Opinion: Niche consultancies are disrupting the PR industry

Large agencies will have to get used to niche consultancies snapping up their clients, argues Jason Nisse, a former Newgate Communications partner and founder of The Nisse Consultancy.

Is the public relations agency dead? Clearly not, as hundreds of successful firms around the world make decent returns for their partners and owners. Yet there are also flaws in the structure that are allowing niche operators to disrupt the communications market.

Having worked for five years at a large agency owned by an American conglomerate, then having founded another agency which is now wholly owned by an AIM-listed company, I’ve seen the strengths and weaknesses of the model.

Clients are reassured by having strength in depth, there are economies of scale for services like media monitoring – and they should get access to expertise they might occasionally need, but don’t always use. However, this also brings frustration for clients who want high level advice and worry it comes with junior staff being trained up on their time.

Niche agencies are disrupting the status quo

PR agencies are like luxury hotels. All the services are there – but you also pay for things you may not always want, such as fluffy towelling robes, the steam room or the breakfast buffet.

In this way, niche consultancies are like Airbnb. You pay less for less, but it might just be all you want. I love Airbnb – you can find places with more personality than any hotel room, and I’ve stayed in some amazing homes in brilliant locations from Los Angeles to Venice. But a good friend of mine hates them, and will always book a hotel wherever he goes.

After 10 years offering hotel-style PR services, I’ve gone into the Airbnb business. My pitch is that is you need other services, I know other agencies and freelancers I can work with who provide this. These other niche agencies work on similar models. We charge less, and are more entrepreneurial and flexible than the larger agencies.

Some clients love this, some find it a little scary.

It’s time for big PR firms to eat their lunch

In the past, large agencies always had an advantage with large clients. If the reputation of a Brunswick or a Burson-Marsteller didn’t get them over the line, the procurement process definitely did. But these days, many corporations are refining their processes to favour smaller suppliers. This is a great opportunity for the little guys.

It may be that the PR model will follow the corporate finance market, where niche firms like Robey Warshaw regularly advise on the biggest deals, working alongside big banks like Goldman Sachs and Morgan Stanley.

This may take a change of mindset from larger agencies. But, it seems likely they will eventually have to decide whether they are willing to share opportunities rather than risk losing out to nimbler, less expensive rivals.

There are many PR agencies who’ve placed stories or articles about the modern gig economy for clients. Now, it’s time for them to eat their own lunch.

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