:::renaissance chambara:::

Posts on quality, life, culture, the media, news & tech with a twist & a slice of Limey. I moved my blog to http://renaissancehambara.jp in December 2006, go there for the latest content.

Monday, August 28, 2006


Clients are from Mars, agencies are from Venus

I found this really interesting posting on Tim Dyson's blog. Dyson was discussing the problem that start-ups want to purchase PR, get the creme of PR talent working on their account and pay a pittance.

Andrew, apparently the CMO of a start-up posted the following comment (his text in italics, my own notation in normal text):

Tim has a great post on the multitude of start-ups with $10,000 to spend on a PR agency. OK, I'm one of them. It just seemed like such a nice round number to start with. Somehow it's crept-up a little bit though... Must fix that...

Tim is right (he is right on most things)... we all want PR pros. But I don't want $15,000 dollars worth of service. I don't even know what that is!

I want results. I don't care what it costs or whether an agency has to under or over service to deliver it. I just want results against the agreed budget.

You commit, I commit, we all commit together.

What is more troubling to me as a Valley CMO is:

1) finding a great agency is bloody hard work. They are few and far between. At any billing rate. Few CMOs I know get the value of PR or AR, let alone the value of a good agency... I accept we are part of the problem, but...

2) finding an agency that gets your business and has a real enthusiasm for contributing to the growth of the business - harder still

3) finding an agency that understands that great ideas get funded - near impossible. They are caught in the conundrum or belief that ideas require budget prior to being generated. Bullshit. (and I am talking about real ideas, not those regurgitated from the last pitch)

4) finding a team that can explain why they should get paid more and then associate some kind of outcome with the result - well, if you find them, let me know. The most common justification - "we've been over servicing your business for six months now, you need to pay us more" - is nuts. Nuts!

5) finding an agency - the word is a bit of an oxymoron. It implies some kind of powerhouse of ideas and execution - the strength of a team.

What you generally end-up funding is one very dedicated individual surrounded by some other folks - generally you aren't quite sure what they are doing but they all arrive for meetings and scribble madly into notebooks.

What is needed is a new kind of agency. One not built on billable hours and 10k budgets. Maybe one built on the power of ideas to drive a startup's growth curve? One with the courage and conviction to articulate a value proposition that resonates with the CMO of a start-up and ability to explain what the budget should be.

You see, we live less in the conceptual world of brand and reputation and more in the real world of qualified opportunities, pipeline growth and time to sale.
Until then, 10k sounds like a nice round number to start with. Agencies shouldn't let it end there. We will pay more. And I am willing to put my money where my mouth is.

This post was interesting for me as it highlights the huge gulf between clients and agencies:
  • Clients are only interested in 'transactional' marketing communications; PR can create awareness, but it isn't direct response in the same way that Google ads or the home shopping television is. PR creates awareness, anything else is a bonus
  • These companies often don't need PR, but instead a decent direct response marketing campaign, but PR is viewed as being cheaper and 10,000 USD is a nice number to fit into the start-up's business plan Excel spreadsheet
  • Clients want agencies to drink the kool-aid, the amount of time that I have been told that a client's offering is unique when it isn't; is staggering. Many times the differentiator that the company has, provides not benefits to the customer. Consultancies, in order to consult, need to be well informed and objective. Otherwise the advice that we give clients will be flawed
  • PR is often seen as a silver bullet that can solve a flawed product or an under-funded product. It can't
  • Between 80 and 90 per cent of start-ups will fail, consultancies know this. We know that you are likely to flame out, be sold in a fire-sale, VC funds will often 'merge' start-ups to try and save their dignity
  • We know that many of the businesses real product is the business itself. It often isn't about sales, its all about one sale to a particular target customer (Google, Cisco, Yahoo!, IAC, Microsoft: delete as appropriate) as you try and flip your business
  • About blind belief: I remember an agency that believed and took equity in its clients including Boo.com as part payment for its services. Its employees were given this equity instead of a pension fund. Not surprisingly the agency went bust and many of its staff got burned in the process
  • Brand isn't a conceptual element, however its not PowerPoint-friendly quantitative data that direct response marketing campaigns kick out. It's the reason why many companies include the value of their brands in the goodwill section of their accounts
  • Skilled PR practitioners cost money, this is due to demand and an exodus away from the industry during the last dot.com bust, in fact a good PR person is harder to find than a marketer because marketers are jack-of-all-trades but master of none
  • Whilst ambulance chasing lawyers will often work on no-win, no-fee; their more reputable colleagues bill on time and materials. Common sense would tell you to get the best lawyer that you can afford. PR is a professional service similar to law in this respect

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