It may be a buyers market for PR agency services right now but selecting the right agency is as tough as ever. Some marketing bosses are working at imposing practical rules in pitches while others are turning to pitch specialists for advice.
Most clients find that agencies are working harder than ever to secure their favour, promising more work for the same price. But there has never been more pressure on in-house PR people to justify the spending of their budgets, meaning that the process of choosing an agency is coming under greater scrutiny. Pitch lists are getting longer, agencies are faced with more people from the client company at pitches, and there is far more dissection of the numbers at fee negotiation time.
Over the past 18 months, with many PR budgets frozen, clients have had to make do with the agencies they had. Effort was put into maintaining current relationships rather than seeking fresh blood. But over the last two months, many clients have started shopping around again and there has been a noticeable rise in pitch activity.
The two most popular reasons for hunting for a new agency have always been when a new PR manager or director is appointed, or when the relationship between client and agency breaks down irretrievably (often both). But two new prompts for an agency search have arisen in recent times, brought about by economic pressures.
Increasing numbers of clients now feel that they should review their business from time to time in order to make sure they are getting the best value for money. At the end of the day clients work in a competitive business and believe that their agencies should have the same attitude.
As a result many see pitches as a way to keep agencies on their toes.
Partner at Agency Insight Piers Marlow-Thomas, who helps many PR clients in their agency searches, believes that more regular repitches are a valid way of inducing more creativity in agencies. 'For most agencies, unless they're really on top of things, the pitch process will be their most thought-provoking period. Creativity often goes flat afterwards.'
The second new reason for a review is to consolidate an unwieldy roster of agencies down to between one and three, a trend that hit the ad industry ten years ago. This has mostly affected large corporate PR clients, looking to reduce the time and resources it takes to manage many different relationships.
Masterfoods, for example, last month concluded a four-month review of its agency roster, ending relationships with two agencies that had worked on just one or two brands. Three agencies - Ketchum, Bell Pottinger, and Jackie Cooper PR - were retained.
Many client companies have reduced their roster this year. AAR head of PR Alex Young says: 'A lot of our work throughout the year has been focused on campaigns reducing their rosters.' Although this is often as a result of a desire to get more value from their agencies, rather than simple cost cutting, she adds.
But it is important not to take the desire to consolidate too far, say some. Whitbread group PR manager Jeremy Probert was very keen to reduce the company's roster of 22 agencies to one when he joined the brewing and leisure firm four years ago. But he soon realised that chopping the roster down to five was the most realistic option.
'Just having one, or even two agencies isn't a good idea. You would be putting all your eggs in one or two baskets and they would end up having control over you. Far better to have three agencies all with a hefty slug of the business, competing with each other,' he says.
Probert is also a fan of the idea of getting some professional help on the pitching process. In the last few years a handful of agency consultants have turned their attention to the PR world, offering internal audits on communication departments and help with choosing an agency (see panel, p12). Although they add to the cost of the review they at least offer the chance to be more sure that the best agency is secured.
'I'd definitely consider using one of them for another pitch,' says Probert.
'It would be particularly good for anyone looking for regional agencies - it would be nigh on impossible to know all those markets and get information and references for the agencies.'
Once a decision is taken to review, and it's decided whether to go it alone or pull in outside help to run the pitch, time should be set aside to decide how to inform the incumbent agency or agencies.
History has proved time and again that even if a lunch with a potential new agency has been kept secret, you can bet that someone on the next table knows the managing director of the current agency, or likes gossiping to the trade press.
Before clients can say 'I was just testing the water', there will be indignant calls from the agency and a relationship that may have already been less than positive gets worse.
The first decision is whether to invite the incumbent to repitch. The best policy here is to be totally honest. If the client does not want to work with the agency anymore, then it should not be invited to repitch.
Don't think that putting it on the list is a polite policy - most agencies will embrace the pitch in a last-ditch attempt to salvage the account and won't thank clients for wasting their time and resources if they never stood a chance.
If the agency is not invited to the pitch, inform them as soon as the decision is made and agree when the relationship will end. If an agency is invited, then reassure the contact that all agencies will be judged by the same criteria.
Next, set out in writing exactly what the agency is being hired to do.
The more work put in at this stage, and the more effort made to canvass opinion, then the more likely that an agency search will pay dividends.
John Lewis Partnership head of press and PR Helen Dickinson ran two reviews last year for the store's furnishing and fashion departments. She says that she wishes in hindsight that she had been clearer in her definition of exactly what she wanted the budget to be spent on, and been more specific about how proposals were presented.
'It would have been so much easier to compare the agencies if I'd told them "No Powerpoint, and you've got an hour each",' she says.
Once a brief is hammered out, thought needs to be turned to what type of agency-client relationship is required. The days when clients had to pay monthly retainers to secure an agency's services are gone - work is much more likely to be handed out on a project basis, a trend that has picked up speed over the past two years.
Many companies now have a portfolio of agencies that receive regular work but with whom the company has no on-going contractual relationship.
The next stage is to come up with a list of suitable agencies, then whittle them down to a shortlist for pitch. Databases like those of Hollis, PRWeek's Contact and the AAR can help produce a long list of agencies according to the experience in certain sectors or types of PR (see panel).
The PRCA, in its joint industry guidelines on agency search and selection, suggests that clients try to keep this list to around 20 and then invite the agencies to submit written credentials.
Extra leg-work at shortlist stage helps identify the best agencies.
The most reliable way is to ask opinions of others in the industry, especially other clients experienced in buying agency services and current clients of the agencies you are considering. No good agency will refuse a request for references and few clients have any reason to be anything other than fair in their estimation of the agency.
Journalists can also often be a good source of information on which agencies' staff are the best - useful if you are seeking an agency with strong media relations skills. A quick ring around of selected journalists will soon confirm how good their contacts are.
While credentials are a useful tool at the end of the day it's the people on the team that will run the contract on a day-to-day basis. As a result it is important to balance knowledge of the agency's reputation in the industry with your own judgement of the quality of the people.
No more than six agencies should be invited in to present their credentials.
This is a crucial stage in the process, where clients can see whether agencies really have any grasp of what their business faces. Before the first meeting agencies need to know that they can call with any questions - and nominate someone to take these calls or e-mails.
'We could tell a lot from which agencies asked questions,' says Steve Cullis, i2 Softwaremarketing executive, who recently chose Citigate Technology after holding his first PR pitch.
'It was a good gauge of their enthusiasm for the project.' But he admits that he was 'rather overwhelmed' with the volume of the questioning from some agencies - 'perhaps it would have been a good idea to set a limit on it,' he adds.
Any agency spending too much time talking about itself at this first meeting should be crossed off the list - this is the opportunity for agencies to show off their insight into the client's business.
'Agencies may be keen to show off their creative ideas, but it's essential to make sure they have the required market understanding before they even get to this,' says Marlow-Thomas.
Another way to choose between agencies after the creds meeting is to look at who has done cursory desk research and which has worn out some shoe leather.
'I was impressed with agencies that bothered to go into a store and look,' says Dickinson. 'It's too easy to just present the most recent Verdict report (the leading retail market intelligence firm).'
The best agency may be clear once all have presented their credentials.
If it isn't, the PRCA recommends that clients don't invite more than three (or four if the incumbent is included) agencies to pitch creative ideas.
But many clients, particularly in the public sector, are now succumbing to the temptation to see far more agencies at pitch stage, sometimes up to seven or eight. This happens particularly when a review attracts trade press publicity and the client is flooded with last minute interest from agencies.
Seeing too many agencies isn't a good idea for a few reasons. Firstly, the bigger the pitch list the less work each individual agency is going to put in - agencies must juggle the investment with the likelihood of winning and may feel that the odds are against them. Secondly, the more agencies seen the less will be remembered of each pitch.
It is important that some thought is given as to where the pitch is held.
Many clients automatically assume that they should be held at their office for their own convenience, but this might not be the best idea. The PRCA's guidelines recommend that clients come to the agency offices - the facilities are likely to be better, and you will get a much better taste of what the agency is like on its home turf.
Matthew Tickle, head of marketing at management consultancy Partners for Change, made a point of going to the offices of each of the three agencies he had on his shortlist last month: 'It was a bit of a hassle, but worth it. I wanted to see what the vibe was like from the inside.'
Tickle was also keen not to subscribe to the traditional type of pitch: 'I didn't want people trotting up in their best suits presenting glitzy documents.
'People are acting at pitches - minding their p's and q's to impress.
I wanted to get to know them all quickly, so I held much more informal meetings where we all sat round and discussed the proposals they had made,' he says.
Although the classic presentation pitch is still the norm, some clients are experimenting with alternatives. Some agencies report being asked to take part in 'workshop' sessions with the client team where the whole group attempts to come up with ideas, or solve a problem.
Whatever the style of pitch you choose, be sure to question the agencies thoroughly on what they present to you. Many agencies report stories of completing presentations to be met by nodding heads and smiling faces, and knowing that the real discussion starts only when they have left the room.
If you are confused by anything, wonder if a proposal is feasible or question the wisdom of an idea, then question the person who has voiced it. The best way to get a good idea of what how these people work is to engage with them.
Finally, once an agency is picked and contract negotiations started, clients are perfectly within their rights to specify the account team.
Marlow-Thomas even recommends adding names to the contract so that if those individuals leave, the agency is in breach of contract.
'It means the client can get far more involved in the appointing of a replacement,' he adds.
Failure to conduct a good pitch process is damaging right across the business. But by correctly identifying needs and holding the right pitch, companies can raise their PR to a new level.
There are two types of organisations to help you in the agency search and selection process.
The first (and cheaper) kind will simply help you generate a long list of agencies with relevant experience, location and size:
Contact: A listing of consultancies and many other organisations, published annually by PRWeek. A new edition will be available at www.prweek. com in November.
Hollis: For an annual subscription fee of £137.50 (or free if you have a Hollis directory) you can access a searchable database of agencies.
Public Relations Consultants Association Preview: Free service to clients.
The PRCA's database of agencies can be searched by a variety of criteria including location, size, specialisms, experience.
The second group consider themselves more as consultants and can help you actually make the choice (although the AAR also offers a simple search facility):
AAR: Founded in 1975, originally to help advertisers find agencies, the AAR started getting involved in PR pitches in 1985. Its strength lies in the depth of its knowledge of the agency world. It is paid by agencies to list their details, and by clients to come up with a list of suitable agencies (although it will find details of non-member agencies if the client has specialist needs.) Involved in 26 PR pitches over the past year.
Agency Assessments: Launched in 1988 by ex adman David Wethey this is another organisation with its roots in adland. Branched out to cover other disciplines (including PR) in the early 1990s and now focuses on client/agency relationship management for global businesses. Conducted four PR pitches in the past year.
Agency Insight: Insight tends to get involved well before any review process, often advising on the structuring of communication departments.
It audits a client's current agencies, and helps manage a pitch process where necessary. Has long-term relationships with 15 FTSE 100 firms and has managed 45 PR pitches in the past year. Six years' experience of the PR agency world.
The Haystack Group: Haystack has handled six PR pitches since it started last year. It specialises in getting involved with clients that have integrated marketing briefs. Working with up to nine consultants, managing partners Suki Thompson and Alan Thompson have also lured former Cohn & Wolfe UK managing director Martin Ellis to the firm.
CLIENT HORROR STORIES
'I attended a creds presentation with a FTSE 100 company and all had gone well until the end of the meeting. The agency got out some Playdough and asked us to model the company as we saw it now and they would do theirs as to how they would like to see it in the future.
'The client said "I have not come here to play with this but to hire an agency" and we left, pots unopened on the table. They did not make the shortlist.' Piers Marlow-Thomas, partner, Agency Insight
'I recently sat through a pitch where it was so hard to stifle yawns.
It lasted well over an hour and consisted of a succession of people reading out the Powerpoint presentation that we had been handed already. There were about 700 words on each slide.
'To make matters worse, the presentation was full of typos, they'd got the brand name slightly wrong, and they spent ages going on about their process of thought, rather than just simply telling us about their idea.'
Clare Maynard, communications manager, Unilever UK.