PR DOES Drive Sales…

Last week, Forrester senior analyst Jeremiah Owyang, a prolific and astute observer of web strategies (and someone whom I hold in high esteem), posted a link to a new, sobering USC Annenberg study on the state of the PR agency business. (It dovetailed well with the Council of PR Firms’ own look at the state of agency affairs.)

Anyway, at the end of his analysis of the USC report, Jeremiah concluded that today’s buyers of PR services have the upper hand, and thus offered the following suggestion:

Buyers Should Renegotiate PR Contract This one is going to raise hell with PR professionals, but if you’re a buyer of PR agency services, you should renegotiate your fees and contract at a reduced rate. The market simply has changed, and as with every other industry, demand and supply, cause changes. Now, this isn’t to suggest you cut rates and lose the quality of service you’re getting, but figure out what areas the firm is not providing value and reduce those services. On the other hand, you can try to increase your budget with these firms, and ask for services greater than you could have afforded in an upswing, now that you, as the buyer, are in clear control.

Well, it did raise an eyebrow (or two) with this PR vet prompting the following comment:

Jeremiah, As you surmised, it is the last item (recommendation) with which I take issue. Overall, the study does not deviate much from what we’re hearing in our industry (and many others). But the notion that companies should renegotiate the terms of their agency engagements doesn’t make sense given that fact that public relations, of all the marketing disciplines, has always been the most efficient spend.

In fact, I would recommend that CMOs re-allocate a greater piece of their marketing budget to PR during tough economic times. They may just be surprised at the increased ROI.

Peter Himler
Flatiron Communications LLC

Being the good analyst that he is, Jeremiah responded by asking me to back up my assertion with metrics. (He also complimented my blog):

Peter Himler

Can you back up with data that PR is the most efficient spend for marketers? I know (from research) that marketers are most focused right now on qualified leads.

PR doesn’t always provide leads, in fact that may not be the primary reason to hire a strategic communication firm. Respectfully, I’m standing by my recommendation as I know I can back it up with data.

BTW: I dig your blog, good topics

I replied as follows:


I can’t provide specific data to back up my assertion that PR is a more efficient spend than other marketing disciplines. I can only draw on my professional observations on what fee a BBDO might require to mount a national ad campaign versus what its sister agency Ketchum may need for a comparable PR campaign, i.e., seven or eight-figures versus six figures.

I can’t say the same for online marketing where the disparity in fee structures from agency to agency is not as severe. So perhaps I should have qualified my statement to say that traditionally PR has been more cost-effective marketing discipline, but in the digital and social media realms, all bets are off.

We thus reached a consensus, sort of:

Peter, That makes sense, I agree with much of what you clarified.

I will say that PR is a great solution if your objective is awareness, consideration, influence. However, I’ve yet to see proven numbers that indicate that PR directly drives sales, conversions, and leads each and every time like advertising, webinars, and sweepstakes.

With that said, lead generation activities would perform poorly if they don’t have activities driving awareness, consideration, and preference.

They all work together.

I say “sort of” because I believe that PR most certainly has the capacity to drive sales, conversions and leads. Having judged my share of industry awards, I’ve seen case study after case study whose metrics support this conclusion. Maybe one of my readers would care to contribute to this meme on measurement? KD Paine?