How to choose the right PR agency: The dog-and-pony show, as it is often called, can be full of tricks and surprises. From unexpected bills to disappearing senior staff, Aimee Grove guides you through the prickly process of choosing an agency

When PeopleSoft PR director Steve Swasey was with his previous employer, food company Tri-Valley Growers, he hired an agency that had ’a great national reputation and put on an amazing show, a full-blown presentation with all the big guns there,’ he says. But once the agency started doing the work, Swasey found himself always dealing with the junior staff - even when he called the senior people. Worse, he found out that the agency had also been working for one of his competitors without telling him.

When PeopleSoft PR director Steve Swasey was with his previous employer, food company Tri-Valley Growers, he hired an agency that had ’a great national reputation and put on an amazing show, a full-blown presentation with all the big guns there,’ he says. But once the agency started doing the work, Swasey found himself always dealing with the junior staff - even when he called the senior people. Worse, he found out that the agency had also been working for one of his competitors without telling him.

When PeopleSoft PR director Steve Swasey was with his previous

employer, food company Tri-Valley Growers, he hired an agency that had

’a great national reputation and put on an amazing show, a full-blown

presentation with all the big guns there,’ he says. But once the agency

started doing the work, Swasey found himself always dealing with the

junior staff - even when he called the senior people. Worse, he found

out that the agency had also been working for one of his competitors

without telling him.



It’s a familiar story to most PR pros on the client side. And for every

tale like Swasey’s, there’s another five about the client who hired a PR

firm on the advice of a golf buddy and found himself six months down the

road with depleted coffers and no clips to show for it.



Let’s face it: hiring a PR firm is a risky business, and there’s no

one-size-fits-all recipe for achieving success without getting

burned.



And the rules of this game have changed significantly in recent

years.



As the dot-com boom has driven demand for agency services through the

roof, and with PR suddenly deemed the golden child of the marketing mix

by VCs and entrepreneurs, the shoe has shifted to the other foot when it

comes to new business. No longer do client companies - even those with

million-dollar-plus budgets - call all the shots. In fact, in San

Francisco and Silicon Valley, typically it’s the prospective client that

needs to audition for a slot on the roster of some of the area’s hottest

hi-tech PR shops.



Agencies are beginning to eschew the traditional, multistep,

request-for-proposal process when other potentially profitable and

less-demanding clients are waiting in the wings. And for clients, the

whole idea of conducting extensive reviews has become synonymous with

so-called Old Economy thinking. ’When you need to move quickly, you

really need to devote the time to identifying your company’s needs, the

role the PR firm can play for you and possible agencies - not on the

steps involved in writing a formal RFP,’ says Debby Fry Wilson. Fry

Wilson completed an exhaustive search for her former employer,

Drugstore.com, just before she left in May to join CarOrder.com as SVP

of corporate communications.



At the same time, not every client is an IPO-eager start-up. And as

agencies begin to reconsider the get-rich-quick, account-churning

practices of 1999 and instead concentrate on reeling in more solid

corporate clients, traditional bake-offs are reappearing. Luckily, there

are a few general, tried-and-true guidelines that still apply in hiring

a PR agency - for those who are able and willing to invest the time to

do it right.





Getting started



To adequately research and evaluate candidate firms and to check

relevant client references - in addition to allowing the agencies enough

time to prepare substantive presentations - most experts say to allow at

least 10 to 12 weeks (or about 100 to 200 hours of staff time) from

start to finish. This kind of time frame also enables the bottom-line

needs assessment that most experts say is a critical and often-neglected

step.



’You should first develop a clear, concise description of your PR needs,

the characteristics and competencies you seek in an agency and the

criteria you will use in selecting the agency,’ offers Jerry Swerling,

principal of Swerling & Associates, a Marina del Rey, CA-based

consultancy that specializes in agency reviews. ’To do otherwise is to

run the risk of making indefensible decisions.’



It’s also smart to examine your objectives in hiring an agency. Are you

looking to get press, and if so, in what types of media? Are you seeking

assistance with message development and analyst relations? Do you need

to capture the attention of VCs to attract funding? Make sure you

consider only those agencies that specialize in the areas that can truly

help your organization reach these goals.



Be sure to separate the real needs from those attributes that simply

look good on paper. For example, do you really need international

capabilities?



Is it critical that this agency have industry-specific experience? If

your goal is to score national exposure in mainstream business

publications, for example, hiring a firm with great contacts at the

trades in your sector makes less sense than a generalist firm with a

proven track record in headline-making campaigns.



Finally, determining some sort of rough budget is necessary before

contacting any agencies. The candidates can’t be expected to come back

with realistic strategies if the expense parameters are out of whack.

’We’re in a creative business. It doesn’t do either side any good to

come up with something that would take a dollars 75,000-a-month budget

to implement when the client’s budget is dollars 20,000 a month,’ says

Terri Firebaugh, principal of Corinth, TX-based Firebaugh

Communications.



It’s also a good idea to secure agreement on the above by all of the

senior managers who will be affected by the PR function. ’This will help

to build consensus and avoid needless conflict and disagreement,’ says

Swerling, who generally interviews top-level execs (CEO, COO, CFO) along

with members of the marketing team. Topics they discuss before drawing

up a list of potential agencies include ’the ideal agency,’ past

experiences with other firms and what their expectations are.





The shortlist



It pays to know what’s going on in the agencies. PRWeek provides regular

news and insight into both the major firms and hot (and cold)

boutiques.



There are also many reference sources available online and offline to

assist in drawing up a long list. The PRSA Counselors’ Academy offers

The Red Book, a listing of the academy’s members, which is available in

hard copy and online at www.prsa-counselors.org. O’Dwyer’s Directory of

Public Relations Firms is also published in hard copy and as an online

reference tool at www.odwyerpr.com, where agencies are listed in

alphabetical order as well as by geographic location. Neither of these

two options enable blind electronic searches based on specific criteria,

however.



For this level of assistance, the Council of PR Firms’ ’Find a PR Firm’

service at www.prfirms.org is a better bet. The database enables client

companies to search for agencies based on factors such as location, size

(by revenue), international capabilities and service areas and

expertise.



Similarly, the PR Central Web site (www.prcentral.com) hosts a variety

of agency-finder resources, including a searchable database of

firms.



A note of caution: neither PR Central nor CPRF’s screening tool seems to

be 100% accurate in its search results. For example, on a search of PR

Central’s database, where ’San Francisco/Silicon Valley,’ ’Public

Affairs’ and ’Crisis Management’ fields were specified, three hi-tech

firms (Niehaus Ryan Wong, The Horn Group and Applied Communications) and

one food specialist agency appeared, while the tool omitted GCI

Kamer-Singer or any of the other well-known Bay Area crisis experts.



PRWeek will be offering a more comprehensive search service to be

launched early next year as part of its new Web site.



An alternative service, which is free to clients seeking PR firms, is

Agencyfinder.com, an online, searchable database of about 4,000

advertising, marcom and PR agencies. Pre-screened and pre-qualified

agencies pay to be included in this listing. After an initial field of

candidates is drawn up, an Agencyfinder.com representative contacts

client organizations for further assessment of their needs; at that

point, you can request a packet of essays completed by several agencies.

Based on these essays, you can select a handful of ’best matches,’ and

the Agencyfinder reps arrange a face-to-face meeting.



Along these lines, it can be advantageous for some clients - especially

those with limited time to invest in search activities - to hire a

full-blown agency consultant who has a working knowledge and an

invaluable database of current PR firms (see sidebar on page 27).



Many client-side PR pros, however, still believe that the best sources

for agency information are personal networking and the community at

large.



Look at companies, even competitors, and see who represents them (either

call the company’s PR contact and ask directly or sleuth it off a press

release posted on the newswires). You can also look at those agencies

that have won recent industry awards for similar types of campaigns -

for example, Bulldog Reporter’s Media Relations Awards, PRSA’s Silver

Anvil and PRWeek’s own PRWeek awards.



Many experts recommend asking analysts and journalists which PR firm

they prefer to deal with. ’You definitely want an agency that is going

to get its calls answered and that doesn’t have a reputation for

’flackery,’’ says PeopleSoft’s Swasey. Reed Byrum, director of corporate

communications for EDS, says that one Silicon Valley agency has burned

so many bridges with media contacts that it ’simply can’t do what they

promise.’



At the same time, keep in mind that comments from journalists can be

misleading. For example, who’s to say that it wasn’t one inexperienced

AE five years ago who soured a particular reporter on Agency X?



’I think you should only call journalists if you already have that

established relationship with a reporter, not just phoning someone up

out of the blue,’ advises Byrum.





Types of firms to consider



In determining what types of agencies to consider, avoid the ’usual

suspects’ syndrome. Don’t consider only the major agencies in your

backyard or those known for major-name accounts, when a mid-size or

specialist agency could be a much better fit for your needs. Consider

looking at a selection known for different things - a mid-size

general-service firm, a boutique with an established reputation in your

industry or a boutique without direct industry experience, but a

reputation for outstanding creativity.



Some experts advise looking at agencies of comparable size, in which

most of the clients have budgets in the same range as your own. As G.A.

’Andy’ Marken, president of Marken Communications in San Jose, put it in

an article he wrote on hiring an agency: ’If the budget is large and the

agency is small, your objectives can suffer. If your budget is small and

the agency is large, you can get lost.’



You should be able to draw up a long list of 10 to 12 agencies for

consideration.



While you could start sending out RFPs at this time, it’s generally

better to avoid the cattle-call approach, which requires agencies to

jump through many hoops before they have even made the short list.



To narrow your selection further, do some gumshoe work on the Internet,

checking out an agency’s Web site to look over case histories, basic

capabilities, bios of agency principals and a client list. But don’t be

fooled into thinking every company that appears on an agency roster is

an active, full-time client. Often agencies keep old clients on the site

months or even years after that company has moved on to another firm.

Sometimes the agency has done only one project for a listed company.



After some online snooping, pick up the phone and call the agency

principals to gauge their interest level in your business and/or their

capacity to take on new accounts. Find out any potential client

conflicts and ask about minimum monthly retainers or annual fees.



When you have decided on the top six or eight firms from the original

list, develop and distribute to them a comprehensive questionnaire,

requesting detailed information on proposed account teams, capabilities,

case studies and client references. Allow enough time for the agencies

to complete the task sufficiently, then, using a uniform scoring

process, choose the top four to six semifinalists from these

submissions. Then schedule meetings with them at their offices.





Paying a visit



This agency on-site meeting is not optional but ’critical,’ according to

Chris Hosford, corporate communications director at Hyundai. ’Recently,

we had five finalists in our search for a national agency, and when we

visited one of the firm’s local Los Angeles offices, we found out they

only had two full-time people there,’ reveals Hosford, who has hired

four PR firms in the past 18 months. ’That’s something we never would

have found out otherwise.’



Hosford also recommends scheduling a meeting in the morning or late

afternoon to evaluate what he calls ’the pace of agency culture.’ ’If

it’s 9:00 am and people are still milling around, getting coffee and

chatting, or if it’s five-thirty and the whole office has left for the

day, that tells you something,’ he says.



’Those ’just between us’ conversations you can have with the junior

staff and receptionists can tell you a lot,’ adds PeopleSoft’s Swasey,

who recently hired Phase II Strategies after an extensive review. ’And

when the top folks are out of the room, how do the rest of the staff

act?’





Reference checks



Once you have the names of clients on the agencies’ current rosters,

call some or all of them to ask about the firm’s methodology, track

record of results and other questions that might help determine the

amount of attention you can expect from the agencies as a client of your

size.



If you can, get in touch with some of the clients no longer working with

the agency. In fact, Jericho Communications CEO Eric Yaverbaum, who is

currently writing PR for Dummies, advises clients to ask which agencies

have fired them and why, even requesting the firm to turn over those

former clients as references. ’Everyone in this business has lost a

client and if they say they haven’t they’re lying,’ Yaverbaum explains.

’I believe in the warts-and-all approach: they should know everything

about us before hiring us.’





To RFP, RFQ or neither?



After reference checks and on-site meetings, you should be able to issue

either an RFP or RFQ (request for qualifications, sometimes called an

RFC, or request for credentials) to the top remaining two to four

candidates.



What to ask for in this final presentation depends on the type of agency

you are seeking, the nature of the assignment and what you will need to

feel comfortable and confident in your decision.



For organizations that have well-identified PR goals and needs, a

company- and industry-specific analysis of challenges and opportunities,

as well as a proposed plan of action to address these, can be a clear

way of delineating those firms best qualified and willing to start work

on the account immediately. Before you go about drafting a request for

this type of research-rich and detailed presentation, however, keep in

mind two things: first, most agencies today expect compensation for

their time and ideas on such labor-intensive plans. Second, you will

need to provide competing agencies with enough information about your

company and products so they can work from an accurate starting point.

While this can seem risky, especially with the losing agencies, it is

standard to require non-disclosure agreements from the competing

firms.



If the idea of opening the company coffers and releasing information on

future plans seems too risky for your organization, another pitch

strategy is to issue a sample creative challenge - either a single

hypothetical situation or one real client problem - and ask for

potential ideas on how to tackle it. Other in-house PR execs draw up a

relatively brief questionnaire designed to address issues and challenges

specific to the business.



Finally, some clients are content to query agencies about their baseline

capabilities and qualifications rather than require them to create a

program or problem solution from scratch. In fact, CPRF encourages

clients to issue an RFQ rather than an RFP.



’What clients should do is issue an RFQ and select the best firm based

on qualifications, understanding of the industry, track record,

chemistry and the proposed team,’ says Ron DeFore, principal of

Washington, DC-based Strat@Comm. ’Unfortunately, the standard fare is

the client issuing an RFP that attempts to spell out what their

challenge is. This is often not done well and sometimes they really have

not identified what they really need the most.’



No matter what form the presentations take, agencies should provide a

proposed team structure, bios for team members, examples of past work

and case studies and client references, as well as any other evidence of

relevant credentials and qualifications for the business. A good

proposal should also ideally include a timeline of proceedings and a

targeted start date.





Avoiding the dog-and-pony show



No matter what kind of presentation you are expecting, nearly everyone

agrees on one thing: make sure you don’t get taken in by a dog-and-pony

show. The best way to protect against being dazzled by glitz is to

specify that only the members of the account team - those that will be

working most often on your business - be present and participate in the

pitch.



’I always told agencies, ’Everyone coming to this presentation needs to

be on the account,’ and had them tell me exactly what each person would

be doing for my business,’ says Nancy Moss, managing director of Ruder

Finn/Boston and former global PR director for Reebok.



Make sure you question those lower-level execs as well. ’You can also

ask those at the AE level questions about things like target

publications,’ says Michelle Bowman, a PR agency training consultant who

spent many years with Waggener-Edstrom. ’For example, ’What do you think

of eCompany Now? How would you go about helping us get coverage

there?’’



Neil Myers, principal of Connect PR, a Provo, UT-based hi-tech agency,

even advises clients to ask for references on the account executives who

will serve your business and to nail down how many other clients they

each will be juggling at the same time as yours. Myers notes that more

than two clients are likely too much for your account to get the

attention it deserves.



If you are hiring a national or international agency, make sure the

local office directly handling your account has the appropriate

expertise. ’Lots of agencies say they will use the whole network, but

that doesn’t really happen, because they want to keep the revenues

within that home office. But you really need to have local expertise,’

points out EDS’ Byrum.



You should arrive at the presentation prepared with questions designed

to keep the agencies on-point and to test the validity of some of their

claims. Asking for case studies is not enough. You will need to ask

pointed questions regarding these ’success stories,’ such as, When did

this occur?



How many of the original members of that account team are still with the

agency? Or was this success achieved by an agency member while he or she

was with another firm?





Getting the truth behind the claims



Sitrick & Company technology practice head Lew Phelps, who has worked in

corporate positions for Southern Pacific Railway and other companies,

believes getting at the truth behind media claims requires such

questions as, What is their relationship with the local bureau of The

Wall Street Journal, Forbes or Business Week? Who’s the reporter who

covers this industry?



When was the last time you placed a story with that reporter? For what

client? What was the placement? Can we call the reporter to ask how he

or she likes dealing with you as a PR person/agency?



’That last one will scare a lot of people,’ says Phelps, who was a Wall

Street Journal reporter before he entered PR. ’It smokes out the phonies

who haven’t really done what they say they’ve done.’



Finally, watch out for full-blown, sophisticated presentations that look

just a little too slick. ’How could they possibly think out all of your

problems and gain an in-depth knowledge of your company and products so

quickly?’ observes Andy Marken. You’re probably seeing an off-the-shelf

template with names inserted.



But more likely, the problem will be an overwhelming similarity in the

pitches. ’It’s amazing how much all the agencies sound alike during any

pitch,’ says Moss of Ruder Finn. ’I always wanted just good, substantive

thinking about my business - not spec creative but just the ability to

comment on or contribute similar examples of something parallel to my

company’s situation.’



’What I have been looking for is a deep understanding of our business

and evidence of how well they have done their homework,’ says

Excite@Home senior corporate PR manager Alison Bowman, who was in the

midst of an agency review at press time. ’It’s amazing to me how many

agencies propose things we have already been doing for the past year and

then attach a dollars 100,000 price tag to it.’





Making a decision



Depending on what you have asked clients to bring to the table, making a

decision should come down to an evaluation of potential. For example, if

the agencies were asked to address a sample problem, were they

resourceful with their research given the limited time and information

provided? Did they come up with a strategic or original approach? Did

they clearly illustrate how their program, approach or capabilities

would help your company achieve its PR and communications goals?



One big reason people give for hiring an agency is chemistry. How can

you test this factor? Hyundai’s Hosford says to ask yourself, ’Are there

at least one or two people in this room I would feel comfortable telling

my company’s deepest, darkest secrets?’ Dan Collins, senior media

relations manager for Mercy Medical Center, points out that chemistry is

a two-way street. ’You need to look inside your own organization to see

if you have the right people to work well with this particular

agency.’



If you’re still wavering on a final decision, keep in mind that you

could hire the leading agency to perform a closed-end project, such as

writing a plan or handling a single announcement, as a test-drive before

buying the Cadillac, so to speak.



Once you’ve made a final decision, you should be sure to notify the

other agencies in play, typically via a personal call to the principals.

It’s a good idea to provide them with some detail regarding how the

selection was made and why their agency wasn’t chosen. This is proper

etiquette that might help them pitch more successfully for other

business, and it also buys goodwill for you, the client, who may at some

point have to go back to the runner-up agencies for other projects or in

the event that the finalist doesn’t work out.



Once you’ve selected the winning team and notified the runners-up, it’s

time to get the agreement in writing. While most agencies will charge

ahead on the work prior to a formal contract signing, don’t

underestimate the importance of this final step, which often takes at

least four weeks to complete.



’These are very serious legal agreements, and agencies need to recognize

this,’ says PeopleSoft’s Swasey. ’You can draw up a simple letter of

agreement presented by an AE, but that’s not right.’



Not surprisingly, it’s often clients who prefer relatively simple

letters of agreement, but for agencies contracts are their best

insurance against getting burned. At the very least, all contracts

should address compensation (terms of payment, fees and/or monthly

retainer), expenses (see sidebar on page 29) and how the relationship

will be dissolved, if it should come to that.



At a time when so many companies are talking about working in ’Internet

time’ and looking to boost efficiency, the temptation to cut corners

during an agency search is stronger than ever. Experience shows,

however, that skipping steps in the process can lead to huge

dissatisfaction down the road - and a greater waste of time overall if

you are forced to start again from scratch with a new agency six months

later. Obviously, the wisest course is to take the time to find the

right agency from the beginning.





Q&A: SOME BASIC QUESTIONS YOU SHOULD ASK AGENCIES AND YOURSELF



What to ask agencies at the pitch:



Will the people here today be the people on my account? If so, what will

each be doing for my business?



How many other accounts do each of these team members currently work

on?



How do you differentiate yourself from other agencies in your space?



What publications do you think are good for our company and why?



How do you intend to get up to speed on our business, and how much of

this time will you bill us for?



What kinds of documents will you need to see from within our

company?



What analysis will you do of our competitors?



How will the results of this program be measured?



How much will this program cost?





What to ask yourself in evaluating the pitches:



Does the agency know our market?



Does it understand and know the media that hit our target

buyers/audience?



Has it achieved success/results for others with similar assignments?



Can the agency’s culture work with our organization’s?



How important will our business be to this agency, i.e., how does our

budget compare to other clients’ on the roster?



Aimee Grove





FROM RETAINER TO EQUITY: THE MANY WAYS AGENCIES BILL



Type: Retainer



How it works: Client pays the agency a fixed monthly fee.



Who uses it: Fewer and fewer agencies, though some - especially more

tradition-bound firms - swear by its consistency and predictability.

Easier to carry off in IR than in marketing PR, some say.



Pros: For clients, a bargain if their agency over-services their

account.



For agencies, security in a monthly check from the client.



Cons: Retainers seem too rigid and stodgy for a volatile business world

where PR efforts must frequently change and adapt. Difficult to measure

PR achievements against client dollars spent.



Type: Hourly Rate



How it works: Agencies bill based on executives’ hourly fees and their

time spent on accounts.



Who uses it: The most common method, currently. Some firms bill hourly

against a retainer.



Pros: When paid by the hour, PR execs are less reluctant to innovate or

take on extra work. Clients can examine the relationship between the PR

firm’s accomplishments and the hours it bills.



Cons: For the agency, no work means no pay: pros must manage their time

more carefully. Agencies sometimes don’t charge for total hours worked

for fear of appearing to overbill. Clients often fear every syllable out

of a pro’s mouth is on the clock.





Type: Performance Billing



How it works: Agencies receive a bonus - or in some cases their entire

fee - depending on whether they deliver on media coverage or facilitate

things like a spike in product sales, bump in stock price or election to

office.



Who uses it: More talk about it than actually use it. Most common among

firms associated with ad agencies.



Pros: A pay-for-production billing schedule clarifies objectives and

costs and is relatively simple to set up. If the goal is media, hits are

easy to measure.



Cons: Linking PR efforts to product sales or stock price is fuzzy

science at best.



Type: ’Menu’-Based Billing How it works: Agencies bill a fixed fee for

each service they offer.



Who uses it: Sometimes adopted at firms whose founders came from the

client side and recall unpredictable and inscrutable PR invoices. Works

best when devoted to a particular industry sector.



Pros: Agency and client are in accord up front on each activity and its

fee. No time cards! The scramble to account for time is but a

memory.



Cons: Spontaneity is slightly hampered: every modification must be

approved by the client, or (in strictly observant agencies, at least)

it’s free.



The agency can’t recoup for unexpectedly time-consuming tasks.





Type: Stock Compensation



How it works: Agencies accept stock in client companies as payment. Most

common in strong economic times. Financial consultants typically advise

that PR firms at least cover their costs in cash.



Who uses it: Firms of all stripes, some in hopes of riding the stock to

higher heights, others as a gesture of solidarity with their

clients.



Pros: For agencies, the chance of a speculative score. For clients,

especially young companies, doling out stock conserves cash. It also

helps bind the agency’s fate to theirs.



Cons: See previous sentence. Also, agency stockholders must avoid the

appearance of counsel based on their interest rather than client’s.



James S. Bourne





A HELPING HAND: WORKING WITH AN AGENCY SEARCH CONSULTANT



When Richard Marshall joined Subaru of America as corporate

communications director last October, he faced the daunting task of

hiring a new national PR firm while ramping up in a new position and

building his own in-house team.



Knowing he needed assistance in running a full-blown review and seeking

up-to-date, firsthand knowledge of the agency marketplace, Marshall

hired Jerry Swerling, a Marina del Rey, CA search consultant who also

directs the PR sequence at USC’s Annenberg School of Communication.



’Jerry enabled all of us who were pressed for time to concentrate on the

job at hand, while at the same time really going into depth in

interviews with our team and agencies to find the perfect match for us,’

says Marshall.



’He also made the whole process very methodical, even for a relatively

accelerated review.’



The results: within eight weeks, Subaru had signed Ruder Finn/New York

as its agency of record - a firm Marshall admits may never have crossed

his radar if he had conducted the review himself.



When looking to hire a PR agency, working with agency search consultants

offers several advantages:



1 Uncovering lower-profile firms that may be better equipped to meet a

client’s needs than the big-name agencies on everyone else’s lists. For

example, Swerling helped steer Kinko’s toward Atlanta-based Duffey

Communications; what may have looked like an odd pairing has morphed

into a two-year relationship, he says.



2 Internal assessment - securing consensus among management and building

support for the new firm once on-board. For example, consultant Dennis

Spring of Spring Associates in New York generally sits down with up to

10 executives at the senior management level to determine the company’s

needs for a PR firm before drawing up a preliminary list. Such internal

assessment and consensus-building can help secure support from all

marketing and management team members on the final decision. They may

even result in avoiding a review at all - if the search consultant

determines that it is possible (and preferable) to retain the existing

PR firm.



3 Saving your - and your staff’s - time, from checking references,

writing RFPs, researching firms. Hiring a consultant enables clients ’to

remain 100% focused on their normal responsibilities without the

estimated 100-to-200-hour distraction the management of a review

typically entails. I take that burden off their shoulders,’ says

Swerling.



4 A dedicated and up-to-date knowledge of the existing and evolving

agency marketplace. In a time when M&A activity in PR is at an all-time

high, many clients are at a loss regarding who owns whom, the

implications surrounding such mergers (client conflicts, enhanced

capabilities) and any emerging players.



5 Objective, third-party perspective and solid methodology. Instead of

relying on gut feelings about chemistry (which can turn out to be

misleading later on) or being caught up in the fireworks of a flashy

pitch, clients are led to follow a more methodical and reliable system

for finding the right firm.



Admittedly, the services of a good search consultant don’t come

cheap.



Generally, fees can range from about dollars 15,000 to dollars 35,000

per search, depending on the complexity of the assignment and other

variables such as geography, industry sector, number of firms considered

and interviews involved.



To find a good agency search consultant, check with your local chapter

of the PRSA or with the Council of PR Firms, or see below for a select

number of well-known matchmakers. Most consultants do not specialize in

one particular industry sector over another, and most handle national

and local searches with no limitations regarding client location.





Dennis Spring Spring Associates, New York



www.springassociates.com



(212) 473 0013



Jerry Swerling Swerling Associates



Marina del Rey, CA



www.swerlingassociates.com



(310) 578 2462



Marie Raperto The Cantor Concern, New York



www.cantorconcern.com



(212) 333 3000



Charles Meyst Agencyfinder.com, Glen Allen, VA



www.agencyfinder.com



(804) 346 1812



Aimee Grove





IT’S YOUR DIME: KEEPING YOUR EYES ON YOUR PR EXPENSES



Many clients complain that although they know what their PR agencies are

supposed to be charging them, they are surprised to find extras added to

their bills. Unexpected costs are the number-one complaint clients have

with their agencies, according to PRWeek’s Corporate Survey (PRWeek,

Feb. 28, 2000). Experts say that specifying prices and setting up good

billing practices in the contract - especially for expenses and added-on

services - will help save money down the line.



’I noticed that once the contract was signed, PR agencies would spend a

lot of the time we were paying for trying to sell us marketing

services,’ says Michael Romanies, VP of marketing at Loislaw.com, a

legal research site. Romanies started requiring a 30-day cancellation

clause in his contracts.



’We hired a PR agency for PR services. Now we can specify that trying to

sell us marketing will jeopardize the relationship,’ he says.



Here are 10 tips on how to keep costs down and prices in check from the

start.



1 Before signing a contract, ask to see an invoice from the previous

month, preferably from a similar account. Not only will this allow you

to see the cost of various services, it will also give you an idea of

how organized the billing will be for your company’s account. ’I believe

a surprised client is an unhappy client,’ says Suzie Boland, president

of RFB Communications Group. ’There should be no mystery expenses. The

agency should be willing to provide you with a breakout, a detailed

description of every charge on your bill.’



2 Get a detailed listing of expected costs based on the agency’s

proposal, including an estimate for average monthly out-of-pocket

expenses. Then require that all expenditures be approved prior to

commencing each project. Verify that the work you are being billed for

is work being done only for your company. For example, PR agencies may

send one person to represent several companies at a trade show, so

billing should reflect shared expenses.



3 Know who is working on the account and each person’s hourly rate. ’The

primary partner may sign you on, but most of the work will be going to

lower-level associates. Know how much everyone costs,’ Romanies advises.

Be sure your billing statement will show a breakdown of each team

member’s work in terms of hours and dollars.



4 Hire a newswire service to distribute press releases. PR agencies will

send releases to the same newswires but mark the price up. One client

paid a 40% mark up on press release distribution, but could not

renegotiate because the expense had been approved. Research the true

cost. Have the PR staff write the press release and organize a press

list, then hire the distribution service yourself.



5 If possible, hire other services directly. For work that is contracted

out, such as producing pamphlets, books, VNRs and ANRs, find out how

much the agency plans to charge and compare that to buying the services

yourself. Agencies often add an extra 20% or 30% to what they have paid

when billing the client. Dennis Spring of Spring Associates advises

finding out which items are marked up, since they vary by agency.



6 Hire your own administrative assistants to do faxing, photocopying,

mailing and other administrative duties. This ensures that you are not

paying dollars 120 an hour for an entry-level account executive to stuff

your envelopes. In addition, the cost of these administrative tasks can

be marked up considerably. If you would rather have the agency handle

these tasks, ask for lower rates to be written into the contract.

Negotiate photocopy costs: agencies often charge 25 or 30 cents a copy,

when it is sometimes possible to bring that down to 10 or 15 cents.



7 Require joint ownership of the project’s press list. This will save

you money in the long run if you have any problems with your agency.

Should you choose to move to another agency, you will know who has been

contacted on behalf of your company.



8 Insist that the contract specify liability for erroneous statements in

the press and other problems. If your PR representation makes a false

claim in the press, your company can be held liable. Make provisions in

the contract to clarify legal responsibility. Approval of information

being given to the press can be required, among other things.



9 Insist that once services are completed and paid for, you own the

copyright to the work. Write it into the contract. This is particularly

important with work-for-hire such as graphic design or writing services.

One company found that after it terminated its agency, the agency

challenged its right to print a commissioned article it had paid

for.



10 Hire an internal PR professional to work in concert with your PR

agency. Having one person whom agency staff reports to will help

maintain the focus of your project and help the agency get the

information it needs more quickly. It will probably also save you

money.



Ana Vargas.



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