Public Relations: Should your company bring it in-house?

As we move into 2011 budget planning, decision-makers are asking themselves how to create more bang for their buck. Are they being 'penny-wise and pound-foolish' or is this the path to success?
Written by Jennifer Leggio, Contributor

As we move closer to 2011 budget planning, marketing decision-makers are asking themselves how to create more bang for their buck. Even if a company is not slashing its spending it certainly is trying to determine how it can get more results for its investment. And, in the specific case of public relations, this has created an ongoing question of "should I take my PR in-house?"

The numbers are indicating that this trend is indeed happening. In its most recent agency report, AdAge showed that overall the domestic agency market -- which includes public relations as well as advertising, marketing services, media, and health care -- dropped 7.5% to $28.4 billion in 2009.

The question of in-house PR versus hiring an agency is a much trickier question today than it ever used to be. PR as a function has changed and PR agencies should no longer be simply operating as strict media relations / press release development / "insert tactic here" outlets. There's a bit of a crossover now between traditional public relations agencies and digital agencies. The thing is, that in many companies the cross-functional collaboration required for today's progressive communications is easier to achieve by internal teams, versus agencies that might only work with one business unit. While many agencies are still able to do this well a slew of others are still focused on baseline media relations programs. This is another reason why it might make sense to expand internal teams versus expanding or growing an agency relationship.

Jaelithe Milich, marketing communications specialist at clothing company ExOfficio, said that her company brought its PR in-house not only for traditional elements but for better collaboration overall.

"We brought PR in-house because we wanted quicker and more efficient interaction with ExOfficio product development and customer service," she said. "This allows us to react to customer needs, communicate quickly and authentically and accomplish bigger objectives."

Milich said that the results of taking the program in-house were immediate.

"We’ve seen an 80 percent increase on impressions and reach a more qualified audience," she said.

Milich is not alone in her experience. Many companies made the decision to bring their PR, and even some marketing programs, in-house in 2008 when the brutality of the economy started to truly show itself. While economic factors were an initial consideration, the trend continues due to as many public relations agencies are struggling to move from their traditional roots into digital agencies. At the same time, the hiring of digital agencies that incorporate PR into their larger programs is increasing. There are still risks in agencies trying to be everything to everyone and, for that reason, more companies are choosing to work with internal resources.

"You must be inside our doors, in the thick of our culture, living and breathing our core values to communicate effectively," says Leslie Yeransian, creative writer and media coordinator, Rising Medical Solutions, a national medical cost containment and healthcare management company. "Our existing and prospective clients are on information overload; consistent messaging is key. The best way to achieve that is by keeping communication in-house."

Peter Shankman, founder of Help A Reporter Out and PR veteran, believes that internal PR can be very effective, that is, if the company has the right resources.

"As long as the companies have some idea what they're doing, yes -- it can be helpful to them," Shankman said. "Fact is, no matter how good the PR firm is, no one's ever going to capture your passion the way the actual company will."

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Bear in mind that the larger a company gets, the harder it is to bring communications fully in-house. Larger companies generally have multiple agencies or multiple arms of agencies (think Edelman and Edelman Digital) for its different initiatives, and while that can create some communications challenges, it's usually smarter and more effective than having an exceptionally large internal PR resource.

"It's harder for larger companies. The larger the soup, the more cooks; the more cooks, the more voices; the more voices, the more of a chance for two people in the same company to say competing things and shatter the voice," Shankman said.

For small- to medium-businesses, however, bringing PR in-house could be a real opportunity.

"On average, we get about twice the number of media mentions as we did with a public relations firm," said Naomi Whittel, founder and CEO of Reserveage Organics. "They work with many clients and often do not have the ability to invest in researching the best public relations opportunities. I have worked with two public relations firms and feel our in-house department is achieving great things."

There are still many companies that prefer to hire agencies. While saving budget is a benefit, David Prova, owner of design firm Prova, says that his biggest motivator in deciding to hire an agency was freeing up more time to work on the tasks he knows best.

"If I was a networking and social genius, then I would have no need to hire a PR firm," Prova said. "However, the day to day operations would probably be my weakness and I'd need to hire an ops manager or struggle doing it myself. I'm able to see the cost savings (and ROI increase) of hiring a PR firm over spending the required number of hours to manage my own PR."

Prova says that hiring a PR agency has resulted in much more publicity than he believes he could've attracted himself -- and it was accomplished in a short amount of time.

What do journalists want? This is where the people matter more than the method. While in-house communicators have an easier job of learning their company's stories, agency folks, due to their extensive client bases, often have a better scope of the media landscape.

"Ultimately, the best PR people are the ones who (1) know their products cold, and (2) know enough about my publication to have a good sense of what I might find interesting," said Harry McCracken, founder of Technologizer and TIME.com columnist. "Over the years, I've found that there doesn't seem to be any clear pattern about whether those folks are internal or external."

In the end, Shankman advises that companies not be "penny-wise and pound-foolish." Saving money on an agency or investing that same amount into internal staff is a viable option for many companies, but to ensure success make sure that the right type of internal resources are in place.

Do you prefer using a PR agency or relying solely on an internal communications team? Let us know in the TalkBacks.

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