On his blog earlier this month, Peppercom managing partner Ed Moed raised a provocative question: Are the quarterly league tables that rank PR firms based on the value of the M&A deals they've worked on really the best way to measure success in that category?
Of course not. As Moed correctly points out, PR firms aren't usually paid a percentage of the deal value. So a $25 billion merger could theoretically mean lower fees for a PR firm than a $10 billion merger that required more intricate communications work. Knowing that, wouldn't overall billings for M&A work be a more accurate way to rank firms?
That would be great. Please call us immediately when such data becomes available. The simple reality is that the overall deal value is a public number, but PR firm billings are not. In the M&A space - where a small handful of firms dominate the biggest deals - the competitive advantage is a closely guarded secret. So while smaller players might voluntarily release their billing figures, the top agencies are unlikely to do so.
What that means is that league tables that measure deal value and deal volume every quarter are the best indicators we have at the moment of the performance of PR firms in the M&A sector. These numbers, it's true, offer only a shadow of the agencies' actual profits. But they are a rough indicator of who is doing the most work, who is doing the biggest deals, and whose fortunes are rising and falling. The numbers can be compared quarter to quarter and year to year to give an inexact, but still valuable peek into this exceedingly tight-lipped corner of the PR industry.
As Winston Churchill once said of democracy, what we have now is the worst system - except for all the others.