The Lord Arrington and prMac

A pox on both your houses…

I’ve been wisely counseled that it’s better to tone down my blog posts and do less railing against my own brothers and sisters in the PR industry and write of the great positives that transpire and inspire us to keep persevering in this vastly misunderstood profession. It’s no secret that I don’t subscribe to the traditional PR compensation model…fat retainers based on even more bloated hourly fees; and that I believe that the accountability of pay-for-performance PR is fairer and ultimately more productive for all the parties. And, that I particularly don’t like the arrogance of many PR agencies nor their counterparts in the media…old, new, or social. Thus, I’ve tried over my last few blog posts to follow a reformed line and stay toward the beige of the profession.

But then I run across Michael Arrington’s latest rant in his (I’m sad to admit) influential TechCrunch posting, “I Pissed Off a Spammer Today” regarding his encounter with press release spammer, prMac, and I can’t help but fall immediately off the wagon and head for my keyboard with a vengeance.

Here’s a snippet of what the Lord Arrington has to say…


“It’s no secret that we consider the PR industry, for the most part, the bane of our existence. They’re just under too much pressure to get results, and when we don’t do what they want (write about their clients), things turn ugly. And before things turn ugly, we get spammed. By phone, by Twitter, by Facebook, by email, by mail and by fedex. Some PR firms will lie, cheat, manipulate and then just smear your reputation to get what they want.”

Really, Michael? And technology blog postings…particularly those that have made a practice and considerable revenue by deciding which companies and which technologies deserve their lucrative praise… are the purest form of media journalism and therefore deserve to throw stones at will at an entire profession dedicated to supplying that which has made you so important…information that you pass along, true or not. Give me a break…

Ironically however, the Lord Arrington was at least half correct in his hyperbole. Not in his rant against PR-types in general, but about the firm, prMac, that is not a public relations firm per se, rather a distribution company for press releases written by the PR-types that seem to plague Arrington like a swarm of gnats on a summer picnic. But again to add to the irony, Arrington is not upset about what this firm does…distribute multitudes of written material of dubious news value and charge their customers accordingly…but that he can’t get them to leave his particular picnic alone. And because his picnic has been ruined for the day and put him in such a bad mood, he decides it’s worth a ridiculous inference…that spammers of email press releases are PR professionals…

“…the whole PR profession really needs to get a grip. We aren’t here to do their bidding. We serve our readers. At least, the readers we like. And our community. If they want to be part of that community, they need to lose the sense of entitlement…”

Arrington’s arrogance however isn’t any greater than that of a company that seems to believe that the mass distribution of press releases via email spam is a legitimate means of gaining positive awareness…nor the ignorance of those PR firms that pay these folks for such a dubious service.

Next time…back to beige.

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.

The Current State of American Business…

It’s called ‘hide and seek’

One of the truly great things about the Internet, and specifically the social media revolution, is the instant sharing of imaginative pieces that you wished you had created yourself. Pieces that express your sentiments, but written or produced with talent beyond our own. This week, two such rolled across my computer screen, that when their vastly different content is combined, eloquently state the real problem with American business today. No, I’m not speaking of recessionary pressures, bankruptcies, or even bailout phobia. I’m talking about timidity and price respect.

Mike Hegedus, the former CNBC correspondent and now media consultant, writes in his blog this week, “This timidity is in full blossom now thanks to the current uber recession.” He goes on to surmise that it’s not just the tightening of budgets, but the simple act of making the decisions to spend what is left that is the real problem. Hear! Hear! As the head of a Pay-for-Performance PR firm that oozes value and accountability compared to the traditional hourly fee model, I can’t begin to state the days and weeks we’ve spent waiting for companies to “meet to discuss,” to “get their ducks in a row,” to “pass this around the management team,” etc. etc. If anyone thinks that the most elusive thing in business today is a profit, you’re wrong…it’s a decision.

As a small business owner, I have complete empathy and respect for the process of expenditure evaluation and prioritizing those services that will provide the greatest return. But I also recognize something my wise grandmother (aren’t they all…) used to say, “you actually going to get something done today, or just sit around and think about it?”

But once that rare decision to move forward is finally made…then comes the real fun…”let’s see if we can squeeze even more out of that tightened marketing or PR budget…let’s make a deal.”
This YouTube piece would be hilarious if not so true.



Has this ugly recession driven companies to the point of treating vendors like used car dealers? Of trying to squeeze and manipulate pricing…often even after the service has been provided? And we in the PR industry are even more vulnerable to this practice because of the subjectivity of the product…and the vagaries of those aforementioned hourly fees.

Yes, I understand the need to derive the most value for least outlay. But if a PR company has actually delivered a tangible result as specified and agreed, not just an invoice for hours in trying to achieve the result, then respect the pricing and don’t ask us to choose what may be behind door number three.

Smaller independent PR firms…surviving the unsurvivable…

At the risk of being labeled with the new, old buzzword…dare I say, “socialist”…I actually believe that the new administration is doing everything it can with the knowledge and skills it has available to it, to push, drag, cajole this economy back to a level of respectability. But I also know that if we sit, wait, and expect the newly elected folks in Washington, D.C. to do all the heavy lifting than economic failure is a certainty. This is particularly true in the entrepreneurial and small business sector of this country…dare I say, “capitalist?” ( see WSJ article “Entrepreneurs Can Lead Us Out of the Crisis”)

We in the public relations business that are proud to be considered smaller non-traditional and boutique PR firms, certainly fit within that sector. Most of us have built our businesses and practices, large and small, through innovation, a fierce independence , and an awful lot of hard work over more trial and error than any of us wish to remember. Ok, not all. There are the “lemmings” in the world of boutique PR just like everywhere that believe duplication of the big old boys is the greatest form flattery and quickest path to PR riches….an oxymoron if ever there was one. There is a reason that our, not their, client rosters are most often weighted heavily with entrepreneurs and start-ups beyond smaller budgets. There is a kinship and an understanding of what drives these young companies as well as the processes needed to reach and convince their audiences that “different is good.”

So what can those of us that have taken more of an entrepreneurial PR path be doing to survive and maybe even grow during these days before we all begin to see some light over the horizon? First and foremost, recognize and remind ourselves that two of things that got us here are key to our survival…innovation and a smaller more flexible size. We’re built to adapt and move quickly to rapid shifts on both a macro and micro economic level. We’re the sailing sloop darting amongst the waves compared to the mega tanker with all its bloated weight charging headlong to an unseen reef.

At the risk of offending my fellow PR firms with my audacity and even possibly strengthening my competition, here are a few specific tips that this smaller size and flexibility allow…

1. Realize and accept that your clients and everyone’s interest and focus is totally on efficiency and accountability… and savings. Be prepared to demonstrate value in the form of real price/performance for your fees. Time to drop the B.S.
2. Listen to them and be prepared to adapt if necessary. Again…listen to the client. It’s a buyers market.
3. Shore up what you do best and make sure your current clients are highly serviced (extremely important).
   
4. But honestly analyze where there may be weaknesses in your firm and form alliances to offset these. There are other complimentary firms…advertising, marcom, web design, social media…also in the same slowing predicament. It is much less cost intensive to form a complimentary alliance to compliment your strengths than investing in new people and infrastructure.
   
5. Market yourselves aggressively with the tools and expertise at hand: publicity and the Internet.
   
6. Stay alert to the market. Keep listening to the client marketplace and stay flexible.

Lastly, keep the faith… and keep moving forward. We entrepreneurs have been through tough times before.

Feeding the beast with our tax dollars…

A story broke in the PR trades this week that much criticized insurance giant, AIG, had decided that public relations was a better way to spend it’s money considering its current position of being between a rock and a hard place...

NEW YORK: Embattled insurance company, American International Group (AIG), has retained Burson-Marsteller for PR services. In doing so, it suspended corporate advertising and other paid outreach efforts to offset the cost, PRWeek has learned. Earlier this month, Bloomberg quoted an e-mail between AIG spokesman Nicholas Ashooh and George Sard, CEO of Sard Verbinnen, discussing the possibility of placing ads to explain why AIG was planning a company conference at a California Ritz-Carlton resort.

The New York Post estimated the amount to be paid to Burson-Marsteller at between $100,000 and $200,000 per month. Those are our tax dollars, friend. But blessed be the wise, the company was doing so because it was feeling under a little pressure because of the recent criticisms…

“To spend the taxpayer's money on an expensive ad campaign to apologize for how you used taxpayer money leaves you open to further attacks,” Bloomberg quoted from Sard's e-mail. In September, the Federal Reserve loaned AIG $85 billion; the company received an additional $37.8 billion earlier this month. Some members of Congress had criticized an AIG event that took place after the company received government help. Most recently, AIG was criticized for steep executive payouts , but the company announced on October 22 that the payouts, which included $19 million to its former chief executive Martin Sullivan, were suspended. And last week, AIG agreed to suspend all junkets and perks not justified by legitimate business needs.

An associate of mine here at INK inc. determined that this new PR “defensive” works out to approximately $10,000 per work day…$1,250 per hour. Nice work if you can get it. Even by any of the giant monolithic PR firms’ compensation standards, that’s a healthy hourly fee. Having worked for several of these large firms during my 37-year career, including the recipient of this particular largeness, one can assume that chances are high that the majority of the fee will go against the writing and disseminating of self-serving press releases as a “response to the high volume of requests for information from the media, etc.” Not exactly what I would call a great trade-off for the millions in advertising dollars they were spending on the same message. A press release has little more credibility than an expensive wordy ad unless the news media buys into it. And the likelihood of responsible journalists, who also happen to be taxpayers, doing that is zero to none.

Hey AIG, I have a wild and perhaps even blasphemous suggestion coming from a life-long PR professional… and it won’t cost you a dime. Just cool it for a while, and get back to work for your millions of customers first and your shareholders second. Show some common sense, restraint…and honesty in your dealings with the American public and the news media…not more wasteful spending of our tax dollars on PR consultants.