Commentary

Media Agencies, Are PR Firms Eating Your Lunch?

Edelman recently hired a former Leo Burnett exec, Mark Renshaw, to lead its global brand practice, becoming one of the largest PR organizations that has begun creating paid content for general audiences rather than only focusing on securing editorial placements.

This is a big deal.

I know first-hand that the landscape is rapidly changing. I’ve seen a number of innovative agencies doing really cool things with paid media, including Weber Shandwick, Cohn & Wolfe, and Ketchum, and it’s a significant development.

Media agencies have long been the go-to resource for all paid-media initiatives. They’re the ones with the expertise in all forms of advertising, and many have at least a half-century of experience in media acquisition. But over the past year I’ve noticed a new trend developing, led by emerging innovators: PR firms that are moving into that space. It’s not as if they’re targeting paid media per se. It's more that they are using their storytelling skills to push deeper into the funnel, creating campaign videos that drive consumers to purchase. And guess what? The brands are pretty pleased with the results they’ve seen.

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But note: PR firms may not be intentionally competing with their media-agency counterparts for the paid media budget. Rather, they may be just responding to key drivers in the marketplace, which happen to stem from consumer expectations, the evolving PR industry models, and the brands themselves.

Let’s start with the consumer. In many ways, we're more jaded than ever, and far less likely to be swayed by claims that a product or service is going to improve our lives or fix a problem. At the same time, we crave authenticity, and are open to listening to real stories, told by real people. This is a profound change; as the consumer’s media consumption patterns evolve, the lines between editorial and advertising blur.

Which brings me to PR firms. PR firms excel at storytelling; it’s their raison d’etre, after all. And, sometimes, they know the best way to tell a story. They’ve seen how well television and movies use storytelling to connect emotionally to people. Now they’re leveraging video to build emotional ties with consumers in every step of the customer journey, across all paid, owned and earned media.

PR firms also know that when it comes to branding, some stories are best told via longer videos (I’ve seen some that are up to 9 minutes), while others are best told using a series of short ones. PR folks will use the standard 15- or 30-second spots when appropriate, but they’re not held hostage to it; they let content dictate for format.

Their other advantage: they know that consumers listen best when it’s their choice to listen. That’s why they look for opportunities to capture the consumer’s imagination -- placing the video inside a contextually digital environment -- then let the consumer decide how and when to engage with their messages. Of course, media agencies can do this, too.  But there’s nothing stopping a PR firm from doing this.

Brands, meanwhile, have taken note of this phenomenon. Thanks to stellar campaigns -- such as Cadbury Glow and Apple’s Shot on an iPhone -- savvy marketers have learned that story-driven content is far more effective than the traditional way of doing things. That’s why they’re turning to their partners who are the masters of storytelling: PR firms. And they’ve enjoyed amazing campaign results.

Anthony Chiaravallo, VP of Paid Media at Cohn & Wolfe agrees.

“We run quite a few paid media campaigns for clients in the CPG space, leveraging data analytics in real time to inform strategic marketing decision-making. A recent campaign for a major CPG brand burst through the clutter and delivered transformational results, using native audience testing and brand sentiment surveys that achieved an astounding 12% response rate.”

Here’s another example: Land-o-Lakes, like all food manufacturers, knows that consumers are keenly interested in the stories behind what they eat. To tell its story, the company -- along with Agriculture Secretary Tom Vilsack -- co-hosted Fields of the Future, a live broadcast about the future of farming and the role of agriculture in solving tomorrow’s food security challenges through innovation, sustainability, and technology. This is storytelling at its best, and the campaign results prove it.  Some 100,000+ consumers viewed the video in its first three hours.

All of this raises an interesting question: will their strength in storytelling prompt PR firms to move deeper into the customer journey, driving awareness and motivating purchase intent, closing sales, and competing with media agencies for the full paid-media budget?

To be sure, many PR firms sense opportunity, and are seizing it. Each quarter we see PR firms build out their teams, offering editorial, content development, paid advertising, and distribution -- all under one roof. For many brands, the single-necktie approach is less frustrating and more efficient, because they only need one phone number to call, and one set of creative and strategy sessions to attend. More important, it means they can count on unified messaging across all of their digital and PR initiatives. This is a significant development for those brands that have struggled to breakdown the silos of their campaigns.

Does this mean that media agencies are now shut out of the paid-media business? Of course not. Paid-media campaigns at PR firms are still small in dollar size. And plenty of PR firms still lack paid-media practices, and those that do are still nascent. But the new practices are growing, and they’re working hard to communicate their value to their colleagues who lead the account teams. And if PR firms continue down the path of integrated services and offer programs that move further down the funnel and tie to purchase lift, might agencies find themselves disintermediated?

As a veteran of several upheavals in the marketing industry, I’ve learned to be optimistic. Today, PR firms may be eating some of the “food” on the lunch table. But in the future, that table might just get bigger to accommodate the new and expanding world of story-based marketing.

3 comments about "Media Agencies, Are PR Firms Eating Your Lunch?".
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  1. Ed Papazian from Media Dynamics Inc, December 14, 2016 at 10:55 a.m.

    PR firms are primarily used for sales promotion or brand image shaping activities by advertisers, not media planning or buying. The two functions are usually performed separately, though advertiser marketing execs supposedly coordinate them. I don't think that the agency media shops need worry too much about PR types "eating their lunch".

  2. Len Stein from Visibility Public Relations, December 15, 2016 at 9:21 a.m.

    I agree with Ed. These one-off paid media content plays are not in the same category as media buys. Since publications demand original content, there's no fee to scale for PR firms. Of course, when they manage to produce something interesting, i.e. a video, it can reach the masses via social, but this is a viral charge, not a paid strategy.  As for PR firms producing quality video, show me. They've tremendous competition from agency creative powers and the major consulting firms moving into the content space.  

  3. Rick Thomas from MediaRich Marketing, December 15, 2016 at 11:52 a.m.

    I'm in total disagreement with anyone that thinks this isn't a huge story and that these PR firms won't compete.  Yes most PR initiatives have lower budgets and don't have the same access to the same information as ad agencies to make competent media buys from a numbers standpoint. But brands are looking for new ways to reach out to consumers beyond buying commercials.  PR agencies won't buy commercials but they sure will look to created product integration opportunities on radio and television, radio promotions outside of media buys, creating video content that can live forever with broadcast and digital partnerships and on and on.  

    It's already happening.  One ad agency called me and said they can do media buys but need help in the product placement space on television.  Most of that in my experience comes from PR agencies I partner with so now even ad agencies are now being asked to develop PR based efforts beyond normal media buys.

    This is a big deal no doubt.  Looking forward to taking advantage of this effort.
         

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