Last week, Hewlett-Packard fired its corporate AOR Hill & Knowlton and enlisted a network of specialist firms to meet its corporate PR needs, while keeping H&K for other work, such as executive communications. Wal-Mart also hired three firms with varying expertise for its multimillion consumer account awarded in June for business previously handled by a single firm, and LG Electronics enlisted a network of WPP agencies for its product and corporate PR in May.
“We're seeing that in those instances when a company might have gone to a one-stop shop agency, they're looking at compartmentalizing the business,” says Tony Hynes, an SVP at Bite Communications. Last week, HP hired Bite for corporate reputation, innovation, and sustainability work, as part of the company's new strategy of enlisting a network of agencies rather than a single corporate AOR.
For its corporate business, HP also works with Public Strategies Inc on corporate public affairs and the Abernathy MacGregor Group on financial communications. Representatives from HP weren't immediately available for comment, but Christina Schneider, director of corporate media relations at HP previously told PRWeek that HP's corporate practice would now be “utilizing a network of best-in-class agencies whose skill sets more closely align with the evolving corporate communications needs of our business.”
“It's this type of [specialized briefs] that have been very successful for us over the last few months,” Hynes notes. “I think it's been driven by the economy as people are looking at ways to get more from their budget by having specialist firms with best practices. The leads we're seeing are getting a lot more specialized.”
Lisa Harrison, VP of communications for the American Chemistry Council (ACC), selected W2SKD, a custom created partnership that includes Racepoint Group, Digital Influence Group, and Squier Knapp Dunn, as AOR in May. While Harrison said she wasn't seeking to hire a consortium of agencies as ACC's AOR, the network was the most compelling option. ACC previously worked with Ogilvy as its AOR.
“We didn't go into the review with a predisposition at all whether to do a big firm AOR or to select several smaller firms, but the option we went with happened to be the best of both,” says Harrison, adding that the consortium acts as a single AOR. “We are noticing that there are specialties that we didn't notice with the bigger firms… but it's not dramatically different at this point. But it's still a new relationship for us.”
Larry Weber, chairman of the W2 group, credits his specialized agency approach for winning recent clients like ACC for W2SKD and Sonys e-book reader for the Racepoint Group.
"Now deep expertise is becoming more important," Weber said. "Clients want to make sure you really know consumer electronics, or really know the chemistry industry, or Washington, DC, or whatever their needs are."
Sharon Barclay, principal at the independent consultancy the Blue Trumpet Group, says she recently spoke to one Fortune 100 company that wanted to hire several smaller agencies or freelancers rather than a big agency to maximize value.
“It's not just about cutting costs,” Barclay said. “It's about getting the most for your dollar.”
But Barclay warns, companies have to be careful not to take this approach too far. “What could happen, is it could become too unwieldy and suddenly you're paying seven or eight different people or agencies,” she added.