The Impact of the Agency Selection Process on Public Relations Programs and Outcomes
Research Highlights/Key Findings
Multiple Agencies, Healthy Budgets the Norm
Communications Leaders Rely on Experience and Knowledge to Identify Limited Number of Agency Candidates
Satisfaction with Agencies Generally Robust, But...
Clients Less Satisfied with Agencies with Highest Budgets
Agency Longevity Correlated with Satisfaction
Communications/Marketing Background vs. Satisfaction
Comprehensive RFP Process Results in Better Outcomes
The research presented in this report could not have been completed without the encouragement and support of a number of individuals and organizations. Chief among them were Researchscape International, Tina McCorkindale, Ph.D., APR, President and CEO of the Institute for Public Relations, and Jennifer Swint, Global President and Chief Client Officer of Porter Novelli.
As our partner on this project, and on crisis communications and opinion survey services offered through CommunicationsMatch, we would like to express our appreciation to the Researchscape team. Jeffrey Henning, Founder & CEO, Tony Cheevers, Head of Business Development and Lili O’Reilly’s communications research expertise was invaluable in the development of the research and evaluation of its results. Researchscape’s survey technology is a powerful platform that made the process of executing the survey, cross-tabulating the findings and production of initial AIgenerated results reports and charts highly efficient.
The Institute for Public Relations (IPR), dedicated to the science beneath the art of public relations played a key role in this study. Two years ago, the Institute launched its Bridge Conference to encourage research and exchange between the worlds of professional practice and academic inquiry. Consistent with IPR’s mission, we developed and implemented this research – specifically for presentation at the 2019 Bridge Conference – to provide insights into the process organizations use to hire public relations agencies. The questions in the quantitative survey were reviewed and edited by Dr. McCorkindale and Ms. Swint, whose guidance and perspective were invaluable.
We are also immensely grateful to the following individuals who supported this project through their counsel, outreach, and promotion. • Susan Matthews Apgood, News Generation • Jordan Appel, Research Associate, CommunicationsMatch • Karla K. Gower, Ph.D., Director, The Plank Center for Leadership in Public Relations, University of Alabama • Paul Holmes, Founder, The Holmes Report • Sarah Jackson, Director of Communications, Institute for Public Relations • Mitch Marovitz, Ph.D., APR, Fellow PRSA, Chair PR Program and Collegiate Professor, University of Maryland/Global Campus 4 • Judy Phair, APR, Fellow PRSA, President, PhairAdvantage Communications, LLC • Danny Selnick, Business Consultant • Sergei Samoilenko, Communications Faculty, George Mason University • Fay Shapiro, Group Publisher, CommPro.biz • Susan Whyte Simon, APR, Fellow PRSA, University of Maryland Department of Communication • John O’Dwyer, Publisher, O’Dwyer’s PR • Kathleen Quilligan Sebastian, President, PRSA National Corporate Section • Cylor Spaulding, Ph.D., Faculty Director and Assistant Professor of the Practice, Public Relations and Corporate Communications Program, Georgetown University School of Continuing Studies • Kirk Stewart, Founder and CEO of KTStewart and Board Member of University of Southern California’s School of Journalism • Alexa Tahan, Program Director, Marketing and Communications Master’s Programs, Georgetown University School of Continuing Studies
Simon Erskine Locke, CommunicationsMatch™
Steve Drake, RFP Associates, LLC
Robert Udowitz, RFP Associates, LLC
When a corporation or a major industry association/non-profit seeks to hire a senior communications executive with an annual compensation package of $150,000 or more, the organization’s human resources department springs into action. It may retain the services of an executive search firm to provide support and identify qualified candidates. It solicits and receives dozens of resumes. Interviews are scheduled, backgrounds are checked, finalists are selected, and interviews, with multiple members of senior management, are planned.
It’s a process, as it should be. And it’s comprehensive. After all, the organization wants to make sure it is offering the job to the very best candidate.
When that same organization seeks to retain the services of a public relations agency – one with which the organization might spend $250,000, $500,000, perhaps $1 million or more per year – how, precisely, does it ensure that it’s retaining the very best agency partner? Does it undertake a process similar to that used when it hires full-time employees, such as that senior communications executive?
In the spring of 2019 CommunicationsMatch and RFP Associates partnered with Researchscape International to conduct a survey of chief communications officers and senior executives at Fortune 1000 corporations and large non-profit organizations, regarding their communications agency search and hiring practices.
Although companies worldwide spent an estimated $15 billion in 2018 on public relations agency services, according to industry publication The Holmes Report, and while public relations trade publications for many years have conducted surveys and produced lists that rate and rank agencies, limited attention has been paid to the agency hiring process.
Our goals for this research – which we believe is the first national survey of its kind – was to better understand how client organizations conduct agency searches, and to evaluate the relationship between the thoroughness of the agency hiring process and satisfaction with agencies and program outcomes. The results offer valuable insights and lessons for client organizations looking to retain agencies, as well as for agencies themselves competing for the attention, and ultimately the hiring decision, of potential clients. We welcome perspective, feedback and questions.
A 30-question online survey was developed by the authors of the study, with support from Tina McCorkindale at the Institute for Public Relations and Jennifer Swint at Porter Novelli (see acknowledgments).
The online survey was distributed through web links to a targeted list of chief communications officers or their equivalents at 800 publicly traded corporations, large private companies, and non-profit trade associations.
The survey was also promoted through online public relations media including The Holmes Report and CommPro.biz. The survey was conducted using Researchscape’s survey and results reporting technology.
The survey was launched on February 25, 2019 and was live for six weeks. No financial incentives were provided to respondents, but those who participated were promised an advance copy of the findings. There were 89 respondents, which Researchscape indicated constituted a response rate that is typical and reliable for a similar survey of C-level executives at large, well-known brands.
Preliminary findings were shared at the Institute for Public Relations 2019 Bridge Conference on April 11, 2019, in Washington, D.C.
Additional follow up interviews/discussions were conducted after the close of the survey with five communications executives who had responded to the survey and invited the authors to contact them for additional discussion.
The five represented industries including automotive, energy, transportation, medicine, and management and information consulting. We asked additional questions about their search process, how candidate agencies were identified, how agency proposals were reviewed, the amount of time invested in agency selection, and more. The perspective provided by these respondents was consistent with and a valuable supplement to the survey responses. The information gathered during the qualitative component of the research is woven into the Research Highlights/Key Findings section, within this report.
A key objective of this research was to determine the impact of the agency search process on PR or communications program outcomes reflected in satisfaction with hired agencies. We specifically wanted to provide communications and agency leaders research-based data to inform best practices for agency search.
The data reveals links between a thorough search process, client satisfaction and agency longevity.
Although the majority of communications leaders at the large companies and organizations we surveyed rely on their experience and networks to find only two to five agency candidates in their searches, the importance of a comprehensive search process is not lost on them. Many acknowledged that identifying more candidates early on, and dedicating more time to the process overall, would be ideal.
Across the findings, a clear picture emerges of the value of a thorough search and hiring process to achieving desired outcomes and strong, long-lasting agency relationships.
While client organizations are using RFPs, partnering with other departments, identifying what we would consider a minimum number of candidates in the search process, and are generally satisfied with the way in which searches are conducted, at a minimum, the research points to opportunities to improve processes and outcomes. It also highlights the significant gap between the approach taken when hiring employees and agencies, where the annual budget is often a multiple of that for an individual hire.
Following are key data points from the research – all of which are explained and analyzed in detail in the balance of this report:
The results provide insights into the agency hiring process and offer valuable takeaways for clients (the corporations and non-profit organizations which responded to the survey) as well as the agencies that compete for their business.
Multiple Agencies, Healthy Budgets the Norm
Half of the respondents said they rely on three or more agencies to support their communications efforts. A quarter of respondents indicated they are investing more than $1 million with the agency where they have the most significant relationship.
Most respondents indicated they were investing substantial resources with their public relations firms, with 15% spending between $500,000 and $1 million annually, almost 20% between $250,000 and $500,000, and nearly 25% between $100,000 and $250,000 per year.
Respondents indicated a strong reliance on their primary agencies, which were paid more than $1 million. At the same time, they suggested they were “harder” on their primary agencies:
More than seven out of ten senior corporate or marketing communications leaders said they rely on their experience and industry knowledge, and nearly two-thirds on “word of mouth,” to find agency candidates at the beginning of a search. The research showed the reliance on experience and word-of-mouth far outweighs the use of other potential resources to identify agencies, including drawing upon industry association resources or using agency search professionals.
But they tend to identify a limited number of agency candidates. Two-thirds (64%) of senior communications executives said they begin public relations agency searches with between just two and five initial candidate agencies.
Respondents suggested that specialized, boutique firms are highly valued and shared their perspective on how they identify agencies:
The survey shows a high level of overall satisfaction with agencies, but that is not the end of the story. When we asked about satisfaction with specific aspects of agency relationships important to client companies, we consistently saw around 40% of respondents only moderately or slightly satisfied with agencies’ performance.
Satisfaction with agency proactivity, account coordination, quality, staff turnover, meeting objectives, meeting budget and deadlines were all issues of concern for communications executives. Seven in ten respondents were moderately or less satisfied with agency proactivity and 44% with agency’s meeting objectives.
A notable finding from the research is that satisfaction with larger agencies with budgets in excess of $1 million tended to be lower overall than with agencies where the budget was between $500,000 and $1 million.
Where agency budgets are less than $500,000, the research shows the highest level of satisfaction in the $250,000 to $500,000 range.
The data show a correlation between agency satisfaction and the length of relationships. Perhaps not surprisingly, where agency relationships were four years or longer, clients tended to be highly satisfied. It should give pause that only 30% of primary agency relationships were reported to be four years or longer in length. The 70% of relationships reported to be three years old or less underscore both the high level of agency turnover in the industry and demand for agencies with new skillsets.
Satisfaction is clearly tied to delivering promised results, effective engagement with clients, and managing against budgets. As the following chart illustrates, satisfaction is correlated with longevity. The highest number of clients who reported being very satisfied were those where relationships were four years or longer. Far lower numbers of those with longer relationships were only moderately satisfied with agencies. Lower levels of satisfaction (not satisfied or slight satisfaction) were more often associated with shorter term relationships. The chart reveals half of those hired within a year were slightly satisfied and the other half very satisfied. This underscores the idea – reinforced by other data in the study - that the hiring process as currently practiced is a bit of a lottery.
When respondents were asked to rate their satisfaction with the agency search process they gave themselves high ratings – three-quarters were very or completely satisfied.
But, as with overall satisfaction, when respondents were asked to evaluate specific components of the search process, many acknowledged that neither the time allocated for the search nor the number of agencies identified in the selection process were sufficient.
Significant numbers of respondents reported shortcomings on the part of agencies in their responses to RFPs, noting that agency proposals and presentations are often seen as boilerplate, agencies seem to be “upselling” during the process, and agencies fall short on their response to the scope of work and program goals, budgets, and staffing requirements.
Interviewees identified agencies in a variety of ways. Typically this included relying on their staff and their professional peers outside their organization for recommendations:
A point worth noting, because it stood out strongly across a range of questions, was the significant difference in responses when we looked at the data by department name, e.g. “corporate communications/public relations” (and related names) versus “marketing and communications” departments. There were also clear differences between those who had worked for PR agencies versus those who had not. Leaders of “marketing and communications” departments reported being less satisfied with their agencies, and tend to change agencies more frequently, than their corporate communications counterparts.
In terms of satisfaction with the agency search and selection process, communications executives with prior public relations agency experience consistently indicated lower satisfaction than their peers without agency backgrounds on such measures as available resources to identify agency candidates, the number of agency candidates identified, the method to shortlist candidates, and the qualifications of shortlisted agency candidates.
The research indicated that the more thorough the search process and the more a communications executive employs what can be considered agency search “best practices,” the greater likelihood of satisfaction with the agency selected.
Significant majorities of communications executives indicated they were “very satisfied” or “completely satisfied” with the selected agency when they held a bidders call/meeting with all candidates, conducted in-person interviews with agency candidates, and utilized a formal RFP process. That two-thirds of those surveyed used an RFP as part of the hiring process, underscores its value and efficiency as a tool to evaluate and shortlist agencies. And while it’s assumed that agencies would rather win business without an RFP, it is clearly seen as important by respondents.
In our conversations with agency leaders we consistently heard that many of the RFPs they receive are poorly structured or often don’t include key information agencies need to determine whether they are a good fit for an assignment or to fully understand what’s expected of them. The research bears this out. While goals and objectives and a scope of work was incorporated by 8 out of 10 respondents, only a little more than half of companies provided budget information or selection criteria.
IIn terms of agency responses to RFPs, many communications executives were most critical of perceived “boilerplate responses” as well as the feeling that agencies were “selling up” during the RFP process.
In this research we set out to show the impact of the agency search and hiring process on satisfaction with public relations agency performance and public relations programs and outcomes. From the research, a number of takeaways highlight the importance and wisdom of a thorough search process:
• Two-thirds of companies responding to the survey used an RFP process to select agencies
• When an RFP was used agencies were more likely to meet or exceed initial client expectations
• Although satisfied with their search process, many respondents noted that having more candidates and taking more time for an agency search was ideal
• Where procurement was involved in agency search, satisfaction with the selected agency was higher
• Higher satisfaction correlates with agency longevity
• The research also highlights gaps between the “ideal” search process and how searches are actually being conducted
• Communications executives surveyed overwhelmingly rely on industry knowledge, experience, and word-of-mouth to select agency candidates
• Executives typically identified only two to five candidates at the outset of an agency search
• RFPs issued by organizations do not consistently include all the information required by agencies to respond most effectively
• Respondents indicated a limited use of search consultants/tools in contrast to employee recruiting
The results also demonstrate why this matters:
The research data reinforces our experience, as former heads of communications, agency executives and now agency search consultants, that a thorough search process is likely to lead to better outcomes – namely, the retention of a better-suited agency which exceeds a client’s expectations. At the same time, the data underline the cost of getting the process wrong or giving it short shrift.
The results of this research should encourage communications leaders to follow their instincts to dedicate more time and implement a more comprehensive search process. Where time and capacity are an issue, the tools and resources we offer help companies conduct a thorough, objective search for qualified agencies, request capability information from those agencies, issue RFPs with the information agencies need, and manage the agency evaluation, selection, engagement and onboarding process.
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