10 things for Charles Arthur to consider about the tech PR industry


Charles Arthur at The Guardian has been musing on his relationship with the PR business and sparked a cavalcade of comment, mainly from PRs. I posted the following as a comment, but at time of writing, it hadn’t appeared, so here is my response again (apologies to regular readers who are probably familiar with many of the points I make):

1. Every time someone like Charles bemoans the “did you get my press release” tactic, PRs rush to decry the practice: “Oh no, we don’t do that”. Then who the bloody hell is then? It clearly continues at a significant enough rate to remain an issue for journalists across the board.

2. Profit margins for most PR companies are small (20pc plus net pre-tax margin is a stellar performance. Breaking even or making the loss is the norm for most (66pc of PR firms says Plimsoll). Don’t believe me? Go and look at Companies House data. Even in the boom times of the late 90s, the way companies made real money was through overservicing. As an old boss put it to me recently, “we made the profits we did because people were prepared to consistently work beyond 6pm at night.”

3. Overservicing in trad PR continues to be endemic. And is getting worse. As a result, more people are leaving the industry and those that come in to it, don’t expect to stay around for too long.

4. The basic finder/minder/grinder model (director/manager/account executive) of PR agency is still in place. It is predicated on media relations being the primary reason clients hire an agency. (A recent survey shows that print coverage is still deemed more valuable than online coverage by PR firms and their clients). And yet as I’ve cited many times before, your average agency spends barely 15pc of its time on media relations. The vast majority of time is spent on account management/reporting/admin. For all the words poured out by tech PR firms about their clients products, how many are actually deploying them in smart ways to automate whole swathes of admin and reporting that is currently being solved by throwing bodies at the problem?

5. Who starts PR companies? People who have worked for other PR firms. (I’ve wracked my brains to think of a PR company that has been started by someone from outside of PR – perhaps the industry could do with some fresh eyes on the problem). The only model they have any knowledge of are the firms they have previously worked for. If the same basic model is still being used, and it appears not to be working, isn’t it time someone developed a new model?

6. PR firms are generally poor at client expectation setting. This is usually driven by the need to win business at any cost – because there is a generally pessimistic view that you have to keep getting new business because you are bound to lose some of your existing business. Life is a constant battle to keep more coming in the top than you lose out of the bottom. (Given that the av. tech marketeer lasts on average 2 years in the job, a cynic might argue that this is a sensible attitude. The number one reason for an agency losing the business is a change of client personnel rather than poor performance). Over promising leads to overservicing, squeezed margins, less money on training, and ever more desperate tactics (see point 1) being deployed.

7. There are more PR people chasing fewer journalists. The signal to noise ratio for journalists grows ever higher. It leads to PR firms trying to squeeze every ounce of juice out of the traditional PR agency model ie throw cheap resource at delivering over ambitious targets for clients with more demanding expectations – based on a total addressable (print) media coverage space that is getting smaller by the day.

8. I suspect a 90:10 ratio exists in terms of UK tech media coverage ie 10pc of tech companies account for 90pc of press coverage. Which means the other 90pc (ie 9,000 tech companies in the UK?) are all vying for that 10pc stump. Trouble is, given point 6 above, many PR companies will give the impression to the 90pc that they can eat significantly into the top 10pc’s coverage real estate.

9. The tech PR campaigns that win PR Week awards or similar are exceptions rather than the norm. The classic winning formula is usually Company X only spent Y on this campaign and generated coverage worth Z. This re-inforces the idea that all PR campaigns can achieve amazing results on small budgets. It has become a truism for marketing directors and PR Managers to say that PR is the most cost effective element of the marketing mix. And yet, certainly in the tech sector, PR has remained stuck on around 5pc share of client marketing budgets for as long as I can remember. With marketing budgets being cut, PR’s share of the pie would appear to be going down. Meanwhile, digital marketing continues to take an ever growing share of budget (12pc and rising says IDC).

10. Most people in tech PR hate media relations (or at best, would rather not have to do it, if given the choice). The reason people hate doing it is because they hate the response they get from journalists when they ring up to ask “did you get my press release”. However, unsurprising if they are simply perpetuating an industry-wide institutionalised behaviour (see point 5).

There are clearly other factors – but the reasons for Charles’ current perception of the PR business are connected to all of the points above.

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Comments

  1. Rob Brown says:

    This is a really thoughtful and insightful piece. Having been in the business more years than I care to remember the analysis here rings true. The PR business however is reinventing itself not least because it has to. There are digitally focussed agencies that are ahead of many of the established agencies but the best of the mainstream businesses are reinventing themselves top to bottom. The wants that don’t will start to wither.

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  2. Commentard says:

    “If the same basic model is still being used, and it appears not to be working, isn’t it time someone developed a new model?”

    There is a new model – Advertorial 2.0 – and most mainstream newspapers are already doing it. Rather than wasting time with all the pitching and other rubbish, you just pay for the coverage.

    You basically bypass the agonising negotiating with journalists completely, and strike deals with key people on the executive team to have your articles written by the journo of your choice, to your liking, in exchange for money. It doesn’t look like an advertorial, because the papers are so incredibly desperate for cash that they’ll present it to the reader unaware as a news piece.

    Every single UK national broadsheet newspaper does this now, without exception.

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  3. A good, honest reply

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  4. Yup, indeed, totally spot on. I love the point about only PR people running agencies. I came into PR from the software industry and it is laughable what most agency PR leaders think that clients want. Like humongous weekly reports with 150 instances of the word ‘liaise’. They go right in the bin!! Keep up the good work 😉

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