12 Feb The Value Conundrum and Why it Threatens PR
Image credit: EasyScienceExperiments
The monotonous ‘PR is dying’ meme has been covered to the point of tedium and is something I’ve been highly dismissive of/ranted about in the past. I’m not about to change my mind on that any time soon, but I read something last week that got me thinking and has stuck with me. Jed Hallam wrote about the differing perceptions of pricing in the PR and advertising industries, and how the latter can far more easily garner large budgets for social and digital media projects as, quite simply, clients are used to spending more money with advertising agencies.
This makes complete sense to me, and is the first time in a very long time that I’ve read a reasonable argument about why some (not all) PR agencies are under threat. The psychology is important here, and Hallam references Johan Lehrer’s book ‘How We Decide’, and Lehrer’s assertion that the distraction of numbers gives us a twisted view of the value of things. Essentially he says that regardless of the actual value, the more something costs, the greater the value we perceive it has. So with that in mind, think about it for a moment: if Brand X is used to paying its PR agency £10k per month and, due to media spend, its advertising/marketing agency £250k per month, which agency is it more likely to feel comfortable spending £100k with for a social communications project?
The Value of Results
Not only is the marketing agency more likely to get the project in the first place due to a higher perceived value, but very importantly, it’s more likely to get a larger budget. And with more money, the marketing agency has more scope for creativity and more time for comprehensive implementation. Which should mean it achieves better results than the PR agency could have done if it was struggling to achieve the same thing on half the budget.
That, my friends, is a vicious cycle. Advertising agencies have already started to hire people with a PR mindset to help them secure this type of business, and if/when that cycle catches it will be very difficult, if not impossible, for PR agencies to halt. And it throws up a challenge for the PR industry as a whole: to start proving the value of PR in a digital marketing context. It’s something we’ve discussed recently within the PRCA Digital Group, for which I’m a member of the steering committee. Traditionally PR has been fighting a battle to demonstrate that social media can fit within the realms of PR, but now advertising and marketing agencies are bringing the fight to us and taking us on on our own turf. It’s time for the PR industry to step up a gear. And if we don’t, advertising and marketing agencies will start to steal our lunch.
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Posted by Paul Sutton
