Why Are PR Agencies Working on Spec?

A member of a marketing organization I belong to (MENG, or Marketing Executives Networking Group) emailed the group for comments about marketing agencies working “on spec” as part of the proposal process for potential clients.  He received a lot of responses, some quite heated, mostly from ad agency and design firm executives, although a couple of marketing consultants also weighed in. Almost everyone who replied disapproved of working on spec.  Many respondents flatly stated that their agencies would never work on spec, no way, no how.

If you’re in a corporate position and don’t know exactly what I’m referring to, I’ll give you an example of the PR industry working on spec: company X decides to look for a new PR firm.  After initial research, the company chooses PR agencies to invite to  compete for the business. They provide each agency with background information about the company’s communications challenges.  They instruct the bidders to propose ideas and strategies for solving the problems, including timetables and budgets for carrying out the recommendations.  

Ever since I entered the PR industry I’ve heard agencies complain about being forced to work on spec, because it amounts to providing free consulting services to potential clients in hopes that the client will eventually hire them.

Like law firms and accounting firms, PR companies are professional services organizations that pay the rent and salaries by charging for employee’s time. One of the MENG comments was, “We can’t pay the rent on spec. Would you ask a lawyer to tell you how he was going to argue your case before you paid him anything? Would you ask a doctor to give you free treatment so you can see how it compares with 8 other doctors?”   (I hear a loud explosion from agency folks who are reading this and shouting, “Exactly!”)

Every agency I know has, at one time or another, had its intellectual property (that’s what proposal ideas are) stolen by a potential client.  In some cases, companies have gone through the agency search process, gathered great ideas from the agencies they’ve met, and then announced they weren’t hiring an agency after all. Instead, they cherry-picked ideas they liked and executed them in-house. I’ve also seen our own agency’s concepts given to another PR company to carry out.  (Maybe the other agency proposed a lower price, but wasn’t particularly creative, so the company decided to hire the cheaper agency and have them use our ideas. Who knows. In any case, this is unethical and infuriating!)

Those of you in corporations may be thinking, “How else can we choose an agency if we don’t see them in action, see how they think?” First, ask each agency to discuss case studies of work they’ve done for other clients. Second, speak to the agencies’ references. What their clients tell you can be revealing. Third, describe a hypothetical situation to all of the competing firms and ask them to provide their thinking about how to handle the fictitious situation. We do this when we test candidates for job openings on our staff. It does involve some unpaid time, but we expect that as part of the sales process, and at least the PR firms bidding for your work won’t feel they are developing a communications strategy for you without being paid.

Although I feel it’s unfair to expect agencies to develop communications programs on spec, in the PR industry my firm does it.  We don’t have a choice, since everyone else does it.  If we didn’t do it, our chances of being hired would be quite low. 

A website  was developed to try to gather people in the communications industry together to stop the practice of working on spec. That’s how strongly many agencies feel about it.

What’s your opinion?

Lucy Siegel

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13 Responses to “Why Are PR Agencies Working on Spec?”

  1. Anne-Marie Kovacs Says:

    Unfortunately, the PR and Marketing industry has done this to itself. We need to develop a whole new mindset and processes on both, the agency and client side to get out of this hole. But I predict that, with a collective effort, it can happen. With time!

    • Bridge Global Strategies Says:

      Anne-Marie: thanks for your comment. I agree to some extent that the industry has done this to itself, but clients have a big part in it, also. In particular, the formal agency reviews that first have RFIs, then RFPs, and then presentations, and sometimes call-backs after the presentations. At each point of contact after the RFI, the client wants more info, and the agencies, willing to do just about anything short of murder to get new business, do whatever is asked of them.

  2. Richard Sellers Says:

    Great build on the MENG replies. We all know it’s easy to argue against this practice but difficult not to get caught on this dangerous slope.

    • Bridge Global Strategies Says:

      Richard, the only thing we can do (in PR, anyway – may not work for all types of communications services) is give a little away, but not enough that the client could do the work without you. But that’s not always easy.

  3. Rick Sebok Says:

    Agreed, both clients and agencies are guilty here. I suppose that if a client wants spec work (for free), the agency should feel entitled to get an equal value of free product that the spec work would be used for…interesting thought…humm…here’s how it goes. Ok Mr. Client, we’d happy to do some FREE spec work in exchange for some FREE product. Since this work will take our team 100 hours to complete (swag here) and our fee is $150 per hour, we’ll take $15,000 worth of the widgets we’ll be developing ideas for…seems like a fair trade, doesn’t it?

  4. Milton Pincus Says:

    Having work on both sides of the equation (agency and client), this problem can be summed up by saying clients lack imagination and agencies lack the guts to say “no”.

    • Bridge Global Strategies Says:

      Milton, it’s easy to sum up this way, but from the agency perspective, saying “no” is risky in hard times. It was different back in the dot com days when there were so many companies clamoring for PR help that agencies could afford to be picky about which clients they wanted. I remember being told at that time by a prospcective client that another agency had demanded a fee for just coming to meet them for a preliminary meeting! We are far, far from those days.

  5. Jeannette Paladino Says:

    Lucy — this is a problem that has existed since the beginning of time. In fact, I wrote an article many years ago about giving away your good ideas to prospects and interviewed several PR agency leaders for their thoughts. Buck Buchwald, a co-founder of Burson-Marsteller, told me at the time, “Jeannette, there isn’t a new idea under the sun. Everything is a derivative or new take on something that’s already been done.” You could quarrel about his reasoning, but he felt the argument was overblown. If a prospect “steals” your ideas, or even gives them to another agency to implement, we have new ways of “don’t get mad, get even.” It’s taking a risk, but you can always take to the electronic airwaves of Twitter, Facebook or your blog to discuss how you originated an idea that someone else is using. I like the idea of bartering — you get my ideas, I get your product. Wonder if anyone has actually ever done that.

    Another potential solution is to ask the client for payment of your time in putting together your proposal, if you are chosen as the agency. I do know that advertising agencies are often paid for their creative time in advance for developing a variety of spec campaigns.

  6. Bridge Global Strategies Says:

    Hi, Jeannette. Thanks for your comment. Yes, this is an age-old problem. And I agree that there’s no such thing as an original idea. But PR proposals are rarely just a few ideas, as you know. We think through the whole strategic communications process. I’m just saying…there’s something a little demeaning in being expected to do this at no cost. But getting mad doesn’t accomplish much, does it? Perhaps there’s a lot more satisfaction and closure in getting even!

  7. Nancy Fendler Says:

    Hi Lucy,

    Thank you for the great post! All great comments. We too have been victims of the RFI and RPF process rssulting in what has been discussed above. By participating, I am sure that we are adding fuel to the fire. It takes real courage, particularly in this competitive environment, to tell the prospetive client that while you would like to potentially work with them, you will not enter into this process. Blair Ens’, Win Without Pitching comes to mind. We have had the most success with prospective clients who have done their homework and ask a few agencies to submitt credentials, some examples of our work and how we would approach a situation.

  8. 5 Reasons We Won’t Respond to RFPs « BridgeBuzz Says:

    […] Why should communications companies be expected to give away their intellectual property? I wrote an entire blog post on this subject a couple of years ago. Some in-house marketing and communications executives claim […]

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