In our last blog post, a panel of PR Boutiques International (PRBI) agency executives weighed in on trends in PR technology and fake news. New technologies have led to significant changes in the public relations profession and the PR agency industry. These include changes in communications strategies and in how PR agencies meet clients’ needs and market themselves.
Shifts in the Balance of the PESO Model
PESO stands for paid, earned, shared and owned. Public relations is not synonymous with media relations. Social media and digital marketing have shaken up PR and traditional marketing; to be effective, PR programs need to look to the PESO model, a blend of communications approaches.
Paid media includes advertising, “sponsored content” (previously called advertorials) and other paid media coverage. Earned media is the outcome of media relations – media coverage created by independent third parties (journalists and bloggers) that is not paid for. Shared media refers to social media content and distribution. Owned media is content created and distributed by an organization, such as its website, blog, newsletters, annual report, etc. For the last six or seven years, PR has been a blend of paid, earned, shared and owned. As we enter the 2020s, how is the PESO model holding up? Is there a trend towards more paid, shared and owned media and less that is earned?
Judith Huss, founder and principal consultant of Huss PR Consult in Münich, says, “Whether we can see a trend toward more paid content depends on the media sector. In working with bloggers there is certainly a trend toward paid content. Usually they offer a whole package of paid content, including blog post, Youtube video as well as Facebook and Instagram posts.”
In the business-to-consumer (B2C) sector, she added, that package can be complemented by consumer promotion using blogs and social media. “This is not new, and it is expected with consumer products,” she says. “But now I see the same trend with trade blogs in the digital market space, such as blogs in IT and blogs written about the net economy. This is new to me.” When talking to journalists at top national and business media, “whether your story is relevant to their audience is what still counts,” she remarks.
Susan van Barneveld, APR, president of Copernio, in Los Angeles, says, “We are seeing an increase in paid content in everything from consumer brands working with influencers to business-to-business (B2B) companies paying for publication of white papers and articles. This is a key area where the lines are being blurred between public relations, advertising and marketing.”
She adds, “Who should be responsible for the budget for paid content going forward will be a hot topic of discussion in many companies.”
For years, PR agencies have reported that clients have overly high expectations for earned media coverage. They have resisted the fact that opportunities for earned media have been decreasing, due to the decline of the print media and layoffs of thousands of journalists. (Pew Research Center did a study on U.S. newsroom employment which showed a 25% decrease in the 10 years between 2008 and 2018.) Joy Scott, president and CEO of Scott Public Relations in Los Angeles, says that B2B paid content is increasing because companies and agencies are now facing the fact that sponsored content is essential in their marketing today. “Trade media continue to shrink, and obtaining earned media for B2B companies is increasingly challenging. At the same time, conferences and publications alike depend increasingly on sponsored content for revenue, and just about every B2B media outlet offers multiple options that, except for the notation, ‘sponsored content,’ look like editorial.”
As for owned media, Scott says, “Brand journalism – how the company tells its own story – is picking up the slack from decreasing amounts of earned media. Fortunately, executives as well as communicators now understand the importance of content creation in different formats and channels – video, print, audio, events, social media – and are taking on this challenge.”
Fred Russo, executive director, Botica Butler Raudon Public Relations in Auckland, New Zealand predicts that in the corporate PR world, earned and owned will remain the most potent parts of the PESO model. “However, consumer PR will rely more and more on paid or sponsored content – consumer PR pros will really need to up their paid content game in places like TikTok and WeChat. Corporate and reputation-based PR will still rely on sound strategy, consistent messaging and good old media relations.”
Scott adds that the “shared” component of the PESO model is also expanding. In addition, she comments, “Sharing information jointly through partners – via social media, joint earned media, speaking events, and even sponsored content – will expand as firms learn the value of sharing their platforms and their communication channels.” She says that targeting influencers who are thought leaders, not promoters, are another growth area. “In these relationships, both parties can benefit from getting their message out on more forums, and with greater impact due to their involvement with credible partners,” she remarks.
Emerging trends in public relations business development
As new technologies have gained a strong foothold in content distribution, boutique PR agencies have adjusted, and are optimistic about their new business opportunities, according to several PRBI members.
Says Barneveld, “We are seeing an increase in the number of companies looking for integrated marketing communications. Clients are becoming aware that all facets of marketing need to work together and do not exist in silos.”
Ellyn Caruso, principal, CarusoPR in Chicago, also sees an uptick in opportunities for boutique PR firms. “Boutique firms can bring top talent and strengths to the table that were once reserved for the big agencies,” she says. “Mid-to-large size organizations are discovering that boutique PR firms’ top differentiator is hands-on senior-level practitioners who drive successful results, often working with a relatively tight budget.” She explains that clients are drilling down on data-driven objectives and want PR to play a larger role in business marketing strategies. She adds, “In general, PR firms offer a fuller range of communication tactics, providing a broader platform to better meet the demands of stakeholders than the more narrow service agencies that focus predominantly in one area only, such as social media, content or influencer marketing.”
Russo is happy to report, “We’re seeing a reversal of the ‘one agency to rule them all’ model.” Larger clients are swinging back towards boutique agencies with specialized skillsets, he notes, instead of looking for broad skills all in one place. “The ability to play nicely with others, and build a reputation that says you do, delivers advantages in today’s market,” he comments. “On the other hand, competition remains tight. At Botica Butler Raudon Partners we’re still regularly asked to provide free creative or spec work. It’s a problem the industry still hasn’t fixed, and we don’t have a great solution, either!”
Lynnette Werning, founder and president of Blue Water Communications in Bradenton, Fl., says her experience echoes Russo’s in the value of specialized skillsets. “When I got into the agency world in the ‘90s, most agencies were generalists. When I started Blue Water Communications in 2006 about half our clients were museums and half were ‘other.’ In 2014, at the suggestion of a PRBI colleague, we narrowed our focus entirely on museums, architecture, performing arts and destinations. We resigned our other accounts. Since then, our business has grown exponentially. In the last two years our income has grown 72% and we have acquired eight new clients in our niche. Most of our new business now comes by referral, an unexpected bonus of clearly defining our area of expertise.”
This post and our last one show how PR trends are intertwined. Technological change at a break-neck speed has benefitted boutique PR agencies in some ways: their size and lack of bureaucracy give them an agility advantage over bigger agencies in adapting to changes. The new technologies have led to downsizing of traditional print media, which in turn has caused significant shifts in how content is being delivered by marketers. Traditional PR’s focus on telling stories prepared PR agencies with skills now needed for creating high-quality content.