Allow me to play Umair Haque for a moment and extend some of the thoughts jumpstarted by Mike Manuel’s excellent discussion of what he termed the ‘social media services gap‘ and the ‘social media services billing gap‘. I am in complete agreement with Mike, John Wagner, Jeremy Pepper and David Parmet when they note that it’s not about technology displacing solid approaches to PR.
I have decided this morning that I’m not going along with the idea that this is simply an evolutionary movement. I think there is a radical shift coming in outsourced communications services brought on by
- new tools and dispersed, on-the-fly team building processes
- new consumer expectations about attention and how companies should talk with them
- decreasing influence and strategy decay of the mass media that power the traditional agency model
- disappearance of the ‘gatekeeper’ value traditionally merchandised by PR shops
- the incongruence of the agency model with the need to meld strategy with tactics in the form of nimble teams that quickly work across a host of edges
- the inertia that must be overcome to retool large organizations to meet these new environmental challenges, and finally
- the increasing ease-of-use of media creation tools for video, audio, playlist creation, tagging, etc.
Umair, Jeff Jarvis, Scott Karp, Chris Anderson, Om Malik, Rafat Ali and many others are charting the strategy decay and subsequent contortions of tradtional media. What has not been as effectively mapped is the impact that decay has on other industries that are attached, remora-like, to newspapers, broadcast tv, publishing, and so on. Whenever we see a ‘new’ media approach from an advertising, media buying or PR shop, it typically involves shoe-horning some sort of branded message into a novel, tech-enabled channel.
“Let’s repurpose our ads for mobile phones.”
“Why don’t we make extreme ads to play inside video games?”
“Let’s make it easy to tag our press releases with delicious.”
“Let’s put out our releases via RSS.”
“How can we get our stuff into wikipedia?”
“Let’s do that wild posting thing with these mass produced flyers and our ‘street teams’.”
“Let’s get all the bloggers to talk about our new product launch.”
“Let’s do a blog for our [consumer product] using [some brand mascot].”
Not all bad ideas, but all misdirected and a bit ham-fisted because these organizations are built to be in the content business. They exist to develop and distribute messages. In the world of social media, content isn’t king. Connection is king. We are all bringing our own share of content to the party now, and companies have to play a much different role in the coming conversations about their products and services.
Note specifically that I’m mentioning the outsourcing of the services as undergoing this sea change. PR will be more important than ever. How you interact with the multiple conversational edges that impact your business will be huge. I think PR has the odd mix of analysis, synthesis and quick response skills to thrive in this new environment. But not agencies as they are currently constructed.
Here are my observations from being around all sizes of ad & PR shops for the past nine years:
- Agencies are economically rewarding for those who own them; most use their agency experience for training until they can’t ignore the opportunity cost to go client side or start their own consulting practice.
- However large the agency, there is almost always a small bomb-squad of talent that creates value across the agency accounts. Yes, you need resources for large production, etc, but when it comes to the core, creative things agencies do, it’s pretty much my ten against your ten.
- The profitibility of PR shops is built on charging you three times the amount they pay staffers; If I run an agency, I’m incented to sell off-the-shelf media relations programs that I can largely staff with junior workers, paying them roughly $30/hour and billing you from $100/hr and up. I also make money on the senior staffers I charge you a crazy amount for ($175 to $300/hour for), but it’s harder for me to keep those folks around, given their opportunity cost. Plus, the margins aren’t as great for me.
- Lots of shops also make money on upcharging you for services they sub out that you can much more easily source and manage yourself now.
- Agencies have always been self-conscious about how to demonstrate value for their outsized fees, which will only get more difficult as the business becomes less about creating content. They have less of a black box from which to pull ‘proprietary’ stuff.
- The beasts need feeding. This could be a whole post, but at some point, the boutique firm you loved as nimble and innovative gets a certain mass and has to start acting just like all the other large shops — taking on shlocky work, underpaying staffers, mailing it in on certain accounts, etc. It’s not the people, it’s the model. (No, I don’t ultimately think Crispin will be different. God love em.)
“No, way,” you are saying. “Edelman has a blog. They hired Phil Gomes and Steve Rubel. Weber hired Jeremy. MMW has Tom Biro. Constantin Basturea went to a big shop, too.”
Great. I think the world of all these folks and their chops, but they are still isolated specialists within much larger organizations. People don’t scale, and, as I’ve said, the economic model of these agencies precludes them from searching out and hiring 20 Phil Gomes. Much more likely that a Phil Gomes will go off and find five folks like himself and trade on his big brand knowledge to help a smaller client roster find its footing when it comes to social media. (I’m just speaking hypothetically here. As far I know, Phil loves his new digs.) He can also do that faster and more effectively outside the firm, even than if he operated as a startup within the agency structure. As Edelman left Syndicate the other day, he noted that he was on his way to a meeting to stir things up. Only about 15% of his staffers were into social media, he said, and that was just too few. I liked what he had to say. I just think he has an uphill battle to remake his company.
It will become increasingly difficult to sell ‘access’ services. Access to media buyers & publishers, access to journalists and analysts, access to company spokespeople. (You know how agencies tremble when the clients ask for their media lists?) In our new world, people are increasingly accessible. Already, savvy startups are doing DIY PR via blogs and direct communications that is effective for their early stage needs. There is a whole other post to do on community marketing, and I’m not trying to touch that here.
Instead, communication people will come to be valued by how they improve conversations. Not start or manage them. Improve them. Plus them up. That will take a more seasoned practitioner working in closer concert with internal folks. Thus, I think the tendency will be towards smarter communication directors and managers rolling their own teams to form ad hoc social media bomb squads, and outsourcing very specific ad creation skills (and not strategy & messaging) to ad shops. (This is the Sergio Zyman approach.) Already the market for making elaborate :30 films and holding on to the expensive talent this archaic activity requires must be seeing strains. If not, it will.
In a YouTube world, speed, savvy and responsiveness of our communications (video included) will trump high-production values and the fantasy of a tightly integrated campaign.
Even scarier, imagine trying to salvage a business based on delivering content and allocating attention through a proprietary channel:
- PR Newswire
- Satellite Media Tour Companies
These guys are doomed in a hyperconnected, niched world, the same way that trade media are unless they remake themselves. That world isn’t here today, but it will be. What are you doing to get ready?