Outsourcing PR: Is your job going to Mumbai?

Agencies are being forced to tighten their purse strings, but is outsourcing work to distant lands the right way to go? Arun Sudhaman evaluates the pros and cons

Mumbai Cisco uses Text 100’s Global Resources Optimisation
Mumbai Cisco uses Text 100’s Global Resources Optimisation

Could your job be outsourced? At the risk of unsettling readers already facing inc­reasingly tense times, it is a question that needs asking. Because it appears several PR agencies are open to the idea of emulating Text 100, which launched a back-office account servicing hub in Mumbai in late 2007.

Not that the Mumbai operation, claims Text 100 aggressively, is resulting in any migration of jobs – only services, it says. But with as much as one-third of UK agency output being devoted to time-intensive, low-margin activities, according to one estimate, it is apparent the idea of offshoring PR services is gaining traction in a brutal economic environment.

‘With the current climate, it will bring it into perspective, because all agencies will have to revisit their business models,’ says LeanPR principal Simon Quarendon, who previously headed the international PR association umbrella group ICCO. ‘There is a lot of low-value work – even more than 30 per cent in some cases – that could be outsourced in the same way clients have done.’

At Text 100’s Global Resource Opti­misation (GRO) unit in Mumbai, two important services are offered. The first is account administration and manage-ment – inc­luding research, campaign analysis and media analysis. The second
is content writing, covering case studies, white papers and corporate backgrounders.

Since launching, GRO’s headcount has tripled and Text 100 GRO MD Madhuri Sen says the division is ahead of budget, and getting plenty of account management work from the UK. With clients viewing their own PR spend with a steely glint in their eyes, it is little wonder other agencies are searching hard for areas where they can cut costs.

‘It has come up in one or two client pitch briefs,’ admits one senior agency source, on condition of anonymity. ‘It comes up the most in procurement-led major reg­ional and global pitches. But marketing and PR people are starting to get their heads around it.’

‘There are all sorts of services where the margins have slowly been eroded, which can be outsourced,’ confirms Ogilvy EMEA MD Ash Coleman-Smith. ‘We would absolutely consider it.’

Coleman-Smith’s comment is echoed by many of the multinational agencies, which are already used to shifting business across national boundaries. More surprising, perhaps, is the response from local UK agencies. While a protectionist streak is sometimes evident – AMC Network MD Xavier Adam disparagingly compares the idea to the dreaded call centre scenario – most remain positive.

‘It is on my radar as something to look into,’ says Trimedia CEO Loretta Tobin. ‘My guys could be spending their time doing much more productive things.’

All the agencies to which PRWeek spoke, inc­luding Text 100, asserted that offshoring would not result in job losses, but would instead free up UK-based executives to work on higher-margin activity. ‘It might slow the growth of some additional jobs in one market – you might add those in a different market,’ says Text 100 international COO Andrew McGregor. ‘But it req­uires a behavioural shift’.

If agencies do not change how they beh­ave, clients may do it for them, particularly as large multinational companies are already comfortable with the idea of shifting work to realise a cost benefit.

‘If they are embracing it, it stands to reason it could be something we would look at,’ says Grayling UK MD James Acheson-Gray. ‘There is a quality question, though.’

Some of these questions are easy enough to answer. Sen points out it has proved easier for the agency that owns the client relationship to manage the process. Pitching to local media in other countries rem­ains the exception rather than the rule. ‘But if tech gets better, what GRO can do will only increase,’ she adds. ‘I would like to take it to clients at the pitch stage itself.’

The implication – that an executive sitting in Mumbai could eventually handle the bulk of a PR campaign – is enough to send tremors through a jittery industry. Underlying the sensitivity of the issue, only one GRO client – Cisco – agreed to talk about its experience. Another agency that uses the service, meanwhile, pulled out at the last minute.

‘Any business needs to be looking at ways to get more out of its dollar – this is the kind of economy you have to make tough decisions in,’ says Cisco global PR director David McCulloch. ‘In many ways Text 100 is ahead of the game and it may take many years for others to catch up.’

Offshoring debate

FOR
Simon Quarendon
Principal, Lean PR

There is an awful lot of leg work at PR agencies that could be outsourced to lower-cost providers. It is more about reshuffling the service portfolio so agencies can effectively do more for clients for the same fee. Global networks can reach into their networks and find work at sister agencies. It is more difficult for smaller, independent agencies but it is not impossible. It comes down to the agency being honest with its clients. What is adding the greatest value? Using a graduate account executive to do a ring-round?

AGAINST
Harjiv Singh
CEO, Gutenberg Communications

Communications needs cultural context and culture cannot be outsourced. There will be pieces that are repeatable and process-oriented, but the whole essence of PR is relationships and those cannot be outsourced. If you are sitting in New Delhi, and trying to talk to a New York Times reporter, it just does not work. It might work for accounting. Companies need to be both global and local in the way they approach things.

 

Client vox pop Would you be happy to offshore your PR?

YES
David McCulloch
Global PR director, Cisco

Most of the work [that GRO handles for us] is time and research-intensive activity.

If we were not using them, our junior staff in San Jose would be doing that work. Instead we have them doing what they do best: social media. It helps that there is a cost differential, but the huge opportunity is a quality team of people who can work overnight while we are sleeping.

NO
Mike Bartlett
Chief press officer, BT Group

It is important that offshoring does not impact on a client's experience. Any deterioration in the latter may lead to an agency losing an account and in today's climate, that is not something agencies can afford. That really would be cutting off your nose to spite your face. Agencies must do whatever is appropriate to help deliver the most efficient service. Provided that service is not compromised, nothing should be ruled out.

MAYBE
Charles Yap
Global director, public relations, InterContinental Hotels & Resorts

At all times, it is essential we use our time and resources wisely and ensure we make every dollar go further. I am open to agencies recommending offshoring initiatives as long as the quality of work is not compromised. As long as the third-party supplier is well briefed on needs and expectations, I believe offshoring can be a very good and cost-effective solution for certain types of work.

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