The CFO of a global PR agency asked me recently why it is that very few clients behave as if they really like the PR agencies they work with. His view was that it’s because clients are reluctant to share the credit when things go well and need someone to pass the blame to when they don’t. There’s more than a grain of truth in this, but I think it’s more complicated that that.
I’ve written before about how agency teams and in house teams are overly duplicative and this leads to tension. More than this, the way the client/agency relationship is traditionally structured lends itself to promiscuity. Trust is usually undermined in a promiscuous relationship.
It starts with the client demanding a three-month termination clause when negotiating a contract with a new agency. This suggests a fear of commitment. Then, unless the client has bought the account team’s entire billable hours, it has to share that account team with another client or more. An in-house acquaintance of mine once told me that she was convinced that the account team were giving their other client better headlines.
Meanwhile, clients that have just signed up with a new agency and expect the agency to invest in the long-term wellbeing of the relationship, continue to flirt with other agencies that would like the business. They have lunches and attend networking events and drinks receptions.
Agencies, too, play their part. PR consultants have a habit of believing that they know more than their average in-house client, are better connected and more creative and have an unfortunate habit of communicating this, especially to more junior members of the in-house team. And while this is unquestionably true in some cases, it’s not true in the majority and the agency will never have the inside knowledge or understanding of the business or the industry that their client team has. Any conventional relationship would suffer the strain of such a set up.
Many believe that, with the increasing decline of traditional media and methods of influence in favour of digital communications today, that now is the right time for a radical overhaul of the PR agency business model.
I believe this is true. The key question is what does it change to become? If I knew the answer, I wouldn’t have to work for a living. What I do know, however, is it has to work for both sides. Unless the agencies and their clients sit down to figure it out together, the answer will invariably be wrong for someone and the relationships won’t change.
But get it right, and the concerned CFO will be able to go back to worrying about profit margins and cost lines and start relaxing about the relationship.