TABLE: PR companies and corporate clients
SERVICES - PR COMPANIES
In the spin of things


The PR discipline has undergone a necessary period of rehabilitation


There was a time not too long ago when public relations (PR) was not a must-have on any marketer's list but a must-get-rid-of. There were good reasons for this. The perception that PR was the soft and ineffective end of the communications spectrum was often justified. Strategic ability was sorely lacking and many clients complained of a complete lack of understanding of their business.

Press releases, the lifeblood of most PR agencies, more often than not had to be rewritten by senior executives, who rightly questioned the wisdom of using an agency, often at exorbitantly high monthly retainers. It's not uncommon for these agencies to charge between R50 000 and R75 000/month.

"For what?" asks one leading marketing manager. "So they can stroke my ego, tell me how well my company is doing and present me with another long list of promises that won't be fulfilled?" Companies were happier hiring in-house talent, scaling the operation down and developing personal relationships with individual media practitioners.

In many ways that model still holds true. Unlike advertising, PR is built on personal relationships with the media and an ability to conjure up credible editorial content from purely commercial offerings. The trick is the better you know the journalist, the more open they are to a story idea.

But there has been a sea change in the past two years as big corporates now see the value of having a top-rated PR company as a strategic partner - and the keyword is strategic.

There has been a growing realisation that PR is no longer an adjunct to advertising, but is now actually at the sharp end of the marketing discipline. Some of the bigger and more established shops have been forced to hire better strategic talent and up-weight their services to a consultancy level. Some PR agencies could not compete credibly in some disciplines with the more traditional business consultancies.

They have also hired outside of the usual pool of disaffected senior journalists who enter the job for a better pay cheque, or who are looking to end their careers in a cosy job with lots of lunches.

Marketers these days are looking beyond media exposure and want PR companies that can offer new ideas and become value-add partners in a commercial environment that seeks outstanding messaging in an increasingly cluttered market.

The discipline has become even more important as companies are required to become smarter and more open in their disclosure regarding ethics and corporate governance, and when a crisis hits.

Many PR agencies in the past year have reported growth as high as 35%, often outstripping their counterparts in the ad industry.

There is also a whole new genre of PR companies emerging that focus specifically on brand-building. They often work closely with ad agencies but focus more on what the industry now terms brand activation.

This meets a need by marketers to develop and maintain a personal brand relationship with individual consumers. This is often done through good database management, and experiential events where consumers can drive, taste or touch products.

These days savvy marketers will put an account out to pitch that calls not only for an above-the-line agency, but also a PR company with brand expertise. The trick is for the two to work in harmony. Often that is difficult to achieve unless there is agreement on brand direction and a clear demarcation of budget.

Another argument is whether a company hires big or small. Big PR companies, such as Meropa Communications, Magna Carta and Ogilvy PR, have critical mass, proprietary tools, strategic ability and international affiliation, and come well recommended. Smaller agencies such as Corporate Communications Consultants offer a more personalised service. Decisions are based on a client's specific needs.

There is no doubt that the PR discipline in SA has not only reinvented itself but has also undergone a necessary period of rehabilitation.

Remuneration remains the biggest issue. Agencies work on tight margins. For instance, Meropa reported fee income last year of just under R25m - a far cry from the leaders in the ad industry.

PR agencies like to lock into long-term contracts. The conventional wisdom these days, though, is to pay per project. It keeps both the agency and the client on their toes.


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