For agencies, in-house control is an illusion wort
Charting the future of public relations
Holmes Report

For agencies, in-house control is an illusion wort

Arun Sudhaman

Two recent stories highlight the concerns that arise when a PR firm takes over the in-house function of a client. The first comes from New Zealand, where Fonterra has been roundly criticised for its handling of a new food safety crisis. Specifically, the dairy collective is being asked some uncomfortable questions as to why it waited four months to report it had found traces of a chemical in its products. Fonterra is not only New Zealand's largest company, but an essential bellwether for the company's economy. So any threats to its reputation are taken very seriously indeed. In this case, the scenario is complicated by the presence of Baldwin Boyle Group (BBG), the New Zealand PR firm that, for many years, has essentially acted as Fonterra's in-house PR unit. That relationship was recently renewed for another five-year term, accompanied by the appointment of Louise Nicholson as Fonterra's head of communications. Nicholson was previously BBG's managing director, but has spent the past year 'embedded' within Fonterra. Confused yet? On the surface, the arrangement is undoubtedly attractive for BBG - the agency secures a much higher degree of oversight and can effectively make itself indispensable to the client. A similar, less obvious, scenario emerges from Malaysia, amid scrutiny of the country's "covert campaign" to influence US bloggers. APCO Worldwide made plenty of money from its lucrative Malaysian Government contract, a controversial assignment that saw the firm operate as the country's de facto communication department, supported by a large team of political and public affairs veterans. Unsurprisingly, the APCO arrangement did not last long, scuppered by political opposition. Both examples, though, demonstrate why agencies might be better off keeping their clients at arms length. Ultimately, they should be providing genuine counsel and asking tough questions, both of which are more likely to arise from a more independent, less compromised mindset. The benefits of a long-term, wholesale takeover are undoubtedly appealing, not least the  better grasp of the business that it affords, and the mitigation against client budget turbulence in a time of economic uncertainty. Yet the illusion of total control is probably one that should be resisted if agencies really want to fulfil their role as respected, senior advisors. For clients, meanwhile, perhaps the biggest risk comes from abdicating oversight of the communications function. Companies should probably speak for themselves, even if they are being advised by PR counsel. And it is hard to think of any way in which a company benefits from not building a strong, institutional, communications function.  
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