PR Agencies – under resourced and under priced?

Link: ANALYST EQUITY: PR: Opportunities, obstacles and solutions.

A forthright post from Duncan Chapple on the subject of PR.

Some quick excerpts:

"PR’s inability to produce valuable results is reflected in underresourcing and underpricing by agencies. Most agencies’ pre-tax margins are a miserable 3.6%. Twenty percent of agencies price below cost. Their sales growth conceals forthcoming ruin. A further 44% of PR companies barely break even. The remaining one-third of agencies deliver real value, but their profitability is also threatened by consultancies that price below cost."

I was curious to know where these figures were derived from – if Duncan has his hands on a decent size sample analysis of PR company’s financial peformance, then I’m sure many others would like to investigate further too. 3.6pc pre-tax margin is indeed miserable – and of course, post-tax margin is what really matters – and that means the real margins are even slimmer. Have to say the claim that "most" agencies are making these margins suggests that the PR industry isn’t really the best way to get rich…

And as for those 20pc of agencies apparently pricing at below cost, it beggars belief. Or perhaps they think they’ll make up the difference on volume 😉

"Advertising failed when it drifted from its scientific roots. It became a creative art form."

Not sure advertising ever had scientific roots – though certainly the data available on which to plan campaigns has been more detailed than that for PR. Having said that, good PR companies will always have the numbers on which to justify an approach.

"PR seems so easy. Almost anyone can do it and, if journalists’ complaints are heard, it seems almost anyone does. Most leading PR consultancies are perpetrators of catastrophic errors. Their industry is seen as an ethical wasteland."

I’m sure we’d all like to know more about those catastrophic errors!

"The reality is that few PR managers even align their campaigns to the corporate marketing plan, let alone aligning their campaigns to customers: in-house PR managers know how few agencies ask for the marketing plan; PR agencies know how few clients offer it."

Few clients may offer it, but any PR company worth its salt should always ask for it –  PR in isolation is indeed a wasted effort.

No stamina at the FT?


After only 5 days, the FT has closed the blog it set up to comment on their Feb 18 story by Trevor Butterworth. Which is a shame.

As Glyn Moody has already pointed out in 10 Things To Build A Blog Readership, one vital attribute is stamina.

Dennis Howlett on innovation for professional accountants � The mouse and the elephant – or how mainstream media censored a reader

Link: AccMan Pro – Dennis Howlett on innovation for professional accountants � The mouse and the elephant – or how mainstream media censored a reader.

A small firestorm is brewing over at Dennis Howlett’s blog over the apparent censorship meted out on the AccountingWEB site. The explanation given by the publisher – "We don’t allow self promotion – It’s not in our commercial interests to send people away from our site” – is the thing that seems to be stirring up the ire of various commentators.

Although not familiar with the fine detail of the case, from the outside it does seem a rather curious stance. The web, by its very nature, is designed to assist travelling to various destinations rather than stopping at one.

Also, surely readers will be able to evaluate for themselves whether something is a gratuitous plug – and thus refrain from clicking on a link away from the site?

Providing a comment isn’t offensive or libelous, common sense says let the community decide for themselves. Web Traffic – more than Oracle

Link: Web Traffic.

Interesting post from MySQL’s Zack Urlocker – namely:

"Last year we actually surpassed Oracle’s web site in terms of traffic, as measured by Alexa.  However, not to pick on Oracle, in the tech sector we also generate more traffic than Red Hat, Novell, SAP, Apache, JBoss, Eclipse, BEA, Borland, Gartner, eWeek and InfoWorld.

Beyond tech, we actually have more traffic than some popular "mainstream" brands including the Nike, United Airlines, AT&T, Honda, Toyota, Ford, Porsche, Shell, GE, Princeton University, Fender Guitars, Coca-Cola, McDonald’s and Hooters.

Ok, I admit, this was not a scientific analysis (especially the comparison with Hooters), and we have less traffic than some household names like Apple, IBM, Microsoft and Intel.  Nonetheless, MySQL’s web traffic is larger than many of the top best-selling brands as reported by InterBrand.  For an open source database company, that’s pretty good!"

10 Things to Build a Blog Readership

Link: open…: 10 Things to Build a Blog Readership.

Sound advice from Glyn Moody.

IT Week – James Murray interviews Hyperion CTO John Kopcke

James Murray – IT Week – interview with Hyperion’s John Kopcke

The trackback facility for stories on VNU’s website has set me thinking that this is another avenue yet to be fully explored (exploited?) by those of us working in the Web PR 2.0 world. In the past, once a story appeared, you had no further means of continuing the conversation around it – or at least not in a way that was open to public scrutiny. For example, what if someone felt they were misquoted? Rather than write an angry letter to the Editor asking for a correction, you can put your case in the open and let people make their own minds up.

And before anybody asks, James has written an entirely faithful record of his conversation with John at the Gartner BI Summit of a few weeks ago. For those interested, more of John’s insights into the whole subject of business intelligence and business performance management can be found here:

Hyperion Executive Thought Leadership Perspectives

Julian Henry’s rant in today’s Guardian

The following post on the Mediations site – Julian Henry in the Guardian – tipped me off to a rather extraordinary polemic about PR.

According to Mr Henry:

Most of the major
PR agencies in the UK construct their business around writing
strategies, drawing up Q&As, drafting positioning statements,
scripting advertorials, collating briefing packs, printing press kits
and countless other bits of waffle that underpin our daily trade. This
rationalising process gets charged to the clients, who in most cases
seem happy to pay for it…

Get rid of all this stuff and you would demolish half the industry at a single sweep…

If you were to reduce the role of the PR consultant to its most
basic function what do you have? The man or woman on the phone whose
job is simply to offer a description of their client’s product in a
topical, creative and engaging way.

Now let’s take a look at Mr Henry’s own company website: "Henry’s House has a full time staff of 20 executives with experience and skills in media relations, strategy and brand planning.
      We are big thinkers with extensive brand experience". (My emphasis). Based on his own analysis, does that mean he will be firing 10 people this afternoon – namely his own personnel involved in "countless other bits of waffle that underpin our daily trade."

Perhaps his clients will be pleased to know that they’ve been spending money on such "waffle."


I’m a PR veteran

Link: Blog.

Says Guy Clapperton – I feel flattered. And very old.

FT wades in on blogging


Trevor Butterworth piece on blogging in the FT magazine this weekend – the link above is to the blog set up to discuss the piece. You can read the original article here:

FT on Blogging

In short, its a sensible piece that says blogging isn’t going to change the world too  much some time soon. He also says that Orwell would have been a hopeless blogger. That’s possible. But as I have stated previously, I think he would have approved of the people being able to blog – not least as a way of recording political events and how they are reported – with the added bonus of being able to share this with others and see how others have viewed them.

Sadly, no trackback for the FT Blog.

You are the weakest link

The following from this afternoon’s Silicon email newsletter shows that human beings remain the weakest link in the security chain.

Turning a little bit Crimewatch for a minute, the Round-Up would like to begin by asking: "Were you in the City of London on Tuesday 14 February?"

"Did you see individuals acting strangely? Perhaps you saw them handing out CDs to commuters?"

Well, if you did, and you took said CD and put it in your PC at work then you were taking part in a social experiment to see whether employees, working in some of the capital’s most (you’d hope) security-conscious industries – such as banking, finance and insurance – would accept a CD from a stranger and explore its contents on their work PC.

And of course, you guessed it, a lot of them did.

Thankfully all the CDs actually contained was some code which would inform the organisers of this stunt, IT skills specialists The Training Camp, just how many people had been duped.

No personal or corporate data was transferred – the CEO of The Training Camp was very quick to point out – but there was enough information to indicate that employees within a major retail bank and two global insurance giants had fallen for it. And they were just the tip of iceberg.

Rob Chapman, that very same CEO, told "this could have been someone wanting to cause havoc in the City".

And of course it could indeed. Fortunately this time though it was an experiment.

Even now some of you may be reading this and performing the classic full-palm-slap to a slightly moist forehead… the universal sign language for ‘I’ve been an idiot’ (though we like to think Round-Up readers are a cut above the kind of dolt who’d have been suckered in by this).

So what does this prove? It illustrates just how out of touch employees and companies are with the human threat posed to their network.

After all, why would criminals bother trying to come up with clever and sophisticated ways of breaching firewalls and perimeter security in order to infect a company with malicious code when they could just put it on a CD and tell commuters arriving in the City that it contains a competition?

Let them do all the hard work.

Bob’s your uncle, the employee takes the bait and for the cost of a few hundred CDs malicious code could be onto the corporate network before a witless employee’s first Starbucks coffee of the day is even cool enough to drink. (Starbucks hot beverages – hotter than the sun or not hot enough? Discuss.)

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