Friday, July 21, 2006

The $10,000 PR problem

This seems like a crazy problem, but it seems Silicon Valley is again awash with money and wants to spend it on PR - sadly though it would seem there is a shortage of people who they can spend it with - this particularly the case for those companies that want to spend about $10,000 a month. Before all the relative newcomers to PR dash out to set up PRismybag.com and soak up all this demand they should understand the real problem. The real problem is that the people who want to spend all this money want 'experienced' PR pros. This is of course where the catch lies. So many good people left the industry when the bubble burst that there are not that many great people around who have more than 5 years of experience (which is in turn driving up salaries). In addition the problem with most of the start ups that want to spend this kind of money is that they want at least $15,000 worth of service. The last of the problems is these businesses want lots of media attention and sadly since the bubble burst the media they can reach has shrunk. In any other market than Silicon Valley this problem would seem ... as silly as it sounds. Perhaps this might encourage some of the start ups to launch in another market where their $10,000 a month will go a lot further such as China or good old fashioned Europe.

108 comments:

Owen Lystrup said...

I think there's a demand on the other side as well. Since there's not very many PR pros with 5+ years of experience, PR firms and corporate companies have a huge demand for those that do.

Most jobs I have looked at (since I'm a student and do not have 5+ years of experience) are not entry level, but want anywhere from 3 to 7 years of experience in PR.

This makes it hard to break into the industry. It also makes hard, I think, for agencies to find new people, since there aren't many around with the experience.

Josh said...

Tim,

I hear you. But I think that it's even more than that. Many start ups don't need 10k (let alone 15k) worth of work each month.

I went through the crazy budget time when I was at Alexander Communications (Alexander/Ogilvy) as well and quite often companies wanted to spend more than they had a need to, because they thought they had to.

Now, I work pretty much primarily with early stage companies and am trying out a new concept (at least new to me), the 'Quick Call Retainer.' $750 bucks per month and we're available to talk with clients and answer questions. If they need action as a result of those discussions, they pay for it as needed. Link is below and I'm interested in your perspective:

http://donteattheshrimp.blogspot.com/2006/07/morgandorado-intros-quick-call.html

PR-Guy said...

Dead on, Tim,

Andrew said...

Tim has a great post on the multitude of start-ups with $10,000 to spend on a PR agency. OK, I'm one of them. It just seemed like such a nice round number to start with. Somehow it's crept-up a little bit though... Must fix that...

Tim is right (he is right on most things)... we all want PR pros. But I don't want $15,000 dollars worth of service. I don't even know what that is!

I want results. I don't care what it costs or whether an agency has to under or over service to deliver it. I just want results against the agreed budget. You commit, I commit, we all commit together.

What is more troubling to me as a Valley CMO is:

1) finding a great agency is bloody hard work. They are few and far between. At any billing rate. Few CMOs I know get the value of PR or AR, let alone the value of a good agency... I accept we are part of the problem, but...
2) finding an agency that gets your business and has a real enthusiasm for contributing to the growth of the business - harder still
3) finding an agency that understands that great ideas get funded - near impossible. They are caught in the conundrum or belief that ideas require budget prior to being generated. Bullshit. (and I am talking about real ideas, not those regurgitated from the last pitch)
4) finding a team that can explain why they should get paid more and then associate some kind of outcome with the result - well, if you find them, let me know. The most common justification - "we've been over servicing your business for six months now, you need to pay us more" - is nuts. Nuts!
5) finding an agency - the word is a bit of an oxymoron. It implies some kind of powerhouse of ideas and execution - the strength of a team. What you generally end-up funding is one very dedicated individual surrounded by some other folks - generally you aren't quite sure what they are doing but they all arrive for meetings and scribble madly into notebooks.

What is needed is a new kind of agency. One not built on billable hours and 10k budgets. Maybe one built on the power of ideas to drive a startup's growth curve? One with the courage and conviction to articulate a value proposition that resonates with the CMO of a start-up and ability to explain what the budget should be.

You see, we live less in the conceptual world of brand and reputation and more in the real world of qualified opportunities, pipeline growth and time to sale.

Until then, 10k sounds like a nice round number to start with. Agencies shouldn't let it end there. We will pay more. And I am willing to put my money where my mouth is.

aminaglia at technologypr.com said...

Andrew -
Alot of work can be done, and effective messaging achieved for a alot less than the numbers you've mentioned here. Targeted and effective relationships with influential media and analysts can be developed can maintained if you're working with a solid, experience PR rep or team. It only makes sense to work with tech pr pros who have experience relevant to your business. Ask to interview each member of the team and know who's on the phone on your company's behalf and how well they're singin' your company's tune... It also may be important to do this periodically given the employee turnover at many agencies.

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