Inside PR 377: Companies squeeze suppliers and Facebook’s hold on us

On the most recent episode of the Inside PR podcast, Gini DietrichMartin Waxman and I talk about two very different topics: the squeeze large clients are putting on their marketing partners and Facebook’s hold on young users.

The Big Squeeze

Gini kicks off the discussion about the growing number of large companies that are taking longer to pay their marketing partners. In the case of some companies, such as P&G and Mars, advertising agencies, marketing and PR partners will find themselves waiting up to 120 days – four months – for payment. And that can be crippling to a creative business. Gini has some thoughts about how PR agencies can avoid being caught in the slow payment trap. In the short term, it may come down to this: If you don’t want to play the big client game, extending your credit to people whose credit rating is is probably much better than yours, you may just have to say no. And if they won’t attempt to find a workable middle ground, you may just end up saying no to working for them.

Martin believes that this would be bad for creative agencies and for marketing itself. It used to be that creatives would be constantly breaking off of the larger agencies they worked for in order to form new ventures. And with a fresh creative perspective, many of them would land a large account that would enable them to build an agency in their own vision. Heck, that’s how Terry Fallis and I started Thornley Fallis. A couple of guys with a fresh perspective on the business working on folding banquet tables in borrowed space. But we landed B.C.E. (Bell Canada Enterprises), then GlaxoSmithKline, and then Molson. And from there, the business took off.

Is that still possible in this current environment? Martin asks, “How can you compete to win clients like this if the financial terms would put you out of business before you have a chance to grow?” Yes it is possible, but ever more difficult. In order to succeed, small agencies need to keep a focus on what has always been the most important factor. Creativity. If we can do something that’s truly remarkable and memorable, we still can thrive.

Facebook’s Hold on Youth

Recently, some have suggested that Facebook is past its prime with teens. A  study from Forrester Research indicates that Facebook still remains young people’s favorite social network. Martin agrees that Facebook may still be used by teens. But he suggests that we look at an intangible factor that may point to the future. Do teens still consider it cool? Or are they there because they have to be because their friends are there? If that’s the case, Gini suggests that teens will not remain reliant on Facebook. Older people who have left school, moved away from their hometown, and are in mid-career, rely on Facebook to keep them connected with the people that they knew at an earlier time. Teens, however, are surrounded by their social network. They don’t need Facebook to stay in touch with friends. They know who their friends are and they can easily use different media, including texting, to stay in touch with their friends.

I think there’s a different between these two questions, “Do people use it?” and “Do people feel cool when they use it?” The first question finds its answer in past behaviour. The second question points the way to future behaviour. And if that’s the case, don’t count on Facebook keeping its stranglehold on youth. For now, young users are still on Facebook. But where will they be next year?

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I wrote this post to appear first on the Inside PR Podcast blog. I’m posting it here in case you missed it there and might be interested in it.