One of the company building topics that’s surprisingly mystifying is PR — and only surprising since so much of the strategy and tactics behind public relations are actually hidden from public view. We’ve tried demystifying the topic in an ongoing series, covering everything from “the why, how, and when” of PR” and leaders building a personal brand to crisis communications.
But the most frequently asked question startup founders, especially technical ones, have is how to manage a PR agency — from when to bring one in and the mechanics of onboarding and engaging with them; to key acronyms to know in the process of doing so (what’s an AoR? RFP? GA?); to what are the ideal configurations for the who-what-where of in-house vs. agency PR.
So this episode of the a16z Podcast provides perspectives from both sides of the table (in-house vs. agency, big company vs. startup) for what it takes, featuring PR legends and veterans Shannon (Stubo) Brayton, chief marketing officer at LinkedIn (formerly at OpenTable and formerly vice president of corporate communications at eBay) and Margit Wennmachers, operating partner at Andreessen Horowitz who heads up the marketing function (and who co-founded and later sold The Outcast Agency), in conversation with Sonal Chokshi. It’s not dictation — whether from company to agency, or agency to reporter, or PR to internal stakeholders — there’s a lot of strategic thinking involved even with seemingly incidental things. And… it’s a leap of faith.
- Definition of PR and the advantages of working with a dedicated agency [1:37]
- Deciding when a business needs a PR agency [8:47] and various specialties [16:04]
- Common terminology [20:39] and further discussion of agency types [26:07]
- How to work with an agency [27:45] and how to choose the right one [31:45]
- Advice around PR during and after an IPO [34:36]
Sonal: Hi, everyone. Welcome to the “a16z Podcast.” I am Sonal. We talk about everything from tech trends to company building on this podcast, but one of the company building topics that’s surprisingly mystifying is PR, since so much of the strategy and tactics behind public relations are actually hidden from public view. So today, we cover the frequently asked question of how to manage a PR agency — from when to bring one in, and the mechanics of onboarding and engaging with them; to key acronyms to know in the process of doing so; to what are the ideal configurations for the who, what, and where of in-house versus agency PR.
Joining us to have this conversation, we have Margit Wennmachers, operating partner at Andreessen Horowitz, who oversees a16z’s marketing function — which includes brand and communications, among many other things. Before that, she co-founded and sold The OutCast Agency, which worked with some of the now biggest internet companies — then startups — and continues to work with leading tech companies today. And then we have Shannon Brayton, who is the chief marketing officer at LinkedIn. She has worked in-house in corporate communications at several prominent internet companies, including OpenTable — which later IPOed — and formerly served as vice president of corporate communications at eBay. Together, Shannon and Margit provide perspectives from both sides of the table — in-house versus agency, big company versus startup — for what it takes to manage PR.
By the way, you can find more background and other topics touched on in this episode, including PR 101, crisis communications, and building a personal brand, in our podcast series. You can look under the public relations tag. But this conversation begins by quickly recapping the “why” of PR. The first voice you’ll hear after mine is Shannon’s, followed by Margit’s.
What PR is and why it’s important
Sonal: So how do you guys actually answer the question of, do they even need an agency or not in the first place?
Shannon: Well, I always start with, “What are you trying to achieve?” So, if you are there because you are trying to get users, PR is not the only lever you should be pulling, obviously. But if you are trying to get funding, or you’re trying to get acquired, or you’re trying to get someone else’s attention, PR is a good lever to pull, but you don’t necessarily need an agency to do that. <Right.> So it all depends on the objective.
Margit: Yeah. And if it’s early stage, PR can be very helpful, because it makes everything else easier, right? So it makes hiring easier. It makes fundraising easier. It makes everything easier, but there’s almost never a direct correlation. I mean, it’s like, I did this interview in Fortune, and therefore, I got these customers. It’s just not how it works.
Sonal: So you’re saying it’s valuable, but there’s not necessarily a direct immediate…
Margit: It’s hard to measure…
Shannon: It’s a leap of faith.
Margit: …on a spreadsheet.
Shannon: It’s a leap of faith.
Margit: Yeah, exactly.
Shannon: I think the biggest tip I give people that ask me about this is, don’t expect to hire an agency and get results immediately, just, like, all of a sudden. You actually need to invest in the relationship both ways. The closer I’ve brought an agency, the better the results. The more I keep them at an arm’s length, the results just completely go downhill, and then the expectations and the relationship just starts to sour.
Sonal: But I have a question about this, because honestly, like, if I’m a founder and I’m busy trying to build a freaking company, for god’s sake — and in the beginning, you’re doing like 20 things at once, wearing 20 hats — I don’t have the time to manage an agency. Like, isn’t the point of outsourcing it to just not think about it?
Margit: An agency is ideally managed not by the founder, because as a CEO, you’ve lots of things to do, right? Like, you’re growing [the] company, you’re probably managing engineering still. Like, there’s just a lot of things to do. So ideally, you have someone with a lot of input from you who will help the agency be successful, and the other way around. And so, yes, you do weekly phone calls, and you share lists, and like, this, that, and the other, but it’s like, okay — building camaraderie and, sort of, the investment together. The agency can only tell the stories that they know, right? So if you are the founder that has that gene and understands, like, “Oh, this will be interesting to WIRED. That will be interesting to TechCrunch. This is not interesting at all.”
Sonal: Which almost nobody can do.
Margit: Like, that’s just — this is not a given that you have that skill. So, then, if you don’t, then you need to let that team in so that they can discover the stories and tell them for you. And then they do all of the story-finding, the fact-finding, the backup — like, who needs to tell the story, and all of that. And then they figure out how to map a particular idea to a particular person at a particular outlet who will be interested in that.
Shannon: And building the story is not, “Oh, hi, I’m gonna call you, and I’m gonna tell you the story, and then you’re gonna tell the reporter.” Bringing the person into your world and letting them help find it — experience your culture, get to know you a little bit better — that’s gonna make the story much richer.
Margit: Yeah, it’s not dictation. There has to be a story. There has to be some tension. Who is well suited to tell the story? What kind of proof point do you need, if any, right? So there was a dance.
Shannon: That’s, sort of, tip number one, right? Is, you have to be willing to invest in the relationship.
Sonal: …to invest that fund in the relationship. So there’s a real dance I’m hearing, but quite frankly, what I’m also hearing a little bit of — and just disillusion me of this — why would I even bother outsourcing this? Why not just hire someone in-house? Like, why do all this work if you’re saying it’s not dictation, you should be able to discover…
Margit: It’s totally legit. I mean, like, I don’t think Apple has really used PR agencies. There are models where you don’t have an agency at all. What we should do is dissect, like, how would you divide and conquer? Like, who is good at what? If you’re internal, you probably are — more of your time is often consumed with talking to the product managers and figuring out what the roadmap is, right, and doing all that. Finding the stories, making sure that everything moves forward, doing all those meetings, right? And you don’t have any of that when you’re on the agency side, right? Your time is taken up with talking to reporters all the time because you have multiple clients. And as a result, you know stories that are kind of outside of scope. And that’s interesting to a client. Whereas, like, you know, it’d be good for me to know if WIRED is doing a cover story on AI.
Sonal: So you’re saying, an agency, in that context — that person has the time to really keep their tabs on what the reporters are doing all the time, essentially.
Shannon: Two things I think when it works really, really well. So one is when you’ve got way more program dollars to spend, and you’d rather do that than bring on a headcount, which is much more of a fixed cost. So a CFO, actually, a conversation with the CFO is typically, “Oh, an agency sounds like a great model instead of hiring three people that may be very, very hard to manage, and then potentially have to exit at some point.” Number two, if you get the phone call, “Hey, we’re gonna launch in India, but we’re actually not gonna put an office there or a country manager, and we just need some arms and legs on the ground,” that works beautifully, to be able to find an agency in the network, and call up and say, “We really need your help with project A, and if it works out, we’d love to keep you on.”
Sonal: So that’s more like more specialty-type things.
Margit: Yeah. You can dial up and down. And so, particularly, you know, once you’re a really established, high-growth company, you wanna grow the team, you want all of that. But, like, when you’re not in that stage, an agency can be super, super effective.
Sonal: So I hear the thing on — that specialties may vary, and that some of the media relationships may vary. But are you also, guys, saying then that people should outsource their media relationships to their agency? Or do the in-house people also still invest? Like, how do you, sort of, divvy that bit up?
Shannon: I think it really depends on who’s got the relationship, and there should not be pride of ownership.
Shannon: If the agency has the better relationship — like in Margit’s case at OutCast, they probably had way better relationships with reporters than half their clients. The client has to be willing to say, “Margit, I’m fine with you calling Quentin Hardy. I don’t need to do that.” And not having that conflict of interest between the two, it should really be whoever’s got the best relationship.
Margit: And at the same time, I think it’s really important for internal folks to be talking to the press. Because you kinda lose touch. What is even a good story? What are they thinking? Like, what’s kind of in the water? And not knowing that at all is just really detrimental. However, do you need to be booking all of the appointments, or do you need to be working on every story? Probably not, right? So it’s a balance.
Shannon: And the internal team, too, gets a lot of G-2 on other companies by talking to reporters directly, too, if they build the relationships.
Sonal: What’s G-2? Sorry.
Shannon: Some information about other companies. What’s happening in the Valley, in the industry, just intel, in general. And so I think you don’t wanna ever have the agency team do all of it at the exclusion of the in-house team. They should have their own.
Sonal: It’s like you’re basically not outsourcing your insights and your connections, but you are trying to scale what you do, and leverage where you don’t have specialties, etc.
Shannon: Right. Without potentially fixed costs.
Margit: I remember being in situations where the reporter won’t tell the company directly, like, what’s up, but they’ll tell you.
Sonal: You’re the inconvenient messenger.
Shannon: Or like a conduit.
Margit: And then on the client side sometimes, sometimes it’s really nice to have an agency walk in and deliver a particular message, versus you do.
Sonal: I’ve actually heard the best definition of consulting, in general, is that they’re the people who will say what the internal people think all along but just don’t get across.
Shannon: This is why I love letting agencies do media training, too, because agencies can really tell a CEO, “Actually, you look like a complete dweeb,” or, “This message completely did not resonate,” where the employee sometimes has a harder time landing that message.
Overview of PR specialties
Sonal: So, we’ve been talking so far about common configurations for working with an agency — like, having it in-house and an agency. Let’s switch and talk about timing. When should you bring an agency in or not? Now, one assumption — maybe this is a good assumption, I’ve heard — is that a lot of times, in the very early days of a startup, at least — you don’t have any hires, you just need to launch an announcement out. Is that the time to bring an agency in, or should you be trying to hire?
Shannon: I think an agency, to come in at the very beginning and talk about the company’s narrative, and what are your value props, what are your market fit, and who are the people running this company — super, super valuable to have an agency help you do that, without having to hire someone at the outset.
Margit: I totally agree. One thing that I’ve learned in working with a lot of startups is that you need to, like, strip all the language that we are used to, because they can’t hear it. So, for example, a CEO will call and say, like, “We’re launching soon. We need to have an agency, you know. Like, can you arrange the launch?” And then, oftentimes, people say, like, “Well, first thing we need to do is we need a messaging positioning, blah, blah, blah,” and they just hear, like, “Blah, blah, blah, dollars, blah, blah, blah, dollars,” and none of it means anything to you. Try to work backwards from where the CEO is. Okay. So, when is the product ready? You know, it’s all different, whether it’s consumer enterprise, right, like, and work back from there and go, like, “Well, if you wanna have your launch date be that, that means you’d have to be on the road doing interviews then, and then before that.” Just kinda meet them where they are, and try to strip out all the technical lingo out of the thing, because that’s like engineer talk.
Sonal: It goes back to starting with what the goal is.
Shannon: Right. And one of the things I’ll ask people, too, at the outset is, what is your desired headline? Let’s think about your dream cover story. What does that say, and what is the headline? And then you get a really good view into what’s going on when you ask about the absolute dreaded headline, because you can actually glean what is potentially underneath that you’re not necessarily being told.
Sonal: Isn’t that a little bit dangerous also for them, though, in terms of mixed messages? Because a lot of funders, especially those who haven’t done communications and marketing before, they assume that, “Oh, I’m gonna say this. This is the truth. This is the message. There’s no variation from this.” It’s like logic, not story, which has multiple flavors of interpretation.
Margit: And so what you would do is, like, you basically are taking them on the journey with you, right? If they say, like, “I want the headline to be, like, we have the best search engine technology on the planet.” And you’re like, “Okay. Well, then, how — like, what would the reporter need to come to that conclusion, right? And so then you walk — again, you walk backwards with them where you have them go substantiate the story. And then, if you can’t, then you’re discovering that together, right?
Shannon: You don’t commit to the headline, but you basically say, “If this is the type of story you want, here’s all the stuff I’m gonna need to be true in order to help you go for that.”
Margit: And don’t trust an agency, ever, that will promise you a headline or a story or any kind of outcome.
Sonal: So how does the life cycle of a company look? And if you could set up an ideal model, is there an ideal model?
Margit: So, like, an example — you’re basically an established person with an established career in Silicon Valley, and all you wanna do is, you know, put out something that you’re working on something, so you get an inflow of, like, talent and, you know, investors knocking on the door, and whatnot. And you just wanna be very efficient about it. You probably have a relationship with a reporter, and you pick up the phone, he’ll assign it to someone. You do this one story and off you go. And then you go back into stealth, and you’re done. Like, you don’t really need an agency.
Sonal: Then what would the next inflection point be to bring in an agency again, or to have one on a regular basis?
Shannon: I’d say a huge influx of media inquiries coming to you, because then you realize, “Actually, this is getting out there, and we’re not controlling the story.” So I think if you’re getting, you know, 5 to 10 a month, you’re probably at a point where you may need an agency to help you manage through that.
Sonal: So when you get a lot of media inquiries, other inflection points.
Margit: There are companies that, like, really don’t have any profile, and they’re thinking of going public. I would say, you have left money on the table if you find yourself in that position. Because there’s not that much you can do. Like, once you meet with bankers, you’re on a quiet period, so you can’t really be doing anything, right? So, if you are a company where there’s product-market fit, the company is growing, things are going well, you’re thinking of — if it’s an enterprise software company, another office somewhere — you have a management team, right, and you’re thinking like, “You know what, we should get the CFO in the door, because in the next two years, we wanna be in a position that, if the market is good, we might file.” You definitely need to get a PR firm in yesterday, because you only have a very short window in which you can do anything at all before you go quiet again.
Sonal: That’s actually rather counterintuitive, because I would think that you would want PR when things aren’t going very well, but it sounds like you’re saying, actually, when you have traction but a low profile, right.
Margit: You want a different kind of PR.
Shannon: That’s right. And that’s the next inflection point I was gonna say, which is — it’s more incidental than inflection point, but a crisis —I would not leave it to a founder or a management team to manage a crisis on their own if they don’t have deep PR expertise.
Margit: You’re not allowed to do this alone.
Sonal: And frankly, even if you did, I was about to say, I’ve seen these guys in action. Like, there’s a diagnostic thing that only a crisis person can come in and do.
Margit: You want professional help.
Shannon: The best example, the trivia one — they desperately needed some PR help way earlier than they probably actually got it.
Sonal: Oh, right. This is — you’re referencing the story where the founder emailed the PR folks and said, “Don’t quote this guy. I have this article.” And that person who was working for them kinda went rogue and did their own thing. I remember that.
Shannon: Correct. And they were all over social media, and the whole story was just going in a million different directions.
Margit: Nobody was in charge over there.
Shannon: Boy, they sure could have brought in some help. One other thing, too — I think there are certain people I’ve worked with who think, “Oh, I don’t need to tell her about that thing.” It’s like some skeleton that I inevitably end up finding out about. And so I wish I knew upfront, because I would potentially do things differently. In year one, if I knew that in year two it was gonna come out, you had a DUI or something.
Margit: The thing is that, you know, I think lawyers — I’ve never been in this situation, knock on wood, but I think lawyers tell you, like, “I don’t wanna know if you did the thing or whatever.”
Shannon: Right. PR people do.
Margit: I wanna know.
Sonal: It’s the exact opposite, that’s right.
Margit: Because I cannot help you if you’re lying to me, and I cannot steer the ship story-wise if I don’t know what to stay away from.
Sonal: No information is privileged for a PR person.
Shannon: That’s right. And by the way, with my DUI example, it’s totally hypothetical, but I would not put a founder into a car for a photoshoot if I knew he had a DUI.
Margit: That’s a great way…
Shannon: Because I know that picture is gonna be amazing for reporters to use in a year. So I need to know that.
Margit: But that’s a very different muscle, right? So there’s the kind of PR that helps you build, right? And then there’s the kind of PR that helps you protect and, you know, figure out the most elegant way to be in a crouch.
Sonal: Proactive and reactive, basically, essentially.
Margit: Yeah. Well, there’s reactive stuff where, you know, things are going great, and people want to write about you, and you…
Shannon: And you wanna take advantage of the building phase, yeah.
Margit: And you react to that. But, like, all of that is building, right? You are trying to see stories that don’t exist, right? You’re in a crisis, you’re trying to minimize a story that very much exists.
Shannon: A very certain type of person enjoys managing through a crisis. And so you wanna get an agency that has that type of person, or that type of deep experience in the trenches.
Margit: Its wartime people.
Sonal: This goes back to the whole notion of specialties, which you both mentioned earlier. So, are there any other specialties on the PR? I’m sure there’s a million flavors, but like…
Margit: Yeah. There are people who are really good at product reviews. And if you’re a hardware company, and like, product reviews are — they’re their own animal, right? Like, and you wanna make them, for the most part, as my belief, really high touch, you know. Someone is there to hold the reporter’s hands — obviously, proverbially, you know, as they discover the product. That’s its own muscle. There’s a set of people who will review products. You know, if you do it right, you know, you even get coverage about, like, the unpacking, the whole nine. But it’s, like, that’s very different from exec comms.
Sonal: So, so far, I’ve heard exec comms, product, I’ve heard crisis. Are there any other flavors?
Shannon: Developer, like, dealing with developer communities.
Shannon: “I could do “GMA,’ ‘Today Show,’ or ‘CBS This Morning,’ which segment do you want?” That’s a real specialty, and those are usually people based in New York who have deep relationships with the producers at these shows. For a consumer-facing product, that’s the nirvana — is to have a “Today Show” slot, right?
Margit: Still, even though…
Shannon: Still, which is hard to believe. All these years.
Margit: I just saw this morning, apparently, in 2019, people will get the majority of their news online and not on TV. I’m like, “It hasn’t happened yet?”
Shannon: That’s surprising.
Sonal: Well, that’s where the reality does come in. I have a friend who founded a beauty-related company, and she was saying that getting a placement in “InStyle” magazine — and also, incidentally, based in New York — was the only thing that moved product for them.
Margit: And the thing is, like, you do the holiday gift guide press tour in July, and you do the little stint, and you do giveaways, and it’s beautiful photography, and it’s all that stuff. It’s, like, it has nothing to do with, like, how you blog for a developer.
Shannon: I worked at eBay for seven years, and so every July, we literally had, like, a Santa in 100-degree weather passing out eBay-related gifts, literally, in Times Square.
Sonal: That’s hilarious.
Shannon: Because that’s when you had to get in the gift guides, was in July — to make it to December.
Sonal: That’s so great.
Shannon: But you need someone that knows that. You need someone that really understands how to execute that type of event, and you need that kind of lead time.
Margit: Yeah. I mean, like, literally, I’ve come across companies where they call in November, and they wanna be in the holiday gift guides.
Sonal: Oh, that’s too late.
Margit: And that’ll be the following year.
Sonal: On the magazine side, like, the thing’s already shipped. Like, you’re already late, physically, let alone editorially.
Margit: You know, if you’re a product company, like, how would you possibly know?
Sonal: Right, exactly. Are there other milestones like that? So, as we’re on this topic of managing an agency — clearly, part of this process — you guys began with the need to discover the stories internally. You’ve talked about proactive and reactive moments, incidental and building ones. Now, what are the other kind of broad milestones to think about in a company’s life cycle that could be newsy moments that an agency could get involved in?
Margit: So there’s, like, you know, we exist, right? And let me just say, a lot of them you bundle together, right, like, “We exist,” and that’s interesting depending on who the people are and what they’re working on, all of that. Then you’ve raised money. And of course, whether that’s an inflection point, the bar for press coverage keeps raising because, you know, people raise rather large rounds these days, right? Then you get a rock star independent board member. All of those are ingredients, right? Okay, product, right, like, and what are the product milestones? And then you have product-market fit where, all of a sudden, 50% of Wall Street uses your product. Like, there’s lots of milestones. And I’m not saying every one of them is a big to-do, but they’re markers.
Shannon: And then you wanna handle them strategically.
Margit: I’m so glad you brought this up. I think a lot of people, particularly when it’s their first time out, they’re lucky that this PR thing happens. They have a nice product, and it’s viral, and this and the other. And they don’t understand, like, how lucky they are, and they can’t separate the two. And then they just think it’s just rinse-and-repeat without doing anything. And those are flukes, right? Most of the rest of us, you need to be very deliberate, and thoughtful, and smart about, like, what moments you aggregate together or can go stand alone, who cares about the different things…
Shannon: What’s the vehicle.
Margit: …and what’s the consolation.
Sonal: What do you mean by what’s the vehicle?
Shannon: Sometimes you wanna put a tweet out. Sometimes you actually wanna just give it to a reporter exclusively. Sometimes you wanna write a press release.
Sonal: Do people still do those?
Shannon: It kinda depends on what you’re trying to achieve.
Sonal: So what are other milestones? I mean, you mentioned earlier the gift guide. Were there any other consumer-type ones like that?
Shannon: There’s a company I’m talking to right now who’s based in L.A., and they wanna go national. So, if you’re really taking your story out of a small area and making it national…
Margit: That’s an excellent place for an agency because, you know, if you are launching — if you’re one of those, like, companies in the transportation bucket, right, like, you’re not gonna put people everywhere, but you are gonna launch in different markets, right?
Shannon: For sure.
Terminology and categories
Sonal: So we’re kinda getting local people, players on the ground. So let’s shift gear here and just go deep for a couple of minutes on some terminology. I love doing this on the podcast. We do taxonomies and terminology.
Shannon: And people mostly don’t like to admit that they don’t know a lot of these PR terms.
Sonal: I know.
Shannon: They think PR is fluffy and, “Oh, I should know it.”
Shannon: But actually, when you dig into it, you realize most people don’t know most of those phrases.
Sonal: Even I didn’t.
Shannon: So this will be useful.
Sonal: I was on the flip side of receiving PR pitches, and when I first came here, someone mentioned GA, and I was like, “What the fuck is GA?” And it’s generally available for the product being available. Let’s do a little buzzword bingo. So AOR.
Shannon: Agency of record.
Sonal: And what does it mean? Why does it matter?
Shannon: It means that you have a master agreement with an agency who’s going to service your business for a certain amount of money every single month.
Sonal: So it’s like a retainer.
Shannon: It’s a retainer. It’s a contract.
Margit: So let me ask you a question. Because you’ve been on the corporate side, so like, you have an agency of record, but you have multiple agencies.
Sonal: Oh, that’s interesting.
Shannon: Okay, so agency of record would be…
Margit: Is that a bragging right, or what is?
Shannon: It’s probably the biggest piece of your budget. It’s the deepest relationship. And, say it’s an agency who covers everything except crisis, and then you have a crisis. You would go outside of your AOR to supplement their skill set.
Margit: With another agency.
Shannon: With a different agency.
Margit: Request for proposal.
Shannon: Request for proposal.
Shannon: Should we do this at the same time?
Margit: Oh, my god. So that’s sort of — oftentimes, companies use this process where they put out an RFP to multiple agencies so that they have some, sort of, standard set of questions and answers, right? And oftentimes, the bigger the company gets, the more involved they can get, and they’re often driven by procurement and not the actual PR team, although they’re obviously orchestrated by that. And it’s sort of, like, who are you as a business, right, like, what are your revenues, team size, locations, all that kind of stuff, right? And then how would you handle X? Or give us your ideas for Y. And then the agency comes in — and oftentimes, you send in the questionnaire, and then there’s sort of this bake-off where you do the proposal, and you bring the team.
Shannon: It’s a dog and pony show.
Margit: It’s a dog and pony show. You come up with really good ideas based on nothing, and then you have to sell. I’m not sure I would recommend them. I don’t think they’re the most effective thing, because it comes down to, oftentimes, where like, that agency has really good ideas…
Shannon: The big thing I would add on RFP, too, is do not bring in the shiny object from D.C., or the shiny object from New York, if that is not your account team. Bring the people who are going to work on the account.
Margit: Oh, absolutely.
Shannon: That is one thing an agency will do, is like, “Oh, John is here from D.C.”
Margit: Our expert from…
Shannon: “He was Clinton’s social media policy person.” And then you never see John ever again. He was there to win the pitch. When I would do RFPs back in the day, I would always tell people, “I only wanna see the team that I’m gonna be working with every day.” It’s really important.
Margit: That’s super important. And that’s why, you know, if you actually do the process that way and you make that requirement, that team is ready to go.
Sonal: You’ve literally onboarded them, actually.
Shannon: They’re in it. Yes. So I’d love to get your perspective on this. If you put your account up for review because you’re not happy with your agency, the incumbent agency should not be allowed to pitch. I think it’s terrible for the agency, and I think it’s terrible for the company.
Margit: I’m gonna say something harsh. If the agency actually wants to repitch the business, you should fire them again.
Margit: Because it’s just a stupid-ass decision. Replace the revenue, learn from — why is the account gone, and then move the hell on.
Shannon: I could not agree more. You set up all these bad dynamics by doing it.
Sonal: Well, I do have a question, though, which is — how do you avoid the complacency problem when you do have an ongoing agency of record, and you wanna light a fire under them?
Margit: So I think OutCast was really good at this because we had clients like salesforce.com, for example. We had, I think, about a dozen years from 1998 onwards, right — through, I think, 5 VPs of marketing before the company filed for IPO. And that was, like, Caryn Marooney. She just did an amazing, amazing job managing that account through changes, inflection points, growth. And what we would do is, we would ask ourselves, we would ask the teams, like, “Okay, so what’s on the to-do list, and what’s not on the to-do list?” And, like, forget what the client is telling you during the weekly calls. Like, what do you think will blow them away? And then go do that. And, like, do not ignore media, because if there’s a good story, you have permission to do everything else. You can have every conversation. You can screw up occasionally. But if there’s no media, then, like, what are you doing? And as a result, we always were called a media shop. And I was like, “You know what, I’ll wear that badge with pride, because I think it’s important.”
Sonal: What does it mean to be a media shop? I actually don’t know what that means.
Margit: That the only thing that you can do is talk to reporters.
Shannon: Or the thing you do best is media relations.
Margit: Right. Look, you’re not really good at crisis, you’re not really good at building out, like, messaging — but like, that’s the thing. It’s, like, you get so mired into, like, “This is what’s on the to-do list.” And mind you, if you’re working with a company, your client may be sophisticated, and they may not be. So you need to do that, like — you need to have your own motor and machine to go, like, “Okay, what should it look like?” And then go do that.
Shannon: And on my end, I would say, at eBay, the best relationship I ever had with an agency was with Capital Communications, who is based in New York. And the reason that we were able to avoid complacency with them is we were basically categorized into different product categories. Basically, they had clothing, shoes, and accessories, but it was like, “If you nail this, you can get another category.” So we kept upping the pie. I mean, we’re not fit for every single category, right, but it was always a possibility. And so that kept them from being complacent.
Sonal: Besides the domains you guys have described — like, consumer, enterprise, some of these pieces of the pie — or specialties like crisis, local — what are your thoughts on the other competencies within a shop? Like, should you go for a one-size-fits-all agency that offers interactive and writing, and other things? Should you go for a boutique firm that only focuses on X? Like, do you have thoughts on the size and the types of the agencies themselves?
Shannon: I don’t mean to sound like a broken record, but it depends on what you’re trying to solve for.
Sonal: Well, that’s a fair point.
Margit: Sort of very broadly, right? If the company is doing well, basically across the board, and it’s global, it’s kinda nice to have an AOR that is global, because you can just turn knobs, you can turn things on and off, and then you can add and layer in on the step that you need.
Sonal: You mean like a global agreement.
Margit: Yes, a global agreement because, you know, if you’re that established, it’s nice to go like, “Okay, I need the Indian people to do X, right? I need the team in South Africa to lay low for a while.” That’s easier. Otherwise, you have to figure out, “Who’s my international agency there? And who manages…?”
Shannon: I do think a lot of agencies promise that they’re amazing at that, “Oh, don’t worry, my Greece counterpart will easily talk to the Brazil counterpart.” It doesn’t happen as seamlessly as it looks, so you really have to dig before you hire them on for a global job to make sure that these processes are really down.
Margit: And you will often give up the higher a bar for the global.
Shannon: For the coverage, yeah. It’s true.
Margit: Because I don’t think, like, nobody can tell me that there is an — I have not seen an agency that is equally excellent in every office that they have.
Margit: I just don’t.
Working with an agency
Sonal: And let’s spend a few minutes now just talking about some mechanics of engaging with an agency. We’ve already talked about the process of why it matters, the terms, you know, the configurations. Give me some more of the nitty-gritty of bringing them into your machinery. So, you guys mentioned, like, you wanna have regular check-ins. Should they be weekly? Should they be daily? Should there be someone in your office embedded? Should there be someone just on a phone call? How do you manage all that?
Shannon: So, weekly, usually, has worked for me in the past. I think embedding them — those are the people who have done the best with the company. They can walk around, they’ve got great relationships, they get a vibe for the culture, they can go to an all-hands meeting and hear the story from the CEO. There was a model, again, with Kaplow, where they had somebody that went on leave for six weeks, and I went to New York and worked out of their office for six weeks. And that was amazing for me, too, to get to know the agency.
Sonal: You inverted it, literally.
Shannon: Yeah, I inverted it. And I got a better view of how the agency ran, and what they needed more from my team, and how challenging the time zone thing was. And it was really valuable.
Margit: There’s nothing that, sort of, is like picking up the phone and going like, “Hey.” It doesn’t have to be, “I’m reporting back to you on what I promised.” It can be, “I just had coffee with a reporter, and they’re really interested in X,” or you know, “Your competition seems to be all over…” like, you know. So just sharing intel back and forth, because you need to communicate enough so that you’re in a groove. It’s a little like talking to our kids. Like, you need to be talking — basically, you need to be in some communication all the time, so that there’s a groove. Because you want to be top of mind for the agency so they’ll pay attention to you, and for the agency, you want to be top of mind so they’ll include you in stuff.
Shannon: One thing we did at LinkedIn, too, is — quarterly, we would sit down with the agency, and we basically had, like, a red, yellow, green on the things that we had agreed they would do, and talk about what was working, what wasn’t. And that was an opportunity not for us to just say, “Hey, this isn’t working.” They were able to tell us, “We can make this work if we had more of X, Y, and Z.”
Sonal: So you set them up for success.
Shannon: Exactly. And it felt like you could have a transparent conversation without hurting the other person’s feelings.
Margit: So I will add one more thing. I actually think that it is important for the CEO to know at least some people at the agency, and for them, occasionally, to staff a meeting. And a lot of people probably disagree with me on that.
Shannon: I totally agree with you.
Margit: Because one is, eventually, there’s a bill, right? And like, if they don’t ever see you, right, it’s, like…
Shannon: Out of sight, out of mind.
Margit: “What am I paying for? What is this?” And also, there’s a reason that person is the CEO and the founder of the company. They are the originator of the idea. They are, hopefully, the most compelling person to talk about what it is and where it is going. And again, if you want to enable a bunch of storytelling, then you ought to have the people have access to the holder of the story.
Shannon: The in-house PR person needs to give up a little of the control to allow the agency in sometimes.
Sonal: This is actually one of the questions I wanted to ask, which is — a founder/CEO should be pretty — not too involved and not uninvolved.
Margit: The thing with, you know — if you are the founder of a company, you’re trusting those people to represent your soul to the outside world, which then gets written up in some way by a neutral third party — hopefully neutral. I think that those are people you wanna know.
Margit: Don’t you think?
Shannon: Yeah, I do, too. And I think a lot of CEOs don’t have the patience, because they, again, have this mindset, “I just wanna outsource it. Isn’t the whole point of me paying for all this so I don’t have to deal with it? You’re taking care of it,” etc., but you’re saying that they are — it’s like sales. You need to put the CEO in front of the account.
Margit: Yeah. I mean, look, if you don’t wanna deal with PR, then don’t bother hiring an agency. A normal reporter — completely reasonable reporter — will expect to see and meet and talk to the CEO.
Sonal: So more on the mechanics side, tell me — we were talking about the RFPs or the proposals, and getting all these. And whether you do it or not, you clearly may have multiple people you’re considering as potential agencies. How do you vet them and know that they’re the right one for you?
Shannon: I think the best agency referrals come from reporters. So, they’ll come in and they’ll pitch, and you’ll say, “Wow, that team was amazing. Great ideas.” But to get to the real heart of who they are as media relations experts, you call reporters you have relationships with and say, “What do you think of so and so at such and such agency?”
Margit: I love you for saying that, because I will tell you, so many people, when I say, “Oh, you’re referencing them with reporters?” they’re like, “Oh, good idea.” Duh.
Margit: That’s their customer.
Shannon: So referencing them, for sure, and then other clients. Either clients that have churned out — you get a lot of feedback that way — or current clients too who are probably relatively happy, you think.
Sonal: What if the problem is on your side as a company? What if the turnover is on your side, and you’re the reason the agency is not doing well? How do you sort of tease apart the truth and the reality? Does it even matter?
Margit: It’s excellent, because many companies don’t even ask themselves that question. So they’ll call, and they’ll go, like, “We’re unhappy with our PR firm.” And then you start digging, like, “Why, what’s going on?” Well, they’re just not executing. And you just try to diagnose, “Okay, so do they know what to do? Are you giving them information? Are they part of…” you know. And something I always say was like, you know, “If you’re a good client, they have a chance. If you’re not a good client, then they don’t even have a chance.”
Shannon: That’s why I like that report card thing, because you can easily say, “Look, you’re not executing on this,” and they can say, “Well, you didn’t give me access,” or “You didn’t return my call.”
Sonal: You mean the red, green, yellow you were talking about.
Shannon: You use that review to basically talk about what you, as a company, could be doing better. And you’re absolutely right, it’s usually two-sided. It’s very infrequently just the agency. It’s just much easier to blame the agency.
Margit: Right. Also, my favorite is, like, new CMO comes in. First thing they do is do an agency review. Happens all the time. But, like, I think it’s just so much smarter to take some time and go, like, “Okay, what’s actually going on here?”
Sonal: So that’s about diagnosing the success of it. How do you know it’s successful, it’s working, that your partnership — this is not a measurement question, because I know we’ve talked about a lot and there’s not a clear-cut answer. How about selling people internally? What if you, the person who’s managing the agency, knows it’s working — but your CFO who holds, like, the purse controller doesn’t agree, or how do you make that case internally?
Margit: Well, you obviously try to explain and educate, like, what it is and what they’re supposed to do. And then, at the end of the day, it comes down to — do you have a mandate? I think it’s good to include everybody in the process and in the updates, have them see and engage with the agency, and do all of those things, right? But at the end of the day, to me, it’s a little binary. You either have a mandate to figure out how to make your function successful within a certain budget parameter, or you don’t.
Shannon: And it’s making sure, too — you can’t be assured that the CFO saw the big story in “The Chronicle” this morning. You actually do need to do some promotion of the work that the agency and the team do together.
Margit: PR it back internally, basically.
Shannon: Exactly. You can just expect everyone’s gonna fall into your story, or absolutely saw it. So you actually have to do a little promotion internally.
PR during an IPO
Sonal: So we talked about some major inflection points in the company. What about going public? So, you talked about, Margit, earlier — about the importance of having PR milestones in place before you go public. So, Shannon, you’ve taken a couple of companies public. What’s some special advice you have for those thinking about that particular piece?
Shannon: So, a financial comms agency is super, super helpful in the lead-up to your first earnings call. So there’s the actual IPO piece, which I think a lot of people think is much trickier than it really is. The day of is a very busy, crazy day, but it’s not rocket science, necessarily. I think getting an agency to help write a script, and get the CEO and CFO to really be on the same page about the story and practice it — it’s a nerve-racking day.
Sonal: For the roadshow?
Shannon: No, your first earnings call post-IPO.
Shannon: So, I think the IPO has this misnomer that it’s, like, super challenging and tricky —and yeah, there’s some complexity to it, but what’s really hard is your first earnings call as a public company. And so that’s where I would optimize for getting an agency in to really help figure out, “Are these two on the same page? What is our story? Where are we, and where are the gaps?”
Sonal: And does that person report into an investor relations function? What if that doesn’t exist yet?
Margit: It depends. I’ve seen investor relations report into the CFO, and the comms person reports, sometimes, to the CEO or CMO.
Sonal: And, Margit, of all the startups you’ve seen, what would you say is the best reporting structure for where an agency and the comms person should, kind of, report into? Is there any variations on that?
Margit: So, I am a proponent of having the PR person report to the CEO. It can report into the CMO. But oftentimes — so if the CMO is a quant person, I think definitely PR should not report into the CMO, because it’s just a different animal. If the CMO is a brand story type of person, it can certainly work. Regardless of who does your review, the PR person needs to have access to the CEO whenever they need to.
Shannon: And then that layer in between, whoever it is, cannot be upset when the PR person goes direct to the CEO and doesn’t necessarily loop into them. So they have to have — everyone’s gotta be okay with the fact that, “I may not report to the CEO, but I have direct access, and I don’t need to bring you in every single time I talk to him or her.”
Sonal: It sounds like the CEO is the one responsible for setting that precedent and culture, that all these pieces are okay.
Margit: It’s telling, right? When a CEO refuses to do that, the caliber of talent they can get just drops 10 notches.
Shannon: And it shows, too, that they may not value the function as much as we would like them to.
Sonal: Okay. You guys have given us a lot of food for thought in terms of how to concretely manage an agency, think about it strategically. What are the things that you wish you could tell founders and, like, hit them over the head with every day — that you’re, “I want these guys to know this?”
Margit: I think founders have an idea that you call a reporter and go, “Hey, can you write this story?” It does not work that way. And I wish people were a little more thoughtful about the function — the comms function — and actually how strategic it needs to be and how well thought out it needs to be before you take a story to an important reporter. It’s not easy.
Shannon: I was gonna argue almost the flip of that, which is, it seems like there’s a new breed of founders who, sort of, are in this internet-native world of “blogging is everything.” Go direct. You don’t need any middleman. Eliminate all the middlemen.
Margit: You can do that, but you will never be as credible as an independent source of information. And you may also not have the eyeballs that you can get when WIRED writes a story, and then it gets shared on social channels. Worse, let’s say you’re established, you’ve done fine on your own, things are great. Well, what if something goes sideways? You have no relationships, you have no trust, you have no benefit of the doubt. All you have is — people, like, hear all of your claims and adoration, and all of a sudden, you have to do a product recall. Wouldn’t you like to have some relationships in place where at least you can explain yourself? I think so.
Sonal: Kind of points in the bank, too. That’s great. Any other final common myths, misconceptions, parting…
Margit: I would just say, you know, as much care as you take with your product and the hiring of your first 10 engineers — and like, whose money you take, right? Take as much care to decide, like — you’re either going to take this function seriously, and then actually do it and learn it, because there are people who are there to help you — or actually don’t bother. Because spending $2 with a half-hearted commitment is a complete waste.
Shannon: And don’t be afraid to admit when you don’t know something related to PR.
Sonal: Hopefully, that’s the point in this podcast. Thank you, Shannon and Margit, for joining the “a16z Podcast.”
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