Posted by Amanda Chapel
One of the world's leading experts on business and economic theory, Martin Turnbull of the renowned Kepler School of Management, today released the findings of a 5-year study of the PR Business. Titled "The Image Industry, Public Relations at a Flashpoint," the 62-page study is already being touted by experts as "the" seminal work on the current state of the Industry.
The study includes interviews of key insiders at some of the Industry's top firms. Included in the study are: Fleishman-Hillard, Weber Shandwick, Hill and Knowlton, Burson-Marsteller, Edelman, Porter Novelli, Ogilvy PR, Ketchum, APCO Worldwide, Manning, Selvage & Lee, Ruder Finn and Golin Harris.
Turnbull denied that the timing of the release was at all related to the recent Economist article, "As advertising struggles, PR steps into the breach" (Jan 19th 2006). But Turnbull said, "I was shocked at The Economist as were a number of my colleagues. The article has turned out to be the consummate PR puff piece; and considering what's at stake, that's dangerously misleading."
According to the study, American business is reallocating its advertising and marketing spend at an alarming rate. The study warns that in light of recent developments on the Internet, business is taking a huge and very risky gamble on Public Relations.
Turnbull forecasts that the Industry will likely experience 30-40 percent correction in the next 8 to 12 months.
These conclusions are based on several key factors Turnbull refers to as "the perfect storm."
Here, as I've read the study, I'll try to briefly summarize and provide commentary as to some of more salient points. Note, a good portion is just lifted directly from the study.
Chapter 1: What PR sells and what the buyers expect has become totally outmoded for the "Web 2.0" revolution. The business of PR is stuck in the 90's.
Media relations and publicity are still PR's #1 sellers and account for the lion share of the Industry's revenues. But, however successful these tactics were in the 90's, today they're not. Their effectiveness to deliver a message has almost totally eroded.
Bottom line: the key success factor was control. "We craft(ed) messages; and we manage(ed) their distribution" is/was the general premise. But today the audience is so fragmented they cannot digest anything that would rise to "crafted." In fact, "crafted" is likely flat out rejected. And the idea of "managing the message" today is unrealistic.
Why? Turnbull contends that the nature of the marketplace now is chaos. PR firms, my present employer included, try to tell you we're on top of it. Fact is we're not at all; and if anyone tells you they are, they're lying. Fact is chaos cannot be managed. It's like herding cats. That's why it's called chaos. Clients are coming to realize that their "PR Investment" is no better than a Vegas gamble where odds are you're taking the bus home busted. How have we forgotten the tech bubble?
Chapter 2: In chapter 2 Turnbull expands on the chaos factor from an internal perspective. He says that the PR Business Model centers on the expectation of some internal cohesion. There is an unwritten expectation that "the organization marches together." Today, that's a myth. The Virtual World is more like the Natural World. In the Natural World, for the cheetah to eat, his modus operandi is simply to separate the young and/or lame from the pack. Mother Nature made that easy. This is becoming the dominant approach to competition and PR is not set up presently to accommodate it.
Chapter 3: The PR Model is built on the presumption of power. In the past, BIG-ness was used to suppress small. Now Big has been rendered powerless and small is nimble and more than likely destructive. Bottom line: Bloggers by-and-large have nothing to lose. They gamble exclusively at your expense. That's unbeatable.
Chapter 4: The PR Model is built on expectation that "brand" is relatively stable. That's no longer true. Old and established brands are but dried kindling. And the bloggers? They're by-and-large kids with their own made-up rules in the backyard collecting shiny things and burning ants with magnifying glasses. Some have been known to steal their parents' matches. Excuse me but that smoke you smell is your house!
Chapter 5: On the Net, the loonies are running the asylum. The hierarchal character that was business had its functional benefits. Theoretically at least, it is an organization's version of "survival of the fittest," i.e. the stronger rose/rise to the top.
But on the Net that's all changed. Some profess that "True Power Lies in Being Flat as a Pancake." Blog celebrity Steve Rubel openly questions, "Who is a corporate spokesperson? Is it any employee who blogs, the CEO, who?" From a boardroom perspective, that's just plain lunacy. And once that control leaves the hands of those that actually know what they are doing, those that actually have a clear and mature understanding of shareholder value, it's over. Once that genie gets out, it's near impossible for companies to put it back in the bottle without resorting to fairly dramatic, draconian and most of all costly measures.
Chapter 6: PR fostered the perception that the more money one spent on a campaign, the more the results. Today that's pure-dee donkey dust. Ten years ago, a $100,000 dollars spent would likely have increase the effectiveness of a $50,000 PR campaign by a factor of 2. Today, the market is dramatically more dynamic and fluid. As such, PR, a business renowned for its elusiveness and immeasurability, is now a total crap shoot. (See Chapter #3.)
Chapter 7: The channel(s) PR targets and into which they ply their trade are totally polluted. Broad general access has made it nearly impossible for the message consumer to differentiate between good, bad, real or fake. Add to that the net is indelible. The tyranny that is Google is that garbage has a better than even chance of being quoted.
Chapter 8: With broad info access, PR has totally lost its claim to expertise. Communications is essentially common sense. As a result, the once consultative "profession" has been reduced in most cases to a base task-oriented corporate assignment. When one adds the paper-thin margins in the industry presently, the result is little creative and hugely inflated service pricing. Nothing worse then getting nothing for your money then having to pay twice as much for nothing.
"The Image Industry, Public Relations at a Flashpoint," is one of the more insightful things I've ever read regarding our industry. It is far too broad in reach to draw simple conclusions here. I am sure it will be discussed for years to come.
Personally speaking, after having read it, if I were a CEO, I'd probably fire my PR firm directly. I'd issue a company-wide restriction on all things blogging. I'd spend less on anything "spin." And I'd look at the market chaos as an opportunity to exploit my competitors' weakness.
Something to think about.
- Amanda Chapel
PS Special thanks to Nick for the lead. Note to readers: More like these please!
Strumpette: the comeback
Hey, welcome back Strumpette. Your summary of the train wreck that is now PR was superb. There has to be a future for all those communicators but reading your post, I am finding it difficult to know what it might
Tracked: Apr 03, 16:46
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Mmm: here's an ally for Tom Foremski, it seems. Having trawled through a couple of Google searches using variants of "turnbull", "kepler" "flashpoint" etc, I can't locate this magnum opus. Any chance of a link? (BTW -- really like the blog. . . )
David, I am currently working with the Professor to fulfill the requests for the study. There have been many as you might imagine. Unfortunately, it is only available in hard copy and is being selectively sent out to various business and financial editors at this time. If you send along you mail address, I will try to get to it sometime next week. - Amanda
Thanks, Amanda. Seems a little strange to me, as did a few aspects of his article, but maybe the original will clear those up. Mailing address is 35-41 Folgate Street, London, E1 6BX. I'm not sure what to expect in the post ... Like your blog by the way. Mostly. Thanks again.
Think for a second about what happens when you add all of Turnbull's conclusions to the underlying issue that few in the business seem to want to discuss -- the billing model. I think nearly every corporation's relationship to large PR agencies ultimately smashes into the rocks over this question: "Are you bringing me this idea because it's good for my business, or because you want to bill me more hours?" I think the billable-hour model is likely to die out, just as the standard 15 percent commission model died at ad agencies.
Juxtapose the chaos of the marketplace and the PR industry's inability to figure out how to handle that with the industry's broken business model, and the prospect of fundamental change seems inescapable.
My God, what a comeback.
Welcome home Amanda.
PS Do you have the right to reproduce that picture?
I am far from an attorney but I am confident that this would surely pass a fair use test. - Amanda
Pictures are different than text. Fair use doesn't apply. You don't have the right to reproduce it.
Well, whoever you are from CMP Publications Inc., you are wrong. It is not as simple as you infer. There is a 4 point test for evaluating "Fair Use." This passes. That said, I do appreciate your concern. Ciao, - Amanda
This is an important aspect of copyright that you seem to be ignoring:
"Take not from others to such an extent and in such a manner that you would be resentful if they so took from you." If you drew that "economist.jpg", and I pasted it at the head of my next blog post, what would be your reaction, Amanda?
"Attribution does not always make use fair, but should always be provided." There doesn't seem to be any attribution for the creator of the "economist.jpg" that you used.
I like your creative organization, Amanda, but it's sad to see you get huffy when people are kindly pointing out that you may be in violation of someone else's copyright. How hard would it be for you to obtain permission, or at LEAST attribute the work? If Turnbull himself drew the picture, then I can see how you've implied attribution, but otherwise, it looks like unattributed "stealing", plain and simple.
Author of "Inside Market Research"
(P.S. Before you check out my site for ammunition, I stand by the images on my blog as being: used with permission, used for the purpose of parody, or being re-used as the product of a public relations campaign where the original authors would be delighted to see more exposure for their product. I hope.)
Gregory, I don't mean to put too fine a point on it but you are wrong. I wish I had more time to discuss it but I don't. Google "Four Factor Fair Use Test." Good luck. - Amanda
Amanda - Where is this "renowned Kepler School of Management" - never heard of it and Martin Turnbull either? Seems really fishy. Can you tell us what academic institution this Kepler School of Mgmt is affiliated with?
I'm sick of this bullshit about PR supplanting advertising, which Al Ries wrote the book on. There's PR and there's advertising, just like there are hammers and screwdrivers. Different task, different tool. PR doesn't "brand"; advertising doesn't "announce". A plumber doesn't install your carpet; your meter-reader doesn't tune your engine.
Thank you. GREAT and informative!!! I would have missed that article entirely.
And chuck is right about the billing model for PR. Especially when flat billing rates are a ripoff because they staff teams with junior (read: just out of college) people who you pay as much as you would a senior VP. And tiered billing doesn't work because you pay overhyped dunderheads $250 an hour when they essentially delegate the work to the junior folks anyway.
Thanks to the move toward independence made possible by the net, you can get folks who used to bill you $250 who are now out on their own, or in loosely-joined association with other independent ex-agency vets, for less than half that. Same know-how, same tools, same talent, same processes. Different address.
Jeneane (you know I like you but...) I think you're using a broad brush to paint that picture. For example my firm uses flat rate billing and are NOT the type of firm that assigns the bulk of the work to junior reps. (Nor, to my knowledge, do most boutiques or mid-sized independents.)
Just as importantly, to your point that loose affiliations of ex-agency reps have "the same tools" - that may be the case in terms of what's in their brainpans, but, our agency (small by Edelman standards!) spends "half-a-gajillion" dollars on all sorts of tools and services that allow us better, faster, up-to-date info on the media. And those loose affiliations of agency vets, by the way, often hate doing the scut work that our junior staff does (and which clients demand).
Lastly - to Ms. Strumpette - pls put me on the list to receive this report... thx!
Your comment that much of communication is common sense pegs the current attitudes that many of us have been intuitively feeling, and danced around, but hadn't said it as clearly as you did in this post. The chaos of all of the current mediums has made it nearly impossible to keep track of the message, let alone measure results or research message impact.
The notion that anyone is the corporate spokesman is pure rabbit pellets. Sure, you can have advocates and evangelists for your cause, but you still need someone to lead the charge. That remains the essential power of the PR professional; someone who can focus the message, whether it be through intuition, common sense, or research, and provide a clear message to the corporate leader.
I think the idea that you pay someone to be 'of counsel' or because it was the cost of doing business lost its appeal long ago. Did it catch up with the industry? It probably just did.
I think Dr Turnbull and the Kepler School might both be imaginary, but that wouldn't change the truth behind the "study" -- agencies do need to change, and quickly. I'm meant to give a speech next month about the future of agencies, and I'd welcome your comments and those of your readers. What will define the winners and losers?
All very depresssing! I think this is a very exciting time for our industry, and that our expertise is required now more than ever.
What expertise? Come on, you're talking to me know. - Amanda
It's an interesting if polemic picture. Two things:
1. Does PR (US specifically) truly believe it ever controlled the media? I know attempts at control within US high tech media (both agency and in-house) were increasingly hamfisted. Didn't wash this side of the pond where editorial has always been more independent (or less dependent depending on your point of view) of publishing.
2. The measurement thing is even more interesting. PR has measured, but the wrong thing. Ink on page is not the same as influence at the point of purchase. For the first time perhaps, PR is seeing what has been known for years - it's effectiveness as relates to the customer through ink that gets put on the page is almost zero. It may have some influence on getting a customer through the door - but buying decisions? Rarely, if ever. People buy from people. That's why SAP has industry 'clubs' set up at its SAPPHIRE conferences. It's why in the UK, there is the Sage Accountants Club. Now, even those sanctums are being breached to be replaced by....??
No amount of PR and spin can kick back against that sort of tide with any serious expectation of success.
Amanda - edicts restricting internal blogs will casue an opposite and far from equal backlash. Trust me - the MySpace generation doesn't take kindly to being legislated against - ESPECIALLY this side of the pond :).
I can think of lots of instances in which PR has prompted people in large numbers to march into a shop or doctor's office or hair salon to demand a new product, prescription or hair style they've read / heard / seen through the media. Problem is, this side of the pond, they can't always find someone willing to provide enough customer service to take their money. But I digress. What will the agency of the future look like?