PR News
April 23, 2001
Are Indies Virtually Recession-Proof?
Imagine having a team of hands-on, seasoned
professionals on your account - none with fewer than
seven years' experience - and being billed at junior level
rates. This is the sales proposition Aimee Quemuel
floats to prospective clients of Ventaja Communications,
the virtual agency she founded three years ago in San
Francisco.
Ventaja sports the Web site and collateral of your
standard high-tech agency, but actually represents a
network of independent subcontractors, all of whom are
brick-and-mortar agency veterans. Because the firm has
no physical office space, nor full-time employees, there's
little overhead expense to pass on to clients.
"We are all consultants. There's no junior staff on our
accounts, which has traditionally been a big issue for
clients," says Quemuel, who previously worked at
Cunningham Communications. "Thus, there's no 'bait and
switch' situation where you have the power team that
comes in to pitch your business and then you find out
later that your actual account team looks different."
[Read: fresh outta college.]
The virtual consultant model has been especially tasty
for tech companies that were either brushed off by the
big PR firms before the stock market meltdown, or
relegated to the bottom rung on the totem pole of their
agency's priorities. Both Accrue Software and
AuctionWatch - players in the e-commerce space -
abandoned traditional agency searches last year after
hearing about Ventaja through the grapevine.
"One of the best aspects of working with a virtual agency
is flexibility," says Millie Lee, director of PR at
AuctionWatch. "Our needs may be greater one month and
then not so big the next. They can ramp up and down
with us." Yet, the account team remains consistent
because the virtual network is impervious to the attrition,
promotions and layoffs that typically plague big agency
account configurations.
Quemuel wagers that hers is a recession-proof model.
Whereas traditional agencies often lose business in bear
markets when clients can no longer afford their minimum
retainer fees, the virtual structure is more organic. For
the client, this might mean not having to move business to
a smaller shop or revisiting the orientation process every
time budgets are cut.
Hybrids Among Us
Independent consultants, or "indies," have always been
an integral part of the PR ecosystem but changes in
technology and our societal fabric (i.e., how we define
work and workplace) have prompted the traditional
freelance model to swiftly evolve into hybrid PR
practitioners.
Kate Perrin, president of PRofessional Solutions, a
DC-based temp firm specializing in PR talent, estimates
that 60% of the "associates" in her database are
independent by choice (i.e., not seeking permanent
employment). "We also have a number of independents
who have worked with us [to find project work] but then
become clients when they get busy and need to hire
subcontractors," she says. "We're now seeing a lot less
dependency on traditional employment models, giving
way to more flexible work groups."
Sole proprietors who once subsisted on piecemeal
projects and agency cast-off work are now banding
together (whether formally or informally) to win
sizeable chunks of business. Katherine Hutt, president of
Nautilus Communications in Vienna, Va., recently
wrapped up a two-year $250,000 federal agency
contract to create a series of planning materials for a
national drunk-driving prevention campaign. In this case,
Hutt served as copywriter and project manager but
pulled together a virtual team of three other contractors
to handle design. Now she's one of several
subcontractors collaborating on an 18-month project for
the Navy League of the U.S., a contract worth nearly
$250,000. (DC-area maestro Lisa Fox, who specializes
in hand picking marketing communications and
advertising teams, is orchestrating the project.)
Nautilus's Hutt, who's got 20 years of experience under
her belt, estimates that her billable rate is about half of
what you'd pay for the same talent at a large PR firm.
"Most of my clients can't afford the $20,000 monthly
retainer required by big firms like H&K," she says. "And
even the smaller agencies cap at $7,500 per month."
Following the norm, Hutt has established her own
retainer and fee requirements, though they're much lower
than those commonly found in the industry. If there's a
niche between one-person shops and boutique agencies,
she's filling the void.
Sizing Up
Virtual PR agencies come with their own set of
limitations. Most tend to focus heavily on media
relations and executive communications programs with a
distinct de-emphasis on internal communications and
crisis management. And virtual networks can only scale
up so much, meaning they usually don't make good fits
for Fortune 500-sized clients with global- scale needs.
On the other hand, virtual networks are proving they can
handle bigger pieces of the communications pie than
some might expect. Lisa Fox, the aforementioned
ringleader on Hutt's Navy League project, last year
garnered $1.2 million worth of business from Whitten
Laser Eye Associates, the DC-based vision correction
specialists who've fixed the eyes of Tiger Woods, Gus
Frerotte and other celebrity athletes. For Whitten, Fox
amassed a virtual team to cook up an integrated program
that included marketing, advertising, PR and event
planning.
In Atlanta, Claudia D'Avanzo, founder of a virtual firm
called Creative Communications Consulting, beat out
two New York shops last year to become the PR agency
of record for a major candy company. Her first order of
business was a major launch event and a national media
relations push to food editors, including a radio news
release, satellite media tour and press kit mailing. "We
had six months to pull it off and I think our nimbleness
and size helped. We were able to turn on a dime," says
D'Avanzo who worked in Fleishman- Hillard's Atlanta
office for seven years before she launched her own
business.
Although D'Avanzo's model is undoubtedly giving
brick-and-mortar agencies a run for their money on some
level, she doesn't see her role as adversarial. "I don't
really compete with those guys," she says "We're really
two different things. Sometimes a client's budget just
doesn't match up to what the agency needs to be able to
fully serve that client. We offer, on a micro level, the
same level of services, high caliber work and a great
team." She adds, "I want to do great work and take pride
in my clients, but I'm not out to grow and grow and grow.
That's not necessarily everyone's game."
Hey, if the IPOs, big agency roll-ups and subsequent
shakeouts of late have taught us anything, it's certainly
that bigger isn't always better. The biggest gains to be
found in the communications business in 2001 may well
be at the grassroots level.
(Aimee Quemuel, Ventaja Communications,
415/751-5014, http://www.ventajacom.com; Millie Lee,
AuctionWatch, 650/808-5814; Claudia D'Avanzo,
Creative Communications Consulting, 404/898-0423,
http://www.creativecomminc.com; Kate Perrin,
PRofessional Solutions, 202/333-5636,
http://www.prstaffing.com; Katherine Hutt, Nautilus
Communications, 703/938-4540,
http://www.nautiluscommunications.com; Lisa Fox,
703/464-0655)
Finders Keepers
The home office/small office universe is expected to
swell to more than 51 million by next year, according to
IDC Research and WorkingSolo. com. The most common
home-based businesses include marketing, advertising,
business consulting, graphics/visual arts, PR and
writing.
Industry associations are recognizing this growth and are
beginning to provide more formal programming for
independents, according to Paige McMahon, an
independent consultant in Bethesda, Md. who is
championing the effort at PRSA's national level.
The big question for clients: How and where do you find
these virtual denizens? Most virtual networks tend to gel
and prosper through word-of-mouth referrals and
pre-existing relationships - and hence aren't readily
searchable via directories or Web portals. Ironically,
there's still a lot to be said for "who you know."
Millie Lee, PR director for AuctionWatch in San Bruno,
Calif. (who works with the virtual network Ventaja) says
the best resources for finding "indies" are likely to be
people on your regular gab list: fellow members of
professional associations, vendors, colleagues,
executive recruiters and temp agency heads.
(Paige McMahon, McMahon Communications,
301/320-8053; Millie Lee, AuctionWatch,
650/808-5814)
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