertising Age" reported this week that the biggest of all companies, Walmart, is actually asking many of the consumer companies marketing through this behemoth to divert some of individual marketing budgets back into Walmart’s budget…or else! (Walmart of course, doesn’t state it so overtly. They simply hide the threat with a wink under the guise of a “simultaneous push to clear their shelves of underperforming brands.”

So why should this concern me, a CEO of not an ad agency, but a PR firm that specializes in clients much smaller than any of the above? Because in this business of marketing and influence, what happens at the top eventually filters down…and in this current recession and 24/7 trade news cycles, that eventually is shortened to ‘very quickly.’ The big clients are now firmly in charge.

Yes, I know, we have all played to the cliché, “the client is always right” or some such platitude. But that usually only went so far as to acknowledge a client’s right as the “spending partner” to have final say in friendly, professional disagreements…sometimes financial, sometimes creative. This is a different animal entirely, and worst of all it appears to be a trend. Companies that only recently spoke of and often treated their ad and PR agencies, not as vendors, but as marketing partners, now in this buyer’s market have shifted completely into the “you’re a vendor” gear and are driving hard compensation deals where only they are the winners.

What’s an agency to do that wishes to work with the big boys and girls of the Fortune 500? Not much, unfortunately. You could always just keep quiet and go along believing it’s only temporary and once the economy has righted itself the compensation and partnership equilibrium will be restored. Do I hear snickers out there? You could of course, speak out and up at the injustice of it all…using what’s left of the media, trade or otherwise, to state your case. The end result unfortunately isn’t likely to be any more satisfying and, even more damaging to your bottom line.

Or, you can concentrate like many of us in this business have on the smaller entrepreneurial companies as clients. But you better know how to work smart… and for less here as well. Yes, we’re seeing even ‘more for less’ client demands among the smaller companies as well; but since we’ve never really dealt with monster budgets, incrementally it doesn’t seem as bad. And smaller companies don’t have the bureaucratic layers of internal marketing, advertising and PR managers professing to have the knowledge and wherewithal beyond that of their vendor agencies. Our clients, (well ok, most) actually act like they really respect and need what we bring to the partnership.

At least for now.

Incubators are Growing New PR Opportunities

They’re there if you know where to look …and it isn’t just Silicon Valley

I couldn’t agree more with a recent NY Times story, "In Tech Industry, Some Signs of a Comeback" that stated, “even in a downtrodden economy, hope springs eternal, and technology companies are among those starting to feel more hopeful.” This was really brought home for me this last week as I attended meetings on both coasts with the young internet entrepreneurs that are refusing to be intimidated by the doom and gloom pundits, long hours and even in many cases, little to no funding.

My first visit was with Dreamit Ventures in Philadelphia, a dynamite gathering of embryonic companies run by a new generation of “garage entrepreneurs” that are as bright and ambitious as they are impressive in their goals…and, in their desire to learn from others that have gone before. I was fortunate to have been asked to join a long list of previous speakers from corporate attorneys and marketing gurus to venture capitalists. They listened intently, asked great questions, took tons of notes, and were genuinely interested in understanding how to best communicate to their present and future market audiences. Truthfully, I’m not sure who learned the most…myself, or these young entrepreneurs. Their creativity and enthusiasm was infectious. But it was their optimism against arguably some of the toughest financial times ever, that left the greatest impression. I suspect more than a few will beat the odds and grow into successful long-term businesses.

A day later I was in Southern California…Orange County to be exact, where twenty-five years ago I opened Burson-Marsteller’s first ever technology focused office. That office is long since gone, but technology start-ups are still flourishing along the Interstate 405/5 corridor. My company, INK inc., has been fortunate over the years to have developed strong working relationships with many of these young companies, but on this trip I was here to meet with a young exec with Google (aren’t they all) that was kind enough to be introducing me to several new start-ups as well as the VC’s supporting them. Once again, I couldn’t help but marvel over the simple fact that to these young companies and the fresh minds that create and drive them, there are few negatives in their day. They cannot afford the time to feel empathy or sympathy for others struggling with the economy. After all, they are in survival mode all day, every day…have been from their inception.

Yes, some, if not many of these start-ups won’t survive. So as a PR agency, is it worthwhile to waste valuable time on such risky endeavors? It is, absolutely, if the agency can work within the constraints of time and budgets that dominate this entrepreneurial world. However, those PR firms that can’t leave their fat retainers, hourly fees, and big egos at the door, will miss and should miss this golden opportunity. For those select start-ups that do grow and thrive against the odds represent fantastic opportunities to forge a long-term client bond based on not only being there in the beginning, but in contributing to their success.

Not Charging By The Hour Doesn’t Make Time Worthless

PR recessionary lesson No. 1…save the baby!

You know, as long as we’re stuck in this nasty quagmire of a recession there are a number of lessons to be learned while we all wait (and hopefully work) for the promised turn-around. The first of which is how we keep from devaluing time when we have more of it on our hands. This seems to be a particular trait of larger enterprises where being busy or at least the appearance of being busy was prized and rewarded with ever increasing promotions and escalating salaries. But as the economy has soured and marketing or PR salaries have gone south or disappeared altogether, we have a new phenomenon emerging….doing more for less on the inside of an enterprise…and doing more for nothing on the outside. The attitude seems to be that “if I have to work harder for less, than you, Mr. PR vendor, must work for even less and perhaps nothing until you have proved your value. Since you’re not charging me by the hour, then your time must be free…” Really? I don’t think so.

Granted, this recession is driving many of the bad compensation practices and PR-types cultivated during the boom into the waste basket they deserve…however isn’t there an old saying about babies and bath water that should apply here?

Sure, budgets have disappeared or tightened, and the competition to hold existing business and to secure new accounts is far more competitive than ever. And, traditional PR agencies are even (God forbid) ever so slightly experimenting with performance-based compensation to keep those elevators rising. But does shifting away from exorbitant hourly fees or being more creatively competitive in proposals mean that the time still expended has lost all value? Even if such value is translated only in respect for the time spent. Exactly when did dollars charged equate to respect given? Where is it written or taught that when one does not charge incrementally for something, than the cumulative effort has no value…particularly if it is as a result of a plea for assistance?

We’ll continue to utilize all our experience and put forth our most creative, and therefore most competitive thinking to both sign and launch our clients toward success. If these tough times didn’t call for it, then our respect for our own professionalism as well as our client’s business would require it. What we ask in return is not an hourly stipend but that the prospects and clients respond in a timely manner and participate in the process. Respect our time as they ask us to respect theirs.

We all know that a long-standing truism in this business is that when a prospect or client wants something, it’s always with a yesterday deadline. And, when the agency needs something in return, yesterday deadlines become a few days. Ok, understood. It’s part of the game and we’ve all played it. But, hey…a little respect for our time here…even if we’re not charging you by the hour.

Reflections on the First Blog

“When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.


We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness…”


Thomas Jefferson, et. al. – July 4, 1776


Enough said.