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.

Social Media’s Influence Over PR…

The old chicken and egg conundrum

There is not a moment in my professional life these days that I am not faced with how important social media now is to the planning and execution of any program that dares to call itself, public relations. While that may well be true given that both clients and practitioners are demanding its inclusion in all RFP’s and resulting proposals, it’s being done so with or without much knowledge as to exactly what it is, how it works, or most importantly…what it accomplishes.

Well ok, if that’s what the clients want then those of us on the agency side will be happy to oblige. After all, we’ve heard about it for at least nine months now and it’s been covered in hundreds of “how to” books, and corporate CEO’s refer to it almost offhandedly as an extension of their dependence on their Blackberries. It’s not only the flavor of the year, but apparently may linger now that Oprah, Ashton, and even the Obama administration is utilizing it to readjust our dependence on prosperity to, well…less prosperity.

And while I find it amazing that this demand and fulfillment (at least in the proposal stage) continues to expand at cyber-speed it seems, I also am curious as to how this all started to have such industry significance in such a short period of time. Was it literally someone in the media, a young reporter perhaps used to conversing over the internet rather than over a water cooler or expensive lunch, that first suggested he be pitched via a crowd of his ‘friends and followers’ instead of directly. Or was it some industrious agency type that first realized that this same reporter is probably joining some of these online social communities for personal reasons, and therefore a wandering, open, and vulnerable target for his pitch. Or perhaps it was nothing more a chance meeting online between like minded souls…the reporter doing research, the PR person fishing, and a couple of shareholders and customers ranting or praising, finding themselves in a room together, all listening and talking at the same time… eureka, a new form of communication is born.

And of course, once it was determined that not only reporters and producers communicate and socialize on the Net, but our clients’ customers and stakeholders do the same, often at the same time, that “social media relations” as a brand new PR practice was born. Like much of PR, it’s a little subjective and usually difficult to describe why it’s important beyond, “everyone is doing it.” That’s ok as well. We’ll soon enough all get around to thoroughly understanding social media and its execution in a well structured public relations program. However, measuring its tangible benefits and developing fair compensation may take a little longer. Let’s hope this happens before we aging PR types have to face the next all important thing.

Did PR Kill the American Press?

You are what you eat…

Recently I noticed an article in "The Columbia Journalism Review” expounding on the theory that newspapers can only blame themselves for their imminent demise…and that blame lies with their preoccupation of “chasing the false idols of fame and fortune.” The article goes on to define this “chase” as public relations…and furthermore it states that even while chasing good PR, newspapers have fallen victim to becoming nothing more than shills (my word, not theirs) for PR professionals. That’s it, my fellow PR pros, we’re to blame. We’re killing the American Press.


Well, well, well…so many things wrong with this thesis from this prestigious publication that it’s difficult to summarize them all. Let me try just a couple…

First and foremost to define “chasing false idols of fame and fortune” as public relations is so odd as to be laughable. Newspapers in this country may well have decided that winning awards was important both for its readership as well as its business side, but only a first year journalism student not listening in class would refer to that as “public relations.” As far as “reporters making television appearances”…huh? The few reporters I see on the air tend to be connected to and reporting on a big story (that’s called journalism.) Does the author actually believe that with TV air time so precious even for their very own TV reporters, that broadcasters would relinquish it to a newspaper to promote it’s own? Not.

And the idea that public relations is creating the news everyday for America’s newspapers…and not the editorial staffs, who are preoccupied with advancement up the ranks rather than news gathering…well, we in the PR ranks should be so lucky. Blaming PR however ill defined, for newspapers’ diminishing size, circulation, and influence, is simplistic, and frankly beneath such a prestigious publication. An added insult is the article’s contention that are not enough good reporters with “expertise’ at the bottom rung and therefore newspapers are easy prey for the evil PR types waiting to infiltrate with “worst of all, snappy comments by spokesmen or experts.” Oh God, not that!

If ever an article deserved to be given a toss to the proverbial ‘round file’ or at minimum, a hearty, “Give me a break!” it’s this one. The real reasons for the American newspaper’s demise is both economic and technological and to a great degree, demographic. The Columbia Journalism Review may not be aware, but newspapers and all of journalism share a mutually beneficial and synergistic relationship with the PR profession. We need each other and depend on each other. We share our people and background, we share a desire to maintain journalistic integrity, i.e., news must be news worthy, and we share a distribution system for our product.

PR kill the press? Give me a break!

If the Traditional PR Happy Meal Leaves You Still Hungry…

…Is it too much to ask for a little media with that order?

We’ve been asking ourselves for a long time now why so many really smart companies put out the big money to their traditional PR firms for practically nothing of substance in return…like ordering a Happy Meal™ at your local fast food stop and not getting fries…or even the Big Mac™!

We decided it might make for some interesting video to tell the “Pay-for-Performance PR” story in a series of vignettes. Who knows, it might even make you hungry for something other than a fat juicy invoice every month…

What’s in a Name…

…does the rose still smell as sweet monthly?

It was announced in the "New York Times” last week that the venerable (hey, ten years in the this modern communication age qualifies…) weekly public relations news magazine, PRWeek, was becoming a monthly…but still keeping the same name.


Not only is this industry tabloid reducing the number of issues, but its physical size as well…shrinking down to standard magazine size. Oh great…now, it will no longer stick out on the reception area coffee table, but now will get shuffled amongst the other media rags relegated to the seldom read, but purely authoritatively decorative category. More importantly however is whether this size and frequency metamorphosis will alter the content, and thus affect its interest and value to the PR industry, i.e., its ‘brand.’ The publisher of course, says no…but only in time and a few issues will ultimately come the answer.

It raises an interesting issue, however. Just how important is a name in branding a company’s product or service? And if circumstances, economic or otherwise, dictate a shift in how those products or services are delivered, should the name change as well? In most cases, I would say no, not as long as the product or service itself does not change. But, in PR Week’s case, I’m not sure it matters since it is doubtful that the name has little to do with the content and a lot more to do with its time of delivery…and frankly, most of us are already getting our PR industry news and gossip on a hourly or minute-by-minute basis on line or by tweet. So, I can certainly understand the reluctance by the publisher to rename it, “PRMonthly but a little smaller.”

I like to believe that a company name can and should be very much a part of its ‘brand. ‘ When I founded my company twelve years ago, I pondered a variety of names…from ego-centric initials to multiple names (some even fictitious, but with great gravitas) before being advised by someone younger but much wiser than myself to keep it simple…”just name it for what the company does then you’ll never have to change it…or forget what you’re good at.” It was a good exercise to go through, and one I’ve advised to other entrepreneurs and spin-offs. Find your core competency and embrace it. In our case, we named ourselves INK inc for what we deliver to our clients, nice and simple. Over the years our ‘brand’ hasn’t changed…either in essentially what we do or in what we call ourselves.

Ok, maybe in today’s fast paced world we should change it to INK/Video/Social Media/Tweet inc. After all, that’s what we now do….nah, it doesn’t seem to be quite as catchy.

We’re Dying Out Here!

…one hourly rate at a time.

It’s no secret that recessions, big old nasty deep ones like what we’re currently experiencing, are particularly hard on public relations budgets…which in turn is bad for the hundreds of PR firms in receipt of the shrinking largeness of those budgets…which in turn sends thousands of PR folks (often the young good ones, unfortunately) out on the street looking for new employment. But does it really have to?

Not in all cases. Not if we in the profession and those that employ us, would ever unshackle ourselves from the concept of the billable hourly rate. *

Ostensibly hourly rates are bestowed by the rank and expertise of the various account team members and translated onto daily and weekly timesheets, which translate into a cumulative monthly total of billable hours which, if God is heaven and the stars are aligned, translate almost exactly every month to the maximum budgeted dollar figure retainer agreed to by the client. Amazing…whomever within the agency first estimated the retainer based on all these various billable hourly rates must have been a math genius.

Not so ostensibly, or at least openly discussed, is the billable hourly rate “game” conducted in virtually every PR firm. The game starts at the top and falls heaviest on those on the bottom. For it is they that pay the most severe price when it fails…which it most certainly will in tight economic times. Based on that maximum monthly retainer figure which absolutely must be met, agency management demands downward that hours be recorded each and every week (if not daily in some firms) at the necessary rates to maintain this revenue stream. The game comes in the recording of the time actually spent “doing client business”, including writing timesheets…and is often the most creative thing one does weekly. Compounding the problem is the fact that these same firms have bloated their overhead and payroll with non-productive elements that become non-essential in tight times…facilities and trendy office space, specialty consulting practices, etc…that demands an equal increase in those same hourly rates.

Of course lost in all of this, is actually servicing the client in a reasonable efficient and measurable way. But exactly when did efficient, measurable client service translate to between $150 and $300 an hour?

Thus as times get tougher, management demands a higher and higher percentage of billable hours at rates that the clients’ budgets can no longer sustain. Add to this the fact that this monthly budget or retainer is shrinking. The paradoxical result is clients terminate the PR firm because they can no longer afford them; and the PR firm begins laying off employees…usually those at the low-end of the hourly scale…the ones actually doing much the work at an affordable rate.

Here’s a simple, elegant solution to keep good people employed…dramatically lower the hourly fees, or even better, eliminate hourly fees altogether. Charge clients fairly for actual PR services completed…actual media placements, and projects completed. Incorporate a bonus structure for meeting budgets and deadlines or levels of coverage. What a revolutionary idea…charging clients for actual work completed and not for creative time-sheeting.

The result will not necessarily keep everyone from losing their job…just the good ones.

*(For the sake of full disclosure, my firm and myself personally, have not billed our clients by the hour in seventeen years…through three recessions…but what do we know.)

PR Street Smarts…

J-Schools are booming but is the PR curriculum keeping pace?

Recently Forbes.com published a "story” on the irony of while newspapers and magazines are going under at an unprecedented rate, enrollment in journalism schools around this country is at an all-time high. The crux of the article being that these advancing hordes of would-be journalists have little to look forward to in the way of meaningful employment after college other than less than desirable journalistic exercises such as Cat Fancy magazine or even teaching in this current recession. Although one can’t help but assume that Cat Fancy, teaching, or even Forbes.com might be very desirable given the current job market.

Nothing of course was said about those journalism grads that might be considering a career in public relations…and probably for good reason. If, as the article states, that 5,000 journalists have lost their newspaper jobs last year, then it’s probably a good bet that dramatically more PR types also took a job hit in 2008. And if any of those incoming journalism students wish to consider a job in PR right out of college, beware, you’ve got two big mountains to climb.

First and foremost is obviously the extremely limited number of entry-level jobs available. Secondly and maybe as important, is the limited and non-essential pabulum being dished out as the PR major in most journalism schools. Based on my experience in both guest lecturing and in hiring interns, public relations is still considered the unwanted stepchild in most j-school curriculum's at worst, or based on the out-dated traditional model of press releases and mass communication theory at best. Neither prepares graduating students even remotely for the fast-paced media relations driven world of entry-level PR. Way too much time is spent on how to write a good press release (which may be the ultimate oxymoron in journalism) than how to spot and understand “soft news angles” and how to turn them into a meaningful and influential pitch with a reporter or producer. A good PR school teaches how to write journalistically…a great PR school teaches how to understand the news, what makes a great story…and how to “sell” that story.

I understand there may not be a way of “teaching” all the skills and experience needed to be effective immediately, that much of what we exercise daily in our jobs is derived from learning as we go…watching, learning, practicing…developing news “street smarts.” But if J-schools are booming and as flush as mentioned, why not take those select few students inclined toward PR, and provide a learning and experience framework that will provide some of those street smarts within or even outside the classroom?

It might actually allow them to be the exception…a college grad with a job. I know we’d be interested.