NY Times Pontificates on PR's Bad Press

This was an interesting article as it hits on what I believe to be dirty laundry in the PR industry. To understand the underlying current of why once great PR firms that were swallowed up by ad conglomerate have been beaten down and had all esteem and creativity sucked out of them, one needs to look at the structure of the deals when they sold.

In the PR industry, most deals are set up with a small downpayment, with a majority of the buyout out being in the "earn out" phase. Earn outs are typically structured over 3-7 year periods. Fact is many PR firms were being gobbled up in the late 90s and the terms of thier earn outs were based on pre-bubble burts revenue projections.

So owners dragged their employees through the acquisition then promised great riches for them if they stick it out through the earn out. I know this because I was once an owner of a firm that went through the acquisition process. The owners pocket the downpayment, then the exectuive gets the earn out scrapes.

Fact is, most of these agencies didn't get anything from their earn out deals. PR firms quickly went from darlings to dog house and were whipped on by the large ad conglomerate to meet minimum revenue or else.

The emotional effect on the industry is bubbling up know through some of the things O'Brien mentions in his article.

We must all thank B.L. Ochman for being a pioneer in online communications and championing our cause. I believe it will be the online communicators that will regain credibility for our industry.