EschermanOne of those questions that journalists have hated since the dawn of time – and still do. Depressing that the practice still seems to occur with such alarming regularity. A useful reminder here, courtesy of Strumpette, of the reasons why it was and is a bad idea to ask a journalist whether they got your press release.
While perusing Glyn Moody’s fine blog on all things open source, I chanced upon this little item.
As Glyn says, "this insightful presentation
by Brent Williams, a self-styled "(temporarily) Independent Equity
Research Analyst" is unusual because it manages to combine a good
understanding of the open source model and world with some grown-up
economics."
It was the section on the economics of software as commodity that set me thinking about the parallels with the PR business. Talking of commodity markets generally, Williams says:
No switching costs to buy from a different
producer (other than the notice period, there is no cost involved involved in firing an agency).
Market prices are a function of changes in
supply and demand -producers can’t affect demand, only supply. (Hence during the dot com boom, agencies could hike their prices due to demand – but can’t stimulate demand in a shrinking market)
Pricing moves quickly to find a point of supply/demand equilibrium (hence the average day rates of agencies are falling – even if agencies try to keep them high, overservicing to satisfy client demand brings down the real rate)
“Excess” profits quickly disappear and producer profits revert to the mean of the economy as a
whole (which is why PR agency profitability is generally very low)
Lowest-cost producer wins in a commodity marketplace, because they can sustain “excess”
profits longer than all other producers. (Except with commodity PR, the biggest cost is people. So trying to squeeze costs on staff ie get them to do more for less, leads the well documented issues of morale and lack of quality personnel).
And given most agencies are operating in commodity mode, then the long term outlook for most of them is not exactly rosy.
You may notice a new widget in the sidebar – namely a poll courtesy of Vizu.
Thought I’d pick something anodyne just to test it out. On the surface, Vizu seems quite a neat concept – you can easily create online polls and get some basic analysis of the results such as by gender, geography, etc.
I’m sure it won’t put the big research firms out of business overnight – but at the low end (and lets face it, how many press releases have we seen based on survey results of 100 or less), another example of how the Internet is commoditising certain sectors.
You wouldn’t want to be Andrew Rollerson, head of Fujitsu’s Healthcare Consultancy Practice, today – he appears to be in hot water over remarks he allegedly made at a conference last week regarding the NHS’s National Programme for IT. (Latest – the Daily Telegraph has very helpfully published his presentation slides here. Nice use of pictures as opposed to the usual PowerPoint text bullet overkill – though some may question the use of female mudwrestlers to illustrate a point).
Fujitsu is one of the key IT contractors on the project – £896m to be precise to supply systems in the South of England.
Tony Collins at Computer Weekly is of course having a field day – full story here. With a further twisting of the knife here.
According to Collins: "Rollerson, who is responsible for the delivery
of Fujitsu’s healthcare professional services, said there was a
"gradual coming apart of what we are doing on the ground because we are
desperate to get something in and make it work, versus what the
programme really ought to be trying to achieve. The more pressure we come under, both as suppliers and on the
NHS side, the more we are reverting to a very sort of narrowly focused
IT-oriented behaviour. This is not a good sign for the programme."
The CW piece goes to quote Fujitsu’s official response: "We refute any inference that Fujitsu in any way questions the success of the National Programme."
I leave it to you to decide whether Rollerson’s alleged comments could be interpreted as casting doubt on the success of the project….
I have never had Xanax 1mg side effects except for the fact that it is hard to get up in the morning. It helps me very well, because I have to go to bed at night. I don’t wake up at night and sleep fine. I am not nervous.
UPDATE: Now Information Age have picked up this too.
FURTHER UPDATE: Duh – its all over the nationals too The Times is here, the Telegraph here, and the Daily Mail here.
Something tells me this one isn’t going to lie down.
Tom Foremski posts on a recent conversation with ex-Sun PR man Andy Lark here.
Readers may recollect Andy sparked some discussion last August with his question about what you ought to pay a PR agency.
Clearly Andy did find an agency that satisified his criteria – the bad news for them now is that – according to Tom:
"Andy told me he recently
noticed that he was starting to spend more money on buying Google adwords
than on PR. And when push comes to shove, I know where most companies
will put their money. You can pin a ROI on GOOG adwords that you can’t
with PR. This is a very significant crossover point. It represents one of the
many threats to traditional PR. And there are many PR agencies that
only understand the old approach, no matter what they say about
new/social media. There is a disconnect in the PR world that is going to hit that industry hard."
Nick Carr has also been riffing on the meme of how IT automation is removing not just low skilled jobs:
"(This) provides an eye-opening account of what happens when business,
and in particular media, moves from the physical to the virtual world.
For those who might be hoping that the decline in jobs in traditional
media will be offset by growth in employment in digital media, the news
is not good:
One chart shows the combined categories of publishing
and broadcasting, both traditional and Internet-based. Over all,
employment is down 11 percent. In those six years, employment in
traditional paper-based publishing is down 13 percent. Broadcasting
employment is off 3 percent. The traditional industries, between them,
have shed 148,000 workers.
Did the Internet make up the difference? Just the opposite.
Internet publishing and broadcasting now employs 36,600 people, and
that figure is down 29 percent from six years ago. A larger
Internet-related area covers Internet service providers, search portals
and data processing. It now has 385,000 workers, down 25 percent over
the last six years."
Couple this with Nick Carr’s view on the growing inequality in wealth. And his obvervation that:
"The next wave of "superstars" may be algorithms – and the small number of people that control them."
And what does this mean for PR?
First – the vast of majority of work currently done by PR agencies will be automated to the point where it will be pointless hiring and agency to do it (the fact that many agencies barely make a decent profit now is an indicator of where things are already heading).
Second – pace Tom Foremski – there is a growing gap between what client companies value and what PR agencies offer.
Third – traditional PR skills will need be combined with a level of online marketing and technology skills that most trad agencies don’t possess
Fourth – the large agency PR model will become economically unsustainable
Fifth – the PR industry has no valuable algorithms
OK – there maybe a little exageration here – for example, somebody making a living out of doing trad PR is likely to carry on doing this for a couple of years yet – but sooner or later – as per Nick Carr above, unless you have the skills demanded by clients (and they will be asking for it if they haven’t started already), you may find yourself trying a new career path.
World’s Leading is saying the Incisive Media has acquired VNU’s UK assets. More to emerge shortly no doubt.
Our old chum the World’s Leading blogger has posted on how a certain PR agency has treated a freelancer regarding late paying of invoices.
The comments thread is worth a read – aside from the specifics of this particular case, it does raise the general question as to why PR agencies are rubbish at paying and getting paid.
With regard to the above example, one strongly suspects that the reason the agency has set its payment terms at 60 days is because they themselves are hopeless at getting paid by their own clients.
That said, I realise that bigger organisations tend to demand longer payment terms from their suppliers – 90 days is not unheard of. But this should be a point of negotiation before work even starts – if the client wants 90 days credit then what other aspect of the contract might they relax on eg termination period. Once again, it seems most agencies just roll over because they are scared.
On a related subject, I’ve always been amazed by the "cult of billing" that exists in most agencies. The directors and account directors that get the biggest praise are those that have invoiced the most – but I would wager that in many cases, if you examined the recovery rates of these big billers, you’ll probably find they have the clients that take the longest to pay. Issuing an invoice is easy – getting paid on time is a different beast entirely. A director crowing about how much he has invoiced is also probably the one who is costing the company dearly in bank interest because his clients pay on 120 days or more.
In the end, there are two very simple reasons (usually) why clients don’t pay – because they are unhappy or they are in financial difficulties. Or we can add a third where it is an unwritten company policy to find "issues" with an invoice to delay payment. PR expenses bills are the usual victims – if you’ve got a number of line items, the classic client trick is to query one small line item that holds up the whole bill. Best way to solve this is simply remove the item and re-issue – because you’ve now removed the apparent disputed item – it also helps to see who is doing this for genuine reasons and those that are simply doing it to use the agency as an unofficial bank.
Some interesting pointers here.
Not least this one:
20. The Folly of Accountabalism
David Weinberger
Accountability has gone horribly wrong. It has become “accountabalism,” a set of related beliefs and practices that bureaucratize morality and make us believe we can control our lives by adhering to specific rules. But grown-ups prefer clarity and realism to happy superstition.
Tim Dyson has posted on how doing PR for Microsoft Vista is a bit different to Windows 95 this time around.
And Tim should know. Microsoft was a very early client for the fledging Text 100 in the mid-80s – and they’ve never gone away.
However, I was rather intrigued and amused by the following passage:
"If you think about Windows in this way you realize that the comms challenge with Windows is quite unique in technology terms. Indeed the challenge could be likened to that of an aging rock star that is trying to attract a new generation of admirers. It’s a tough trick to pull off but some manage it and I for one wouldn’t bet against Microsoft even if Vista hasn’t got off to the high profile bang it did when it scored it’s big hit in ’95."
Aside from debating, the claim that the PR challenge for Windows is unique, lets have everyone’s suggestions as to what ageing rock star Vista could be compared to. And lets have no mentions of getting big, fat, bloated and complacent in either context please.
Nick Carr’s post on pay per view journalism has sparked some interesting debate. It set me thinking that maybe this is the way PR could go ie pay per view on press releases.
For example – when you post a press release on Daryl Willcox’s Sourcewire, you can see how many views each press release has received – will we see the day when agencies will be paid based on the number of views a release gets?
Of course, there are a lot of caveats here – not all views of the release will be from bona fide journalists (indeed, many of those page views will be from rival PR agencies checking out the competitions’s press release – or if a release gets "Dug", then you will have a lot of non-relevant punters looking at it).
But I don’t doubt that some form of this model is going to be increasingly demanded by clients. Then again, as we all know, measurement determines behaviour – so for journalists and PRs who would have to live by this approach, you will no doubt see people using terms and phrases that will help increase "viewability" – rather than relevance or accuracy.