The great debate: Is the agency model broken?

And what about the client model?

NEW YORK: The agency and client models are broken because of two "seismic" changes over the years: the procurement takeover and media and social explosion, said Michael Farmer, chairman and CEO of Farmer & Company.

Farmer, who spoke at the PRWeek Conference on Wednesday in New York, explained that procurement has caused fees to decline, so agencies have to do more for clients with fewer staffers.

The author of Madison Avenue Manslaughter added that media and social media are infinite, so "no one or everybody is an expert," which makes it more difficult for agency partners to prove their expertise to clients.

One of the biggest challenges when it comes to communications and corporate marketing is "defending your spend," explained Patrick Van de Wille, CCO of InterDigital.

He said talking about measurement can seem like a "self-justifying" tool when discussing tweets or impressions with people who look after ROI and other solid metrics. The PR side of the business can rarely make the argument to the finance team to expand what they’re doing, added Van de Wille.

However, Andy Pray, founder of Praytell, said he doesn’t think the agency model is broken, but it does have "hundreds of fractures."

"As an industry, we have to work together to do more," he said, particularly when it comes to talent.

He said the PR industry has to break down silos between sectors such as social, PR, and paid to have a more integrated model, and PR pros have to be trained in everything.

Van de Wille said the PR industry used to be a "catch-all for misfits," with industry execs having backgrounds in different businesses, but something has been lost along the way. Many young PR pros today have degrees in communications rather than areas such as business, journalism, or film, he said.

Pray said his agency recently hired an executive from PepsiCo who understands business and brand-speak, which has been very valuable for the firm.

On the brand side, Farmer said the client model is broken, too, with many companies hiring dozens of agencies with the result being only a small percentage of their voices being heard.

Despite all of the challenges, Pray said now is the best time to be in PR because the industry can own content. He said that firms have to find a "balance of strategy and scrappiness," rather than just offering cheaper options than advertising counterparts.

In a separate panel during the PRWeek Conference, Richard Edelman, CEO and president of Edelman, talked about how PR agencies have to aspire to do more than measuring content. He said they have to go up against advertising, digital, and media buying agencies in order to evolve in the modern communications mix.

"PR has been the tail of the dog," said Edelman, adding that the comms industry has to flip the thinking that ad agencies steer strategy.

Matthew McCarthy, senior director of Unilever’s Axe and men’s grooming brands, said Unilever does integration with various media, such as Degree’s partnership with Fox’s So You Think You Can Dance.

"We’re in the business of creating meaning for people, each other, and consumers," he said. "We’re all marketers."

He said the brand was able to gather a lot of data about what content resonated with fans and what didn’t throughout the season. However, McCarthy said, it’s a "misnomer that data is the answer" because it depends how a brand uses the data to determine its strategy.

Consumer engagement and data company Knotch looks at both the emotional impact and brand love or perception from a piece a content and the shares or time on pages, said Knotch cofounder and CEO Anda Gansca.

"Participation and emotional feedback" are key, she said.

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