ANALYSIS: Industry Associations - Small shops divided over howCouncil benefits them

The Council of PR Firms is in the process of changing its

leadership. Kimberly Krautter asks whether the new officers need to

reach out and answer some of their critics among small firms.



Belts are tightening across America. For large PR firms, the response is

often to shed staff (maybe even offices), restructure resources to areas

where work is still coming in, and sometimes to sacrifice pricing to

keep the agency busy. But how should a small firm react to such a market

in order to survive the downturn, given that it hasn't got the staff or

offices to cut?



That's just the type of problem the Council of PR Firms was developed to

help tackle. But despite the Council's determination to help small firms

with such issues, it has emerged in the last few weeks that critics in

the ranks of small firms are questioning the relevance of the Council to

boutique agencies.



The Council's membership dues are scaled to encourage involvement by

boutiques and multinationals alike, with the assessment based on the

idea that all agencies pay 0.065% of US revenues. But for some, the

impression remains that the Council is biased toward large member

agencies.



However mistakenly, many refer to the Council as "Drobis' group" or

"Drobis' lot," in reference to Ketchum chairman Dave Drobis. He

certainly had a hand in the foundation of the Council, but is no longer

on the executive board. Some also claim that those who pay higher dues

($50,000 annually), must get more in return than their smaller

brethren. And they point to the fact that the Council's last board was

heavily biased toward large networks.



There are actually three tiers of Council membership: Tier 1 is firms

under $5 million, Tier 2 contains the bulk of the membership

(firms earning $5 million-$75 million annually), and Tier

3 includes those firms with revenues exceeding $75 million. While

there are only a handful of agencies in the latter category, last year's

list of Council officers read like a who's who of large firms: BSMG,

Edelman, Fleishman-Hillard, Golin/Harris, Hill & Knowlton, Ketchum,

Weber Shandwick, Porter Novelli, and Publicis Dialog were all

represented.



However, Jack Bergen says that Council bylaws ensure that elections

limit top-tier agencies to six slots in order to ensure equal

representation across the membership. "The problem is that once a firm

grows to over $10 million, it's more likely to get bought," says

Bergen. Such post-election activity accounted for the disproportionate

make-up of last year's board.



But the tier construct shows clearly the CPRF's aim to ensure balanced

leadership. One hundred of the 126 agency members are independents, and

roughly half of those are from the smaller ranks.



However, the middle tier seems too broad. The operational challenges of

a $5 million shop versus one above $20 million are akin to

a college football player trying to make the NFL. "I agree," says

Bergen. "We may need to look at changing the bylaws to add another tier

that more accurately reflects this.



"One thing I will argue vociferously against is that big firms dominate

because they pay the biggest dues," says Bergen. "Quite frankly, it's

often the independents that use our resources the most."



Small firms react



But some of the smaller firms are talking about forming supplemental

groups to address issues specific to their companies. Shelly Spector,

president of Spector & Associates, is a current member of the Council,

but her dissatisfaction with the organization led her to create an ad

hoc, web-based group focused squarely on the needs of the independent PR

firm.



Spector says that a group dubbed the National Association of Independent

PR Agencies is forming as a loose affiliation of independent firms.



She won't reveal the names of the half-dozen firms working with her, but

she says, "The number-one purpose is to allow people to meet at will

online, and in private, to share confidences about firm management."

Spector & Associates is hosting the group's website, naipra.com. She

says the organization does not have a traditional form, and will not

collect dues. Asked how the formless entity will function, "It's to help

us compete against the Goliaths," Spector responds.



But she adds that her interest in the new group does not preclude

Council membership. She is encouraged to learn that the board of

directors now more accurately reflects her peers, but she says she would

like to see the group address ethical issues and the protection of

intellectual properties when pitching clients.



Helen Vollmer, CEO of her eponymous PR agency (and also an incoming

Council officer), says, "It's what you put into it, as it is with any

other relationship." Not soothing words to the wounded, but Vollmer

speaks from her own experience.



"My point of view is that whenever I needed something, I would call.

Sometimes I had to go look for the information, but whenever I've asked

for it, I've gotten it."



Vollmer cites white papers on contracts, salaries, fee pricing

guidelines, and other studies commissioned by the Council which, in the

absence of her membership, would either be out of her reach or

cost-prohibitive.



Critics, though, say that calls to the Council have gone unanswered,

while others say that the answers they received included case studies

relevant to large agency experiences, neglecting the realities of

non-networked firms. Chips are forming on independent agency

shoulders.



Sabrina Horn, CEO of the Horn Group, is a past and current board member,

and a vociferous defender of the interests of independents. She admits

that the concerns of her peers have some merit: "Sometimes I sit in

these meetings, and I hear these big guys talking about situations like

the incredible client bureaucracy they have to deal with, and I've

thought, 'I don't have clients like that.' But the information that

comes to me when I hear discussions of their problems is still

helpful."



Horn says the fact that independents now make up the majority of the

2002 board of directors will increase the voice of those in the lower

brackets, and will attract other independents to join. Membership

development, however, depends on building awareness, something the

Council seems to have been surprisingly quiet about.



War stories vary



Among small firms, there is a range of experiences with the Council.



Non-member Sara Stabile, president of boutique Hi-Impact PR in San

Francisco, believes she could have benefited from Council membership

when her firm suffered expansion and retraction whiplash last year. "I

haven't had a real mentor, and I now think the Council could have

provided that resource," says Stabile. She now considers the net $100 per month it would have cost her to join a missed investment.



Andrew Plesser, president of Plesser Associates in New York, says that

he was aware of the organization as little more than a voice for the

industry.



"It's always interesting to me what the big guys are doing, but with a

small firm like mine of eight people and roughly $2 million, it

just didn't seem relevant."



Marco Greenberg, president of NYPR, is a current member of the council,

but he is debating whether to renew. He says that he agrees with

Vollmer's sentiments, and says that he has been remiss in putting in as

much personal time into his membership as he could have. "It's

difficult," says Greenberg.



"I'm often too busy managing clients, employees and new business, so on

the list of daily priorities, involvement in the Council doesn't always

make the cut."



According to Horn, the Council is set to publish white papers on those

very topics and others, including enforceable non-compete

agreements.



"Ironically, it seems what we really need is a little PR for the

Council," Horn says. Bergen admits this may be true: "One of my great

frustrations, that I don't think I've overcome in my three years with

the Council, is that some of our members don't know the great work that

has been done," says Bergen.



Certainly, it seems some small firms still need convincing.



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