Thursday, November 01, 2007

Wired Editor's Rant Exposes Weakness of Traditional Big-Agency Model

As the fallout from Wired editor Chris Anderson's post on lazy flacks continued, with both journalists and PR pros taking both sides of the coin, a thought struck me that's been missing from this debate.

Although it may not be acknowledged widely, one of the main reasons that the poor pitching practices continue in the PR industry is because of practices that are especially prevalent at big agencies. Those agencies, many of whom represent some of the largest corporations in America and charge five-figure monthly account balances, rely on a ready supply of young talent to pitch media. They do this because they come cheaper and are more profitable. How is this? It's simple math: the profit margin on an account executive who might be billed out at $130 an hour is much higher than an account supervisor, who might go for $200 an hour or more since the former can be had for a salary in the low 30s(K), in contrast to the $75K an up an account supervisor will earn. Simply put, the profit margin on each hour is much higher for lower-level practitioners.

PR is quite different than other professional services in that lower-level employees are often given very specific tasks that separate them from high-level employees. In contrast, aside from crisis communications planning and the design of PR programs themselves, much of the core day-to-day work in a PR program isn't performed by someone in a supervisory or advanced career stage at all.

In theory, one could say the practice engaged in by typical, large PR agencies was good business. After all, theoretically every business is in business to maximize the revenue potential of its products or services. This theory quickly breaks down when PR campaigns are executed, however. As I mentioned, my former "life" was a journalist for CNN and other outlets. I can tell you without a doubt it was beyond painful, both for me to listen to and I'm sure for the junior PR pro, to weather pitches during the start of the tech boom. Much of the stuff being promoted then had very little in the way of compelling advantages, making it doubly harder for a junior staffer to explain why it was the latest, greatest "value-added solution."

The staffing phenomenon I describe also has a lot to do with the above-average turnover rate for PR accounts, at least when compared to other professional service sectors. In short, clients hate being sold by high-level practitioners and serviced by junior ones. I hold little hope for this situation to actually change as long as the big agencies are the model for change in the industry. Since they contribute much of the money to professional associations working to advance the industry and supply a large portion of the industry's overall jobs, no one really wants to rock the big-agency boat. Sad, since we all suffer for it.