The simple answer is “no”…in the sense that it is unlikely all PR agencies will become extinct. But “yes” in the sense that many of them face extinction. Extinction, not because of a 15-kilometer-wide asteroid hitting the earth, but because of their inability to adapt to the new world they live in. Too many PR agency leaders – on the global, regional and local levels – are intellectually lazy when it comes to thinking through what they need to succeed, not just in the next quarter, but in the next five to 10 years and beyond.
Consider a few points on the state of the world for agencies today:
- Some of the biggest client brands – which previously would always hire a “big name” agency – are using freelancers for much of their PR/communications needs.
- In many markets, small boutique firms – who don’t claim to be “everything for everyone” – are offering better work, lower prices and more focused approaches to client needs.
- In most markets, there are just too many agencies for the number of clients and most agencies don’t know how to really distinguish themselves from the pack.
- Some agencies – including some of the “big names” – don’t even have a plan for being truly integrated and using digital to meet the needs of the new world clients live in. This puts them about 20 years behind the “early adopter” agencies and at least 10 years behind everyone else. Not fully integrated in 2020, seriously?
- It has become increasingly difficult to find the raison d’etre for hiring a large agency, with lots of offices.That leaves clients wondering why they are paying for the name on the masthead and whether it’s worth it.
Now before we get too cynical, there is a very simple way to solve the “extinction” problem….but it will take some hard work. The prescription:
- Agency leaders cannot assume that their models of today will work in five years, three years or even next week. They need to take an entrepreneurial, “lean start-up” approach to the business, constantly asking what works, what does not work and what could work better.
- Leaders need to be manic about truly focusing on how their firms can make a meaningful difference to the client’s businesses. And yes, media coverage and impressions and even clicks may feel nice. But unless it drives behaviour and ultimately business results, it is like cotton candy -- tastes good but is full of air and no real nutritional value.
- Given almost everyone in the industry complains about how difficult it is to hire and retain great people, start giving out equity or profit-sharing to everyone. It is obvious that when someone has “skin in the game,” they more often than not work harder, are more committed and are willing to do what it takes to help the firm succeed. Simply put, they will go “above and beyond.”
- Create and truly live a “unique client experience” so that brands who become clients know their experience with an agency is unique and different from others. Long-lasting client-agency relationships are not built merely on results but also on how the client enjoys working with the agency, whether they like the people and what their overall experience is like. Great professional service firms think about this and practice it every single day.
Experienced agency leaders will not be shocked by any of the above ideas. They know it, they live it every day. But they need to ask themselves, “Are we really trying to create a great business that impacts our client businesses?”, “Are we putting in the time and effort to determine how we can be great?”, “Are we passionate about excellence?”. I am guessing very few can answer “yes” to all three questions.
About 66 million years ago, the dinosaurs had no idea – if they even were able to think about it – how to deal with an asteroid from space that left a 180 kilometer crater in the earth and led to extinction. The good news is, the challenges faced by PR agencies are significantly less. However, whether or not specific agencies will survive is real and is not going away.
The simple question is, “Do they have the willingness, passion and guts to look in the mirror and strive for excellence?” I don’t know the answer. Do you?
The writer is Martin Alintuck. He was most recently the managing director Southeast Asia at Ruder Finn.