Thursday, June 13, 2013

PR agency business model will change -- driven by analytics -- clients will demand it

Mark Stouse
VP, Global Communications
BMC Software
Mark Stouse, VP, Global Communications, at BMC Software, writes in the June 2013 PR Week, about changes in the PR agency business model that, he thinks, are coming:

"Agencies must be a lot picker about who they bring in. Clients want teams with more smarts and less on-the-job training. This change will drive a new financial model. Firms have not invested enough in analytics-driven programs, preferring to leverage their people's industry knowledge. We're in the era of big data. The trust gap between an educated guess and real insight is deepening. The consequences of getting caught on the wrong side will be huge.

"As part of a new model, agencies must integrate strong analytics capable of informing and maximizing a campaign's impact. Leveraging smaller, smarter, more powerful teams will be key to future success.

"Agency rates are tied to labor costs, which is no guarantor of value. Time and materials billing is a dead man walking. It is being swept aside by flat quarterly fees and piped into analytics."