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June 7th, 2006

Can Someone Please Explain the Overbilling Issue to Us?

Maybe we’re a little slow, but we just don’t get the hue and cry over PR firms overbilling their clients.

We were on the corporate side for most of our career. We managed agencies on the tiniest projects and on half-million-dollar campaigns. We worked with Burson, Fleishman, and smaller agencies, too.

And you know what? When we got a bill from the agency, we reviewed it. Carefully.

We knew how long it should take to book a media tour. We knew how long it should take to draft a press release. If we thought the billing was off, we’d talk with the agency. If it became a problem, we’d go find a new agency.

Why is this so difficult? If you have an experienced person on the client side — which every company should have before hiring an agency – this is no-brainer stuff, isn’t it?

If you read Media Orchard regularly, you know that we don’t believe in free-market solutions to every problem. But if a client company can’t manage its own costs, and if overbilling PR firms aren’t penalized (and thus controlled) by clients that can easily turn to less expensive competitors — then we’ve got a problem that goes well beyond the PR industry. The entire theory that the market system is self-regulating — on any level — goes out the window.

So … explain to us why we’re wrong?

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