Academic journal article Public Relations Journal

Firms a la Carte

Academic journal article Public Relations Journal

Firms a la Carte

Article excerpt

Firms a la carte

A decade ago, business relationships between public relations firms and their corporate clients were in an era of carte blanche. The familiar pattern was for a company to employ one firm, usually on a continuing retainer, to handle and control every public relations function not performed in house.

Since then, however, the traditional relationships between corporations and public relations firms have been profoundly altered in ways that are little documented and, in many cases, not very well understood. Today's public relations business climate is so complex as to stymie attempts to describe the "typical" firm/client relationship.

"Public relations has grown and changed immensely, there's no doubt about that," comments H. Ward White, president of Golin/Harris-East. "But each of us is experiencing a different part of the elephant. Maybe I'm touching the trunk, while you're touching the leg."

Today, a corporation's use of public relations firms is much more likely to be "a la carte": The company may have a different, highly-tailored relationship with each of several firms, including, perhaps, a large firm, one or more specialty or "niche" firms, and various independent counselors and freelancers. Often, these firms will serve a host of corporate, divisional and marketing managers within the same company.

Yet, at the same time that specialized relationships and specialty firms are proliferating, there is a recent countertrend for the largest firms to seek to capture (or recapture) all work from the increasingly global (though also increasingly decentralized) corporate entities.

One thing is clear: As there organizations decentralize and downsize corporate staffs--and simultaneously recognize the growing strategic importance of communications issues--huge amounts of new business are flowing out of corporate public relations departments and into firms. Consequently, both big firms and the public relations field as a whole are getting ever larger.

"Public relations is a new business today, not at all like it was even five years ago," sums up Thomas J. Mosser, president, U.S.A., Burson-Marsteller. "Then, it was just publicity and press releases, but today it's all forms of communications and counseling."

"I am stunned by the size of agencies today," says Robert L. Dilenschneider, president and CEO of Hill and Knowlton, which chalked up billings of $1.45 million in 1988. "When I entered the business 23 years ago, the top 50 agencies didn't bill what H&K bills today. The amount of fees being paid is extraordinary. And I think it's going to continue."

In 1988, the top 50 firms in O'Dwyer's listing billed a total of $876 million--a 149 percent increase over the 1983 figure of $352 million and more than six times greater than the 1978's $140 million.

"The big firms have grown immensely, and I suspect that their share of market is greater than it used to be," comments White. Still, no one is really sure, because no one knows the true size of the total public relations industry. There are thousands of small firms, units of advertising agencies and individuals at work in the business, and almost everyone agrees that they, too, have seen enormous earnings growth in recent years.

For smaller firms in particular, however, the flip side of getting a crack at more project work includes cash flow and staff allocation uncertainties that come with fewer year-to-year retainers.

Is it any wonder that public relations professionals sometimes fee they're living in a maelstrom of change? To better define major trends in client/firm relationships, and predict the extent of their longevity and possible consequences, we interviewed more than 20 corporate and firm executives and independent counselors from across the country.

Most interviewed said that the sea change going on in client/firm relationships is resulting largely from several major factors: changing organizational structures in corporate America; the intensified corporate demand for greater cost efficiency and accountability in all practices, including the hiring and use of service firms; the growing specialization of firms in response to these corporate needs; the greatly increased attention to marketing and marketing communications; and the opportunities afforded by new technology. …

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