For Agencies, Working with Clients on a Shoestring Can Be an Acquired Taste

????????????????????????????????????????It’s not entirely new for global PR firms like Ogilvy PR and Edelman, among others, to make a run at emerging VC-backed companies who need communications help but are on a shoestring budget.  Every few years — either just before a so-called bubble, like the dot-com boom or right in the middle of one — big firms seem to act on the fact that they may be missing out on opportunities to work with potential rising stars.  Or, that they are simply leaving money on the table and have the resources and chops to chase many of the same prospects that have typically been the domain of boutique and mid-size firms.

Why not? At the turn of the last century, global firms did pretty much the same thing to take advantage of the plethora of VC-backed emerging Internet companies.  For example, a number of firms owned by communications holding companies like OMNICOM and WPP created so-called “conflict brands.” With a conflict brand in place, a global PR firm who had a company like HP as a client might also take advantage of the opportunity to work with an emerging VC-backed company that was actually competing with HP in one market or more. The conflict brand would have a different pricing and staffing model, different value set, a less is more approach and firewalls in place — all of which made them appealing to smaller, emerging brands.  But clients mailed their monthly retainer fees to the same address as did clients of the parent brand.

In other cases, a global shop would set up a sub-branded firm (a firm within a firm) that wasn’t necessarily set up to handle conflicts but did specialize in working with start-ups. These sub-branded firms, as did the conflict brands, had stronger appeal to the start-up technology segment — I.E., working with a cool, fast-moving edgy firm vs.  a more bureaucratic, stodgier parent brand.

Of course, the plan was to transition the small client from the sub-brand to the parent as the client grew and thus keep it in the portfolio for the client’s entire life cycle — from start-up to growth to maturity.  To be honest, it’s hard to say how successful this model really was as so many of the dot.com companies were acquired or blew up without every having the chance to reach maturity.

Recently, Ogilvy PR introduced Espresso and just before that Edelman introduced Sprout – offerings specifically designed with the little guy in mind.  (Love the names by the way…surprised a firm hasn’t selected “Adrenalin” yet though.)

Edelman says “Sprout supports early-stage start-ups and small companies looking for communications counsel and high-impact support outside of the common agency business model.”  Like programs before Sprout, Edelman “scales” a program to suit a client’s needs and budget (I’m sure Edelman is finding that the “needs” and “budgets” of some of these start-ups are misaligned).  Ogilvy PR says its offering for emerging brands “includes a range of services from brand narrative and messaging through media exposure and influencer relations, all within a simple, affordable and flexible cost structure.”

Both descriptions do contain a lot of big agency speak and PR clichés (which may scare away some start-ups).  We’ve all seen too many times selling points like “scale” and “high impact” and  “brand narrative” and my fav:   “affordable and flexible cost structure.”

But the programs, in light of the big well-known PR brands and deep resources behind them, will earn their share of success – at least in the short-term.

Time will tell if in the longer term they’ll beat the boutiques and mid-size agencies at what they do best.  If they do, I’m sure we’ll hear about it.

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4 thoughts on “For Agencies, Working with Clients on a Shoestring Can Be an Acquired Taste

  1. Jim — You miss a critical component of these brands’ mission: employee retention. The Edelman release pretty much tells the story of employees coming to their management and saying they want to work on emerging companies; translation: cool companies. Why? I am convinced it is because in a bar or at a party, the conversation goes soemthing like this:

    “So what do you do?”
    “I’m in PR.”
    “Oh cool, for like Square or Box or something?”
    “No, a division of HP that makes large-format printers for engineers and architects.”
    “Oh…that’s..um…interesting. Oh, wait I think I see my friend. Well, nice talking to you.”

    Big agencies have big problems in tech, but few are willing to admit it. And putting a fancy name on the exact same offering that just happens to be in another part of the office, well, that’s not a solution…how many new client announcements have you seen for Espresso or Sprout? Yeah, me either….

    PW

    • Great points, Patrick. Yes, I saw the mention in the Edelman release re: employee retention and thank you for flagging it. And yes, I’m very familiar with the “large format printers” example you raise. Was thinking of it when I wrote the post, as you might imagine. I agree that if Espresso and Strout find success, we will hear about it…otherwise, nada.

  2. The conflict brands bring a real benefit to their shoe-string clients: global reach. Thanks to their parent companies, when they need it, smaller clients have the ability to tap a global network of support.

    • Very true, Joe. That is one of the biggest advantages of working with a conflict or sub-brand that is part of a larger, global entity. While a boutique or mid-size agency may have deeper experience working with emerging brands (though not always the case), their global networks are often “stitched” together and ineffective. Thanks for your comment.

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