Until a few years ago, clients had two options: hire a PR agency or do everything in-house. Then a number of talented people started to go freelance to gain a bit more of that oft-cited 'work-life balance', giving clients the option of hiring an independent consultant. Now a third way has emerged: the virtual agency.
This is fast looking like a real alternative for clients who won't miss an agency with flashy offices, and who want maximum expertise, creativity and flexibility for minimum cost.
Two models of virtual agency have emerged so far. Paratus Communications has a small office in London and two directors who work closely with the Xchangeteam freelance recruitment agency, which hand picks independent consultants to work for clients according to their areas of expertise.
The consultants work from home rather than out of a central office, and are involved in pitches, client meetings, projects and long-term retainer work, while the two founders provide consistency and a central point of contact.
Xchangeteam has seen demand for freelance PROs from clients in all sectors grow by a whopping 79 per cent in the past year. Chief executive Emma Brierley says this model allows clients to access tailored teams of top talent: 'We've all heard clients moan about paying for senior people but getting juniors working on their account. Virtual agencies mean they get motivated people who have proved themselves,a lean structure with few overheads, and a flexible arrangement that can be configured exactly how they want it, which really suits clients who are moving fast.'
At Honey, which has just rebranded from Leadbetter PR, the model is a virtual network of collaborating freelances, with no central office.
Teams come together according to their specialisms and areas of interest to work on client projects and retainer work, with a nominal lead from two independent consultants. It pulls in new people when needed, and is based on close, long-term personal relationships.
In both cases, the freelances involved still run their own businesses and work with other clients, not exclusively for Paratus or Honey, and many are not based in London.
Because the agencies can pull in talent from every sector of PR, there is no reason in theory why either model should not work for any type of client or campaign.
Indeed at Honey, freelance Wendy Richmond argues that there are real client benefits to working with a virtual agency: 'They are hiring people with experience who are used to running themselves and big accounts, and the work won't be pushed down to more junior people. We are all self-employed, and we do a great job because we have chosen to work in this way. Clients get the experience and a wider set of skills, and the costs are nowhere near those of a traditional agency.'
No hidden extras
Honey farms out specialist work,such as design, to trusted third parties, and ensures that all billing is handled directly by the client so there is no mark-up beyond the pre-agreed day rate. 'There is complete transparency for us and the client,' says founder Louise Leadbetter. 'Clients know the people who are working with them, plus there's no red tape and building overheads, and we've cut out all the politics and ego of the agency world.'
At Paratus, co-founder Dominic Shales says clients also appreciate how quickly they can start work on campaigns: 'Because we bring in the right specialists, with sector knowledge, experience and media contacts, they can get going immediately. That translates into effectiveness, so we can stretch budgets further because of our model.'
Part of Paratus's offering is reMnet, a regional network of media relations specialists whose local knowledge can be a real advantage over London-centric consultancies for clients who need to target specific regions.
Richmond says that if there is a downside in the network model, it is that the client can't ring a central office and leave a message with a receptionist: 'The client needs to be happy to work with various people on different things, and should be aware of that if they hire a virtual agency. But there is not a high turnover of people - those roles are pretty constant.'
At Paratus, John Rivett says most clients quickly 'get' the idea of hiring a team of committed and experienced consultants, who just happen to be freelance: 'Other clients liked our ideas but were used to hiring a group of people they could see in an office. There's no reason why we should be seen as less capable than a traditional consultancy, although sometimes companies are wedded to the idea of working with a big brand agency.'
But the virtual model does require clients to be willing to try new things: 'You have to have an open-minded client,' admits Leadbetter. 'We have pitched for work where the marketing manager has been really excited, but the board director has wanted a more traditional approach. We sit down and have a proper conversation rather than doing formal PowerPoint presentations.'
Honey client Cafe Direct chose to work with the network because it is itself a network-based organisation. Corporate comms manager Helen Ireland says she appreciated how flexible the team can be on different projects, and getting PR expertise on a restricted budget. But she says the nature of the virtual agency means that communication needs to be managed very tightly: 'As well as regular face-to-face updates, we do need to make sure everything is in place in terms of IT systems, processes, planning and organisation.'
Richmond says she can see every sign that there will be more collaborative networks and agencies who only use freelance talent in the future: 'The model has been tested, and we are confident that it works.'
The concensus appears to be that there will always be a role for traditional bricks-and-mortar agencies, but virtual PR agencies are in the vanguard of a logical and timely move towards an alternative way of working.
VIRTUAL AGENCY MODELS
HONEY (FORMERLY LEADBETTER PR)
A network of senior freelance consultants with close relationships, led by a core team with no central premises. Specialisms include corporate, strategic planning, consumer, B2B and media relations.
Key people: Louise Leadbetter ran Leadbetter PR before selling it to Consolidated Communications in 2000, and recreated Leadbetter PR in 2001 as a virtual agency. It is an informal network of experienced freelances including Wendy Richmond, who was the marketing director of the PRCA before becoming a freelance PR consultant. Top client Cafe Direct.
Encompasses two businesses: Paratus Consulting, a comms agency based outside London with a team of freelance consultants covering consumer, corporate, B2B, trade, and internal comms; and reMnet, a team of media relations experts in the UK regions. Paratus sees the model as a logical development of the move towards freelancing in all areas of work, as explored by Dan Pink in his book Free Agent Nation.
Key people: Dominic Shales previously V-P of marketing and business development for Hill & Knowlton EMEA, and John Rivett, former deputy CEO of H&K UK. Top client Camelot.
Mark Gallagher, director of corporate affairs, Camelot
'Over the last two years we have radically improved Camelot's PR performance by taking some equally radical decisions. We have repopulated and restructured the entire press team, relocated it from the Watford HQ to an office in Central London and set very ambitious monthly, quarterly and annual performance targets.
'We decided to take a similarly radical approach to the delivery of our regional PR - and Paratus offered that.We're not paying enormous fees to fund a network of expensive regional offices.All our money goes to front line PR talent, tightly co-ordinated by a hand-picked account director operating out of a cost-efficient London hub.
'The Paratus model allows us to hand pick the PR talent we want on the front line, and because there are not layers and layers of client management, we get to establish a direct working relationships with each consultant.
'That allows us to nurture expertise and enthusiasm for the company, the products and the institution of the lottery itself.
'The job needs unusually strong advocacy and the relationship between client and consultant offered by Paratus allows us to deliver that.'
BEFORE YOU GO VIRTUAL
- Working virtually depends on top-notch IT. Make sure everything is in place in terms of communications systems and tools, and processes. Investigate innovative ways of using IT to work remotely.
- Virtual working doesn't mean abandoning face-to-face contact, however, and regular meetings are essential. If anything, more rather than less communication between consultants and clients is required.
- Virtual agencies are about collaboration, partnership, and complete transparency, one must eliminate 'us and them' mentality.
- Some virtual agencies have a central office and a main point of contact, but many don't, and clients may be liaising with a number of specialists on different projects. If you love glossy offices, switchboards and receptionists, virtual agencies might not be for you.
- Personal relationships are crucial to making virtual agencies work: more than ever, clients are buying people.