What is the future for the Public Relations Agency industry? The debate started across on Forbes, continued on FIR and we add our own suggestions from an interview taken for the source material for our book, “The Creative Agency of the Future“, being written now.

What is the future for the ‘Innovation’ industry? We asked Dr Shamus Husheer, inventor of the underlying technology behind DuoFertility

Questions: What are you doing differently in the past 2 years in….

Human resources

We have used a series of agencies over the past couple of years.

The single most common issue we’ve had with most of our web marketing agencies and freelancers: numeracy!

Public Relations Agencies

I understand that the average PR person used to be a journalist, and then decides to go off and become a PR advisor or a marketing freelancer and the only way to get work is to tout your major successes. You probably don’t have a strong background in maths and statistics. When you pitch a client who is all about engineering, physics or statistical analysis – the first thing not to do is to put hyperbolic stats up about the billions of people who read the coverage from your reference client! This seems to be particularly common in the big agencies not the individual freelancers.

Audience views in the industry seem to relate to fiction. If your media “reached” 1.5bn impressions when there are only 0.5 billion native English speakers and 2 billion people who understand English, this is clearly not credible – you’re implying that everyone in my apartment block read it, yet even I haven’t heard about it.

It doesn’t pass “face validity”!

Tip number2: Have some realistic understanding of the difference between the number of people in the prospective audience versus the actual audience. So you got the Associated Press to run something in their online platform – but it doesn’t’ take much homework to figure out whether anyone actually picked that up or not.

When the Client goes and Googles that major success you claimed, and can’t find anyone picking it up except the AP link, you look very foolish.

Agencies, and their clients, should understand that the key benefit an agency should be selling is ‘did we take up a client’s relatively boring non-story and sex it up enough to get significant publicity’.

Digital Agencies

Do some ‘social media homework’. The usual pitch is about how “we’ll spread this socially” and give you wild coverage, e.g. by posting to your Twitter account. But really – what is the likely chance of people retweeting? – Your agency account is only followed by clients or other agencies – who will pick up on it and how will it reach millions of people? If your client already has 1m followers, they sure as hell don’t need you.

They often have no idea of the number of people who read something before it has impact – or the number of followers before anything will happen. The power law – almost everything happens in a very small number of twitter accounts who have lots of followers. Unless you know how you are going to get one of these accounts to RT, you look foolish.

“We are going to make a viral video” The idea is great – but I ask them how many videos you watched last week? Maybe 50? Then I asked how many videos agencies uploaded last week to You Tube (where 3 days of video is uploaded every minute). Your chances of ‘going viral’, particularly for anything with a commercial message, are microscopic. Be honest about that.

Don’t turn up to a company with a sensitive topic and suggest that ‘going social’ with it is the route to go!

A real example

We had a big agency describe their plans on how to create a viral presence for our product. Their strength was producing low-cost videos – the example was Cadbury’s gorilla. I found it cost millions. Why say you can do cost-effective video and quote that as the example of what you can do – you need to compare to the successes of other similar work (preferably executed by you). They don’t seem to get that there is a difference – they really don’t. It’s like selling someone a used Honda by pointing at a brand new Ferrari.

The main concern they seemed to have was whether they would get an award as an agency for the campaign [The client sees this as a disregard for their business].

Mention that your client’s products won awards as a result of your work, or some other useful business metric.

If you come to talk to us about online marketing please talk about it in numbers. This is fine when you send me your top SEO guy and we talk technical about your software and split tests. But then I hire you and you put a junior muppet on the case and I have to teach him how to use GA – and then when I have to teach the top guy the maths behind confidence intervals and AB testing. That leaves an extremely bad flavour. If you don’t have proper statisticians to do it then rely on believable software to do it for you – and be able to explain to your engineering minded client what that software is doing.

These agencies seem to be full of innumerate people who believe they get the copy right first time and do lip service to testing…. show me how you have taken the client’s campaign and show me the split testing conversion from 4% to 40% and how you didn’t get there in one jump – but did 20 iterative things to get there. Because if you get there in one jump you were lucky. Show me you can actually do it and did it with a plan that was consistent.

If I see an agency doing a worse job than I do in my spare time it’s just bad.

We have been through 6 agencies and 6 freelancers in past 4 years.

We use a freelancer who is clear that she is not a statistician and she knows that she makes a suggestion, rationalises the suggestion to me and then asks “how do we make sure this meets your needs for the numbers you want?”

Golden question – we offer free pregnancy tests but it will not be delivered for 4 weeks.

So someone who is anxious about it won’t respond because she wants to know NOW. But someone with problems getting pregnant will go for this.

There are lots of ovulation apps for iPhone – they are doing it for pennies per user value – we offered $20 per conversion to our high-end product and they loved us.

Find media segments that are bang on your target market, but eking out a living on poor quality advertising and you can do a cost per acquisition deal.

We are funded by an Angel Group and we share information between other investee companies. If you do good work with us, you’ll get noticed by the others. We have had people offer to do revenue shares, base plus commission – a digital agency offered to work for GBP3,000 per month with a cost per customer on top. This was a nicely aligned incentive.

The problem was they quickly worked out that they have massively over-estimated market demand, reach. They hadn’t done their own homework.

So their payments were base plus sod all! That gets them defensive about not hitting their numbers plus the management of the agency is on their back as well because after you take account of the internal resource and advertising spend, we became a loss-making client.

It is a good way to get into a client. “You don’t know us; we’re willing to share risk of getting on board with you. Let’s do a base plus incentive”. This shouldn’t mean you’re working at a loss, but should mean that you believe you will do well if you hit the business requirements of the client. This arrangement also doesn’t have to be forever, but if you offer to do it for, say, three months then at the end of that time you have either excelled and everyone’s happy and you have a client on whatever terms you chose, or you move on.

For example, we had a PR freelancer work with us on a cost-per-square-inch-per-circulation for print media, and a cost-per-second-per-viewer/listener for broadcast media. This worked wonderfully because she immediately understood that a local business paper, though easy to get something into, would get her about £10 – and so she focused on getting the same story into the nationals.

They get our market and have the onus of doing the homework. If that is in the spirit of the agency really doing their research on the customer. Think of it as a probabilistic loss-leader and to demonstrate you are prepared to innovate and take risk.

But you need to be doing this kind of arrangement to demonstrate that you understand your client’s needs and understand exactly how to hit your numbers – not because you’re doing it for a stupidly low base and any upside is luck. You won’t get paid and you’ll think this is an awful way to work – when really it just means you didn’t know your client, their customer, and your route to them through media. You have to ask why, if you won’t work on a pay-per-outcome basis, any client would ever want to work with you on any other basis?

Taking equity in startups – if you have a savvy CEO your message is “you are not able to sell you shares to your investors at a rate high enough to pay my bill!”

The people who say ‘no just bill me’ are the ones who have investors ready to put cash into the business – they are the clients you want. As a bonus, I won’t have an agency on my shareholder list who complains when I hire a new agency!

Caveat you can do one better than this. Make the proposition, but then say – ‘but I understand that your company stock is likely to be valued so highly that you would never agree to such a deal, so if you prefer I’m happy to be paid in cash’ (which is usually what you want anyway!).