Researchers say virtual PR agencies “revolutionizing” the industry

Posted by Dan Keeney
 

 

 Finney  Close

It is not exactly light reading, but I spent some time looking through

Electronic Commerce: Concepts, Methodologies, Tools and Applications, which was published earlier this year. It examines the rise of the virtual agency model — not only in public relations but in advertising as well. It is one of the only scholarly appraisals of virtual agencies that I have been able to source.

The chapter, “The Virtual Agency as a New Force in the Promotions Industry,” was written by R. Zachary Finney of the University of South Alabama and Angeline Grace Close of the University of Georgia, North Georgia College and State University, and University of Nevada, Las Vegas (she must be busy).

Here is a brief excerpt:

“Virtual agencies use the Internet as a means to redistribute the tasks traditionally performed at a single firm. The completed work that the agencies perform for their clients is often similar to the work produced by traditional agencies. Virtual agencies, however, typically perform such work for a fraction of the traditional full-service agency’s price.”

Finney and Close go on to declare that virtual agencies are revolutionizing the industry by using the Internet to collaborate. They say, “the traditional agencies face a stiff challenge from their smaller, cheaper rivals.”

The analysis concludes by saying time will tell if the virtual agency model will be able to compete on a level playing field with more established traditional agencies, particularly for larger clients.

“It will be interesting indeed to observe whether management at the top virtual agencies will be able to establish brand equity equivalent to that enjoyed by the top traditional agencies.”

They predict that building that level of brand equity will take considerable time.

What I find most interesting is that Finney and Close look beyond the next few years and predict that as the benefits of virtual agencies become more clear, more virtual agencies will emerge, which will diminish cost advantages (if the main competitors are all virtual, nobody will be able to point to the 15% to 40% savings that today’s virtual agencies can deliver).

The bottom line? The successful virtual agency will need to stay on the leading edge of technology to gain further cost efficiencies over their virtual peers. While Finney and Close did not say so, it also seems obvious that traditional agencies will adapt to the new environment by embracing virtualization of their teams.

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This entry was posted on Wednesday, November 19th, 2008 at 11:48 pm and is filed under Future of PR. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Response to “Researchers say virtual PR agencies “revolutionizing” the industry”

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