New York, NY – July 30, 2024 – The PR Council (PRC) released findings from its recent survey of procurement executives, highlighting key insights into their interactions with PR firms. The survey, which included responses from over 100 senior procurement executives across various industries, underscores the need for increased education and communication between PR firms, their clients and procurement departments with a particular emphasis on transitioning to value-based pricing models.
Key Findings
Familiarity with PR Agency Capabilities: Eighty percent of procurement executives indicated that they are somewhat to very familiar with PR functions, but when asked which specific services they believe are offered are by firms, responses indicated some confusion. Most notably, earned media was selected by 46% of the respondents, trailing creative campaigns, social media, digital marketing and content creation.
Role of PR Firms in the Marketing Mix: Despite an up-to-date view of PR firm’s integrated offerings, many procurement executives continue to hold the outdated view of the role of PR firms to be supporting an advertising campaign (39%), but many have evolved to consider PR firms in the lead strategic or creative roles (12% and 15% respectively).
Success Metrics for Procurement Executives: Contrary to popular belief, value delivery was identified as the most important success criteria (53% of the respondents ranked this as their first and second priority). Cost-savings (41%), long-term vendor/partner relationships (33%) and PR/marketing team satisfaction (29%) followed.
Preferred Remuneration Models: Project-based fees are viewed by 53% of the respondents as the most mutually beneficial remuneration model, followed value pricing at 50%. When it comes to agency selection, value is the number one consideration (45%) followed by agency’s strategic and creative recommendations for the brand (44%) and total cost/rates at 43%. Also ranking highly were agency reputation and team relevant experience (38% and 34% respectively).
Challenges in the Relationship: Procurement executives note several issues, all tied to improved communications: 18% of respondents expressed that they face challenges in aligning performance benchmarks; 15% cited difficulty measuring ROI and 14% said tracking or managing progress.
“We can all agree that openness to new remuneration models is good news all around, and communications issues should be easy fixes, but clients, procurement and agencies need to find ways to get on the same page,” Kim Sample, PRC president said. “All too often, either clients or their procurement partners aren’t aligned so agencies are stuck in the middle.”
Takeaways for PR Agencies
Education and Communication: Agencies should prioritize educating procurement teams about the full range of services they offer and the strategic value of PR. Routine updates can help bridge gaps in understanding and foster stronger partnerships.
Focus on Value: Transitioning to value-based pricing models can align agency incentives with client outcomes, ensuring that compensation reflects the tangible results delivered. Agencies need to specify the outcomes a program will achieve and set regular benchmarks so the client and procurement teams can easily track progress.
Takeaways for Procurement Executives
Clear Objectives: Clear, measurable objectives should be established from the outset of PR engagements. This enables more accurate performance tracking and ROI measurement. Procurement can play an important role in avoiding mission or scope creep, troubleshooting for agency and client partners when these challenges occur.
Open Negotiations: Procurement executives should negotiate with a willingness to pay for the team that can deliver on goals. Understanding the costs associated with different services will lead to more mutually beneficial negotiations.
Sample said, “Recognizing the increasingly important role that procurement, sourcing and agency management teams play in our members’ client relationships, the PRC is eager to facilitate best practices that create win-wins for all.” Based on these survey findings, the PRC is planning several actions, including facilitating conversations with procurement executives, to regularly publishing white papers that clearly establish terminology, measurement protocols and more.
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About the PR Council
The PR Council is the only North American association dedicated to supporting agencies with a core competency in earned media. Through a combination of convening and advising, the PR Council aims to help Members—the leaders of 150 premier global, mid-size, regional and specialty firms—work smarter to build more valuable agencies. The organization is focused on the most critical issues affecting PR agency leaders’ ability to attract and retain talent and grow client relationships and their firms.
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