Cut the PR Agency? Are You *Sure* About That?

It happened today. The economic angst whacked our agency upside the head. We now have our first example of a client who’s asked to terminate our contract “strictly as a precaution driven by economic uncertainty.”

It seems Sequoia Capital’s “Mandatory All-Hands CEO Meeting” last week, with its gloomy slide deck, has tech CEOs skittering for cover. But folks who rely solely on the VCs’ slideshow to make crucial decisions do their companies a disservice: it seems there was a lot of other valuable conversation happening throughout the Sequoia event.

For example, Georgia Tech’s attendee, Lance Weatherby, has a good round-up that includes this gem from Sequoia’s own Doug Leone:

• Nail your Sales and Marketing message.
• Pound your competitors shortcomings. They’re hurting and they will be quiet. Take the offensive.
• In a downturn, aggressive PR and Communications strategy is key.

You didn’t see that in the slide-deck; and you didn’t hear any of the bloggers who weren’t at the Sequoia event note this all-important point. Leone’s advice echoes the quote I recently reprinted from a Spring article in the Harvard Business Review:

“It is well documented that brands that increase (marketing) during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.”

I acknowledge some bias here, and I also roundly applaud any company that’s focused on profit. If you need to choose between “making payroll” and “getting PR,” the former wins, hand’s-down.

But cutting marketing dollars (in general) and PR (specifically) out of blind anxiety is both arbitrary and foolish.

Let’s count the ways in which Agency PR should be the LAST thing you cut…

1. Agency PR is more cost-effective than in-house PR. The VP of Marketing is not going to create and manage databases, craft pitches, write press releases, and, spend hours each day reaching out to 50 reporters (and another 150 bloggers). They’ll need a senior PR pro to handle those sundry duties – and, with salary and benefits included – that senior PR pro will cost about $150,000.

A good PR agency will do “all of the above” and will spread the work across FIVE people, including a senior strategist who can offer experienced counsel; two or more media bulldogs; and, a dedicated industry researcher – for about $150,000.

2. A further virtue of an Agency’s distribution of talent? The PR firm is always listening and responding. When a blogger posts about your brand, a speedy response is critical. If you place all your bets on in-house personnel – who are often distracted with myriad corp comms duties – you could miss an important meme.

3. A PR agency also grants access to the wickedly expensive media databases (Cision, Profnet, etc.). These resources help ensure your company does not miss out on those all-important industry round-ups. (As Leone noted, staying visible is even more important when your industry is shedding weak competitors in a downturn – you don’t want to be “noticeable by your absence.”)

4. PR “feeds the beast” of SEO by ensuring your company’s content shows up in both Social Media and Mainstream Media channels. Most PR agencies have been whipped into shape on the SEO front by their Google-hungry clients, offering googly expertise that’s always being honed by industry dynamics.

5. PR provides air-cover for the Sales team. The big benefactor when Marketing is cut is the Sales group. But what’s the Sales department’s #1 gripe? “Not enough people know about us! The sales cycle is too long because I need to spend too much time educating prospects about our product and our viability.” Paging the PR firm!

Today, the stock market rallied, posting its biggest one-day advance ever. Strong and concerted measures are being taken to loosen the banking industry’s credit clamp-down. Let’s not panic, folks.

Prudent cost-cutting? Sure, that’s a great idea. But freaking out? Cutting the single most beneficial and cost-effective means for keeping your company front-and-center in the marketplace? Cutting-off the conversations you’ve started in the Social Media sphere?

That’s no way to save a company.

Continue reading here: Of Stars & Schmoes: The Mandate to Synch Social Media & Customer Service

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