Clients paying Peanuts?!
By Madhavi Mukherjee on Mar 6, 2008 in Indian PR industry, featured
Clients paying Peanuts?!
Missed this space in the past couple of weeks…was all over the place with events, plans and new business pitches.
Now that am back was too restless to wait for my turn over the weekend. So am back with my thoughts.
Sometime ago I had written about how it was important for the media to understand the importance of PR as an industry and respect its professionals. And how without their help it would be difficult to give PR it’s due importance. But there is one more entity who plays an equal role and needs to give PR it’s dues, which I mean literally and that is Clients!
As much as we may all want but pitch fees is still utopia to expect but what is not Utopian and is even justified is for Clients to agree to give PR agencies at least the fee they so deserve and not haggle over monies. Am sure all senior PR professionals would have experienced this at various points in time at new business presentations. The plans and concepts presented are seldom just the ordinary and I know that many of us burn the midnight oil, brainstorm and research a lot to present the best of pitch concepts and plans. The Client is all too eager and excited to lap it up the first instance…but the moment the commercials are put across the table the Client cringes to an extent to make you feel as if you have asked for the moon. As much as the fees may be, trust me, PR is still asking for peanuts as compared to all the money that the Client spends in other forms of communication. When you are invited for a pitch you are told that the brand is incomplete without you, which we agree…then why the discomfort to pay the right dues?
The haggling goes on for days on end…(am sure to get a lot of …Madhavi, it is a part and parcel of this profession..comments) but what am saying is it is not fair! People negotiate and renegotiate…they want all regions, they want dedicated resources, they want all the activities mentioned in the pitch and then they confess about menial budgets for PR. Why should you have menial budgets for PR? Why shouldn’t you understand the long term positive effects and the equity you will enjoy as a brand after a successful PR campaign and allocate budgets for PR likewise?Why would you not understand that it takes a lot of effort, a 360 degree understanding of various media operations, people skills, industry knowledge and a news sense to get your brand the required limelight…so why would you not pay?!
And the even better part is that when Clients do agree to a commercial, they start negotiating on the size and position of coverage, when it will appear, the headlines and content?! Suddenly one wonders if the Client is equating PR to Media buying?!
Even while the PR professionals study and increase their competency to understand the Client’s domain and communicate to the Media, just as we all expect the Media to respect us for what we do and not treat us as mindless mediators…we also need the support of Clients to understand that PR is a knowledge exercise… Public Relations is the Art of communicating with the masses and formulating a Scientific approach to reach out to your target audience to enable the publics have better understanding of an organisations’ objectives and intention thereby building a favourable image.
It’s a humble request to all the Clients all over who engage or want to engage PR teams and professionals…Do not haggle and negotiate to an extent to drain the communications experts of their enthusiasm and eagerness to work for you. When you are agreeing to a retainer or project fee, you are respecting the talent, the ideas and the resources that is being dedicated to build your brand. It is not a high perk, high paying, high on revenues and billing industry. But that does not mean the work and effort, the brains and sweat are any less…so just do the needful…Give PR it’s Dues 
Cheers
Madhavi Mukherjee
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On Mar 6, 2008, Nikita Merchant said:
And then, there are those who are the most demanding, least respectful and yes, occur in bad debts!
On Mar 6, 2008, Palin Ningthoujam said:
In a way Madhavi, the industry is to be blamed for this as well partly. We see many times when we are in the process of negotiation and trying to explain to the client the importance of communications like you mentioned, suddenly there will be a startup agency promising to offer the same in half the price. The argument is all’s fair in a competitive market. Some agencies can go as low as 20-30k per month. In the short term, this seems like a good step for the smaller agency but it’s sort of like pulling down the value of PR services across the industry.
One not so perfect solution could be scaling down the deliverables as you bring down the services fee. This would mean fixing the rate for every activity, which hardly we follow strictly in India.
Can we have a standardized rate of services across the industry? another utopian thought, you’d say?
On Mar 7, 2008, Shashank Jaitely said:
Yes, there are lot of companies (start ups as well as lone guns) offering dirt cheap rates who somehow get the attention of the client. It is because the client’s understanding of PR and what it can deliver is still not that mature. If a real estate giant just wants some column space on the first three pages of a business daily thrice a week, even if there is no news and if a freeelance PR person is able to do that due to his/her strong media links, that closes the deal. They don’t care about the words like “reputation” and “measurable results”. In this scenario, for the establised PR companies, to get a desired retainer becomes next to impossible.
Ideally, the clients should look into all the aspects including knowledge base and research/sector insights that a PR company can provide besides the critical elements like media and network support.
On Mar 7, 2008, Padmesh Prabhune said:
Hi Madhavi ,
You are right .. most of the clients crib for paying the fees. one of the reason I feel is because they (clients) think ‘They know everything’. It’s bascially an ‘ I know all’ attitude and moreover clients take PR as an cheaper option than Advertising…
For them Research, News Value, leg work makes no sense…
Padmesh Prabhune
Dhruv Communications
On Mar 8, 2008, newbie nonathing said:
Are you sure that it is not because PR does not offer any incremental value and most agencies are unable to make a compelling case relevant to the business of the organisation rather than merely, at best, project deliverables that do not link back to business dynamics, market, sales or reputation?
On Mar 8, 2008, Madhavi Mukherjee said:
Well, This is for all of the comments above…I would not want to give less credit to the top ten agencies in the country at least for presenting some remarkable ideas, concepts and a 360 degree approach to communication. Smaller entities will always try to eat into a healthy market share and Clients who do not think seriously of PR exercises beyond clippings dockets will go along those. But am talking about corporates who have been engaging PR in some time now, who have people at the helm of affairs who understand the importance of PR in brand building and yet get stuck at the negotiation table.
As for Agencies, I think one would have to be assertive of ones deliverables, highlight the difference in values that the Client will get for hiing them and like Palin said, if negotiations go on, bring down the deliverables… and not spread the platter for exchange of menial monies.
On Mar 8, 2008, Xavier Prabhu said:
there is no standard way to measure the output of the PR firm and that will continue to remain the core cause behind subjective price discovery on the part of clients. often, when the differential is very high it is tempting for a client to look around the value and go in for the lower offer. mind you the firm offering the lower price is run by an executive till recently with the big firm that is asking for a premium. then the temptation is all the more high – same processes, same approach, same quality talent minus the infrastructure, brand equity, access and collective expertise.
the numbers are pathetic. last week had a potential client who said someone had offered to work for 5K per month.
i somehow feel the plain numbers dont mean anything. to me even 25-30 K is fine as long as the deliverables/expectations and time invested by the agency is accordingly. someone pays peanuts and they get a monkey and are fine with it being a monkey is absolutely fine.
it happens in all the markets and all the segments. a firm needs to have a consistent logic to arrive at its price point versus deliverables and stick to it.
know also a lot of big PR firms who drop prices in order to get market entry, client entry or keep their team busy. it is done as a business decision. even this cannot be questioned as it is a logical decision taken by a CXO based on business imperatives.
will post more…
On Nov 21, 2008, beinuounk said:
dude you know what I’m talking about! soy desole