Decline of the agency of record: 3 implications

A recent study notes a steep decline in the number of companies that retain PR agencies of record. But it’s not as scary as it sounds, says the author.

Ragan Insider Premium Content
Ragan Insider Content

But there’s evidence that the agency of record (AOR) may be heading the way of the traditional media tour. Gone.

According to the latest study conducted by the USC Annenberg Strategic Communication and Public Relations Center, clients are spending more on PR. Good news! But only 15 percent of the more than 600 senior communicators surveyed say they have an agency of record; by contract, a decade ago more than half reported an AOR relationship.

Bad news? Perhaps. But why the shift? The report attributes it to the need for more specialized and more regional expertise. That’s undoubtedly true, but I’d also factor in the economy. Even if you’re spending more on PR projects, cost allocation and management is simpler when you have the flexibility of shorter contracts.

Most importantly, it’s easier to calculate the return on investment based on a discrete assignment.

And ROI, or more precisely, impact, is where PR is going. Thanks to the rise of social media, the industry’s maturation, and the sophistication of measurement tools, we can quantify the results from a given campaign with increasing precision.

In fact, the Annenberg study showed that PR spending is up largely due to greater investment in evaluation.

To read the full story, log in.
Become a Ragan Insider member to read this article and all other archived content.
Sign up today

Already a member? Log in here.
Learn more about Ragan Insider.