New Research Uncovers Practices and their Influence on Client Satisfaction with PR Agencies.

Organizations worldwide last year spent $15 billion on outside public relations counsel and services, estimates The Holmes Report, retaining from among tens of thousands of agencies — ranging in size from large multi-nationals to single-counselor operations — vying to represent the brands and reputations of corporations, non-profits and government institutions.

While public relations trade media and organizations do a good job tracking and recognizing agency new business wins, agency/client programs and innovations, and other sector-wide developments, one issue has received scant attention until now: how organizations go about identifying, evaluating and ultimately hiring public relations agencies.

Do client organizations treat the hiring of a communications/PR agency as they do the hiring of a mid- or senior level executive? Do they vet numerous candidates, create and issue a “job description” (RFP), retain an outside firm and/or employ technology to qualify candidates, and conduct interviews (presentations), and narrow the list, before appointing the very best agency to serve the organization?

RFP Associates and CommunicationsMatch™, with the support of Researchscape, decided to explore these and related questions by conducting the first national study on the public relations search and hiring practices of Fortune 1000 companies and large associations.

Our research, “The Impact of the Agency Selection Process on Public Relations Programs and Outcomes,” revealed that while chief communications officers and senior public relations executives allocate significant budgets for outside public relations services – often bringing in multiple agencies — they typically employ an approach to agency search and hiring that bears little resemblance to the manner in which their organizations would go about hiring mid- and senior-level executives. For example, only 40% of respondents said they check agency references for verifying work, experience, and performance. Other key findings:

■ Too small of a net is cast — About two-thirds of communications executives said they rely solely on their previous experience with, or knowledge of, public relations agencies, and word-of-mouth from peers, to identify just two to five agency candidates at the beginning of a search. Respondents indicated a limited use of search consultants or even online tools or resources, in contrast to employee recruiting, for which executive recruiting firms, local joblines, LinkedIn, or national services such as Indeed are typically utilized.

■ Not all requests for proposals (RFPs) are created equal, and many lack sufficient information required by agencies to respond most effectively — Only a little more than half of respondents said they provide budget information or selection criteria in their

RFPs, and fewer than three in 10 include confidential information which would presumably be useful to agency candidates asked to develop effective communications program ideas during the “pitch” process.

In terms of the agencies they hire, communications executives overall reported high levels of satisfaction (65% said they were “very” or “completely” satisfied with their agency), but a closer examination revealed some trouble spots:

■ Agencies underwhelm during the RFP process — Significant numbers of respondents reported shortcomings on the part of agencies in their responses to RFPs, noting that agency proposals and presentations are often seen as boilerplate, agencies seem to be “upselling” during the process, and agencies fall short on their response to the scope of work and program goals, budgets, and staffing requirements.

■ After the contract is signed, some aspects of agency performance are troubling – Consistently, about 40% of communications executives were only moderately or slightly satisfied with agencies’ performance. Agency proactivity, account coordination, quality, staff turn-over, meeting objectives, meeting budget and deadlines were all issues of concern for respondents. Seven in ten respondents were moderately or less satisfied with agency proactivity and 44% with agency’s meeting objectives.

■ Executives with PR agency experience are tougher on themselves and agencies – Communications executives with prior public relations agency experience consistently indicated lower satisfaction than their peers without agency backgrounds on such measures as available resources to identify agency candidates, the number of agency candidates identified, the method to shortlist candidates, and the qualifications of shortlisted agency candidates.

■ Higher-compensated agencies receive lower marks – Communications executives reported healthy public relations agency budgets, with 25% indicating they paid their most significant agency more than $1 million annually, while one third reported spending between $250,000 to $1 million a year. Interestingly, however, respondents who hired lesser-compensated agencies consistently reported higher agency satisfaction levels.

These and other findings led to these core conclusions: (1) Client organizations are not evaluating candidate agencies as strictly as they would candidate employees; and (2) A better, more comprehensive agency search process – one in which organizations accord the same level of research, due diligence, review and evaluation as they typically do when hiring a mid- or senior-level employee – delivers better outcomes, leads to the selection of an agency that meets or exceeds expectations, and results in longer, more productive, and presumably more cost effective client-agency relationships.

We’ve included recommendations in our report, and invite you to download it here and let us know your thoughts on the topic.

Steve Drake and Robert Udowitz are principals of RFP Associates, a communications agency search firm. They founded RFP in 2011 after observing the agency selection process from “both sides of the aisle” and recognizing the need to streamline and improve the way searches are made and agencies are selected from an honest, unbiased approach. For more information, visit the  RFP website or follow on Twitter at @RFPAssoc. 

Simon Erskine Locke is the Founder and CEO of CommunicationsMatch, an industry-leading communications agency search services platform.  For more information, visit the Communications Match website on follow on Twitter at @CommMatch

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Heidy Modarelli handles Growth & Marketing for IPR. She has previously written for Entrepreneur, TechCrunch, The Next Web, and VentureBeat.
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