Tom Foremski posts today advocating PR firms to automate as much of their business as possible. He writes ‘…without a significant tech component PR is at a big disadvantage because it can’t scale, it can’t grow without growing more people.’
This is true – on average PR firms spend sixty percent of their revenues on staff costs. Tom suggests that competition from other sectors, from advertising to SEO, will force PR firms to automate as many elements of their business as they can. You’d have to be short-sighted indeed not to witness the turmoil the Internet wrought on the media sector and to think the PR industry could escape unscathed. We’ve all enjoyed those inter-agency meetings when the topic of digital and social media comes up, and every agency makes a dive for the brass ring.
But while undoubtedly change is being driven by the intensifying competition between disciplines, that change tends to be in developing new services and capabilities, rather than automation of current practices. Right now, I think a bigger driver of automation is the huge talent shortage PR firms are facing. The more we can disconnect revenues from headcount, the better. The challenges in recruitment are a primary driver for investment in automating technologies. The biggest barrier to growth at this stage of the economic cycle is a PR firm’s ability to hire and retain talent. If you can break that cycle, and put more revenue through fixed staffing levels, you can get headcount-free growth. And that means higher profits.
So the incentive is there – whether short-term profit incentive or through seismic technological change. But surely you can’t automate PR? [Cue shocked expression as we perch on our creative high-horse.] No-one is suggesting that strategy, ideation or relationship building can be automated. You might be able to systematize elements of those but they are fundamentally human. But look at accounting – the whole process of double-entry book-keeping is now a huge software industry. Look at the legal industry with online apps such as LegalZoom making the bottom-end of the market self-service. Surely the routine elements of PR should be turned into software? What is a tool like Vocus if it isn’t just that? I hope we don’t just stop with the replacement of Ben’s media directory.
Savvy agencies are developing their own IP in the form of tools and technologies. Most of these revolve around research, collaboration and evaluation at the moment. The incentive to do that is threefold – first it’ll automate dull activities which is great for staff; second, it gives the agency a ‘magic widget’ which you can’t get elsewhere for clients; and third it increases the agency’s valuation for the same reason. Anything which frees up staff from repetitive activities to be more creative should be embraced. Sure, it cuts out the less-skilled administrative roles, but most people aren’t attracted to our industry for that.
As an example, way back in 1997 we developed Virtual Press Rooms, which clients paid a subscription for in order to get their press materials online. It had streaming video before YouTube and gave metrics about who had viewed the content. It gave us a revenue stream independent of hiring new staff which was hard back then. In another area, we’ve developed our own evaluation platform, LSCORE, which pulls together media and social metrics for campaigns around the world and presents them consistently. We don’t charge for that, but it saves a hugely manual and time-consuming task with a better outcome.
So I’m all for automation. It’s inevitable and desirable. Bring it!