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O'Dwyer's Newsletter - Oct. 29, 2012 - Vol. 45 - No. 43 (download PDF version)


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PR OPINION ___________________
 

Hundreds of PR service firms are itching to help PR pros do their jobs better but much more information is needed about the firms so that PR people can make intelligent purchases.

Some of the firms are spending as much as tens of thousands of dollars to reach prospects at three and four-day PR conferences but the low renewal rate of the exhibitors indicates they are not satisfied with sales.(http://tinyurl.com/8pwjcz3)

While nothing can top in-person visits, conferences only last a few days while a web exhibit hall, such as theO’Dwyer “Find the Right PR Service” database(http://tinyurl.com/cev4fka) is open 24/7/365, is easily downloaded, interactive, and can be updated throughout theyear. Traffic is in the tens of thousands rather than a couple of thousand. Cost-per-thousand of reaching prospects is dramatically lower.

Basic Info Needed on Services

There’s almost no information on how the services charge such whether it is on an hourly basis, by project, orby monthly retainer. We know of no service firms that supply client lists.

Two of the most popular articles on odwyerpr.com are the “How to Hire a PR Firm” (http://tinyurl.com/yewzyse)articles by this writer and Fraser Seitel(http://tinyurl.com/9d4durd) author of the leading PR text,The Practice of PR.

Numerous corporate executives told us how they judge PR firms and Seitel drew on his experience as a client while working at Chase Manhattan Bank.

We will do research for such an article and hope that Seitel will too.

The service firms need a small board of directors who can work on definitions. The blizzard of often highly technical services being offered is daunting even to experienced PR people.

Kirk Stewart, now with APCO but then with Manning,Selvage & Lee, told the PR Services Council in 1991 thatPR firms want accurate estimates; ability to meet deadlines,truthfulness concerning their expertise and in reporting results, plenty of service, and high quality work.

Disclosure, Rankings Helped PR Firms

PR firms in the 1970s had started to grow rapidly as companies turned to them for creativity and media contacts.

Clients had a good grip on the ad agency business because the Redbooks listed thousands of ad agencies and Advertising Age published an annual ranking of hundreds of agencies.

The O’Dwyer Co., founded in 1968, immediately noticed that there was no directory of PR firms with basic information.

Our background was covering advertising for eight years on daily basis for the former New York Journal-American and Chicago Tribune.

We set out to duplicate what was available in the ad business, namely list agencies and their people and accounts and compile a ranking of PR firms.

There was plenty of opposition to disclosure but PR firms soon realized that openness was the key to growth,particularly when their competitors were thriving by doing that.

H&K Was Initial Holdout

An early holdout was Hill and Knowlton, which had a reputation as the biggest firm and which refused to give out an account list.

Since we belonged to the New York Financial WritersAssn., we had plenty of contacts in the financial press.

Reporter friends were asked to save all the releases sent to them by H&K or that listed H&K as the outside PRfirm.

H&K executives, faced with its clients being revealed one way or another, started supplying its list.

Although an early opponent of divulging information,it later became an ardent believer in supplying both account lists and financial information.

During the late 1970s and early 1980s, H&K’s account list in O’Dwyer’s Directory of PR Firms totaled nearly 500 and occupied nearly three full pages.

Not only that, it employed one of the Big Five CPA firms to attest to its net fee income and employee count.Costs for this were in the tens of thousands but were well justified in terms of status obtained and accounts won.

H&K was so dominant in the industry that it interviewed clients rather than the opposite. Its leaders shunned competitive pitches, saying they only raised client expectations to unreasonable levels.

H&K Dominated Counseling Industry

Blue chip corporate executives almost automatically picked H&K even though competitors were already on theH&K list. The rationale was, “We picked No. 1, what more do you want?”

H&K was sold to J. Walter Thompson in 1980 and was annexed by the WPP Group in 1987 when JWT was acquired by WPP in a hostile takeover.

Account lists no longer were published. H&K and almost all the other conglomerate-owned firms withdrew from PR firm rankings in 2001. More than 120 independentPR firms, including almost all of the major ones, continue to supply ranking data (backed up by top pages of income tax returns and W-3s) and account lists.(http://tinyurl.com/5zw2ta)

An early and enthusiastic participant in the O’Dwyer rankings was Edelman. It was far back of H&K in 1976with $3.25M in fees vs. $17M for H&K and $13M for Burson-Marsteller. As of 1988, Edelman was No. 8 with $31M and still far behind H&K at $145M and B-M at $138M.

Edelman, which broke out its fees in the12 PR specialties tracked by O’Dwyer’s starting in 1990, now leads in 11of the categories. Its overall fees of $604M for 2011 were five times as big as the next independent, APCO Worldwide at $120M.

Services Need to Organize & Report

The services once had a thriving group in New York,the PR Service Council, but it apparently got “too big for its britches.” The PR Society demolished it in 1995 by closing the exhibit hall for four years. http://tinyurl.com/9n4qpca

Were the services to follow the royal road pioneered by the PR firms in the 1970s, they would supply information on total number of employees, provide top pages of their corporate income tax returns, provide copies of theW-3 showing payroll and would reveal client lists.

— Jack O’Dwyer

 
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