Don’t trust without confirmation!

Posted by Viktor Pashula on August 24, 2009 under Articles/Cases/Analytics/Advices | Be the First to Comment

3-4 month ago during the crisis hysteria and blaming each other in economic breakdown I received lots of mails from PR agencies with «unique» anticrisis programs for finance company. All of them were similar. It looked as if their authors attended the same short seminar by “PR gurus” and was enlightened. So, with the help of those theories they started to find clients – losers.…
The problem of cooperation between finance companies and PR agencies was covered a lot, either before or during the crisis. I would like to stress on the other side of outsourcing bringing money to “unique specialists” or careful PR agencies.

My CV contains such jobs as journalist, advertising agencies CEO, and PR manager at financial companies. So, my friends asked me for the independent audit of financial company that was working with PR agency N*(I won’t name those companies, although they are not business partners any more).

After analyzing tremendous reports about PR success due to “internal PR manager – PR agency synergy”, I’ve mentioned to myself that an agency used mostly its own brand while communicating the client’s messages. This was made for enlargement agency’s first part role. It’s a shame, that contract between company and agency didn’t contained argumentation for such issue. At the same time, I was shocked with content analysis results which demonstrated high mentioning. The independent experts’ verification didn’t approve such perfect agency results.
Deep analysis showed that agency counted all brand mentioning without any ranging. Even if its own press release contained 5 brand’s mentioning, this number was added to counting and not one (when naturally it’s really goes as single mentioning). In other words, if you have 5 press releases with 5 brand mentioning in each release multiplied by average quoting ratio 10 and you will get 250 (!). The only thing left is to add advertorials and in the end client is looking at PR report with so much beautiful but so much fake numbers.

I won’t be commenting on the content of PR materials. Mostly those materials were written as advertorials so couldn’t reach audience that has to decide itself on what to buy.

To tell the truth, I was a little surprised to find out that there was a single company providing advertising and PR activities … PR agency N*. How is it possible? But there is more! As we all know, honest and fair cooperation between the Client and Agency includes:

• An agency uses all the discounts it possesses when there is a need to issue a publication. If there is a need, client cover all the expenses for media accommodation, except for agency discounts;
• An agency gives all free PR bonuses it possesses from media accommodation to the client; the client doesn’t have to pay for PR bonuses;
• An agency gets from the client only an Agency fee (10% and more).

In our case there was a clear manipulation scheme. An agency sold FREE PR bonuses to the client. An agency didn’t use its discounts when placing the ads. Moreover, an agency differentiated discounts for regional issues of the same edition. Even though, every media buyer knows that working with media holding or edition an agency gets a single discount for regional issues. Naturally, despite all that budget tricks, client paid regular agency fee for PR and advertising services.

I did objective recommendations to the client – only the truth and nothing but the truth about an agency. Later during informal meeting with PR agency N* CEO he told me that there was a BIG difference between information that Agency gave to internal PR manager and information this guy showed to the TOP managers. An agency recommended not using some instruments but PR manager himself insisted very often. It’s a pity but during the crisis thesis “if you pay, you will be in charge” wins over the professional attitude towards business.

Knowing double-sided Slavic essence President of USA Ronald Ragan said to Mikhail Gorbachev in 1986 during official meeting: “Don’t trust without verifying”.