One of the saddest days in my years as a PR agency owner was when we lost a startup client because our firm wasn’t a well-known brand name (similar to many other boutique PR firms). We had been working for this client for a relatively short time on a trial basis. We had been very successful in arranging some key interviews for the CEO and founder with internationally-known media outlets, including BusinessWeek, Fortune and Forbes. So it came as a shock when our corporate communications contact said they were going to contract with another firm.
It turns out the CEO had a friend who headed a larger startup. His friend had hired one of the biggest PR agencies in the world, and suggested that he use them, too. It would be a brand-building shortcut, he said. Our client had a much smaller PR budget than his friend, but he took the advice and brought in the big multinational agency for a meeting.
If you’re in the PR agency business, you can guess what happened. The big agency wooed our client at a meeting that included a couple of the most senior executives in their New York office. They charged more than three times as much as we did. On paper, their account team had several people, but in reality only one very junior account executive was ever involved. Never were the senior executives seen again. Our corporate communications contact at the company was concerned that the fee wouldn’t produce commensurate results, and he himself ended up spending much more time supplementing the outside agency’s work. (We heard all this from him.)
The large agencies say they offer certain benefits that they claim boutique PR firms can’t provide. They include a national and worldwide close-knit network of offices and expertise in every type of public relations (public affairs, crisis management, B2B and B2C PR, specialties in food, healthcare, technology and just about every other industry). They also cite the average years of experience their staff members have.
A close look at the benefits of using large PR agencies
Let’s take a look at those so-called benefits:
- National and worldwide network of offices: while the big multinationals do have national and international networks, there are certain caveats. In any network, some offices are stronger than others and some have PR specialties that others don’t. Yet the mandate at the conglomerate-owned PR networks is that when a client needs help anywhere around the world, if there is a network office available where help is needed, the account team must use that office. This is the case even when that office is not the best choice in that location. So when a client chooses a conglomerate-owned PR network, the client gets the strong offices AND the weak ones.
- The same goes for the wide array of specialties available from conglomerates. Most offices in a network have only a few specialties, and the conglomerates often claim expert services that are not readily available. They outsource those services to either a boutique PR agency or freelancers, sometimes without the client knowing.
- Close-knit network of offices: A big conglomerate wants clients to envision a network of offices where services are provided by one big family of employees, with the implication that they all know each other and are accustomed to working together. This is usually not true. When a client in New York needs help in Paris (or even in Pennsylvania), the New York employees have most likely never met or spoken to the employees in the other office before. The senior executives at all the offices may get together once a year, but the employees on account teams do not.
- High average years of experience– The average years of experience in a big agency may be high, but the number is skewed by senior executives who don’t work on client accounts or even supervise the work on accounts. The truth is that large agencies employ hordes of young people who work long hours and have relatively low salaries. That’s how they make the profit expected by their conglomerate headquarters.
- Minimum monthly fees are often a barrier– Another important fact about big PR agencies is they usually won’t work for companies that don’t have large budgets. Even midsize PR firms in the big cities will only take on new clients that can spend at least $10-15,000 a month.
Benefits offered by boutique PR firm networks
By participating in independent agency networks, boutique PR firmsare able to offer many of the same benefits (and in some cases better benefits) as large agencies.
- Freedom of choice of partner agencies – Each agency in a network of independent public relations firms, such as PR Boutiques International, is independently owned. There is no legal connection between the agencies in the network, except for membership in that network. It’s up to each agency whether to work with another agency in the network. Therefore, if an agency in London decides that an agency in Tokyo is not a good fit for a client, the London agency is totally free to use a non-network agency.
- Familiarity with colleagues in the network –In reality, the agency members in independently-owned agency networks such as PR Boutiques International know the other members just as well as people in one office of a conglomerate know people in other offices. The agency principals get to know each other at annual meetings, but also participate on a daily basis in a private online message board, and have monthly and quarterly network-wide teleconferences. Moreover, the network has an international subgroup of managers at member firms, so they, also, can get to know and learn from each other.
- Senior practitioners are heavily engaged in client work –At big agencies, senior practitioners are responsible for business development and spend an inordinate amount of time in internal meetings. Most of the time they have little or no contact with clients. At boutique agencies, on the other hand, the principals and senior managers do actual client work. Most boutique agencies are started by senior practitioners with PR agency experience who left bigger agencies because they wanted to get back to working with clients. The average years of experience on account teams is therefore quite high.
- Willingness to work with lower budgets– Most boutique PR firms will take on work that falls beneath the minimum monthly budgets of big and medium-size firms. Usually the hourly rates charged by boutique agencies are lower than at large agencies. This is possible due to lower overhead costs and no need to contribute a portion of profits to a big conglomerate headquarters. (A typical office of a big conglomerate contributes 25 percent of net fees to the conglomerate.) To a boutique, a new client with a $10-15,000 per month budget is an important account.
In short, big brand-name agencies have their place and are sometimes the best choice for an organization. However, they are not the best choice for those with modest budgets; those organizations are much better served by a boutique PR firm.