Report highlights fee-setting imprecision

PR agencies are over-servicing their clients by as much as 50 per

cent and throwing away an average of pounds 681,000 in fees each year,

an industry report claims.



The survey, unveiled at the PRCA's annual conference in London last

week, found that fee-setting in PR is an imprecise science, that

fee-setting rules vary between firms, and that clients do not understand

the rules by which fees are set and are keen for greater

transparency.



Addressing the conference, report author Professor Jon White of City

University Business School, said in-depth interviews with 15 agencies

and five clients were conducted, while a printed survey had gained

responses from 50 PR firms and 31 clients.



White said the way forward for PR was to align its practices with those

of management consultancies - to train staff in business and management

disciplines with an emphasis on negotiation and consultancy skills.



The report said: 'The PRCA should prepare templates and standard

approaches to fee negotiations. There is a need for a unified approach

to the practical problems of fee setting.'



PRCA executive director Chris McDowall met this week with his body's

Best Practice Committee to discuss implementation of White's

recommendations.



In a separate address to the conference, Paul Miller, chief operating

officer of global ad agency Leo Burnett, advocated the use of payment by

results (PBR) for PR firms. Major clients such as Unilever consider an

element of PBR as essential in paying for advertising services, Miller

said.



First and 42nd MD Alison Canning challenged agencies to offer 'greater

organisational competence'. In a speech entitled 'Change or die',

Canning said the PR industry was under threat from management

consultancies.



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