The public relations industry is in a constant state of flux, and the lure of building proprietary tech can be tempting for agencies. Rather than exploring proven SaaS options on the market, how hard could it be to launch your own in-house platform?
Let's be blunt: This is a treacherous path that can lead to financial ruin and strategic missteps. Here's why PR agencies should resist the urge to become tech companies and instead focus on what they do best: crafting compelling narratives and managing reputations.
Building tech is a cash-burning endeavor that can quickly drain your resources. It's not just about the initial investment; it's the years of sustained funding required before you see any return on investment.
This is especially salient for new agencies trying to get off the ground; a recent study found that 90% of startups fail, with 10% failing within the first year. Do you really want to gamble your agency's future on those odds?
Speaking of finances, let's talk EBITDA. Building and maintaining your own tech platform will crush your margins. It's a constant drain on resources that could be better spent on talent acquisition, client services, and business development.
Maintaining a tech platform isn't a set-it-and-forget-it affair. It requires a dedicated team of developers who are always on call, ready to squash bugs, roll out updates, and build new features.
And let's face it—the world's most innovative software engineers aren't exactly lining up to work for PR agencies. They're being courted by tech giants and cutting-edge startups that can offer far more exciting challenges and lucrative compensation packages.
If your PR agency attempts to build its own tech, there's also the risk of developing "Stockholm Syndrome" with your own creations.
When you're too close to the product, you might become captive to your clients' specific requirements, losing sight of broader market and client needs. This myopic focus can lead to a platform that's great for a handful of clients, but irrelevant to the wider industry and future clients.
Instead of risking time and resources spinning up your own tech, license or white-label existing technology platforms that are purpose-built for PR professionals. But be warned: not all platforms are created equal.
In the end, the boldest move a PR agency can make is to know its strengths, recognize its limitations, and partner with true technology innovators to deliver unparalleled value to clients.
That's not just smart business—it's the future of PR.
