What "Public Relations Agency of Record" Means for Your Business:
Although no formal definition exists of what an agency of record (AOR) agreement consists of, understanding and considering the various types of client/agency relationships that can fall under the term may have the potential to drastically alter the outcome of any PR campaign. In general, a public relations agency of record enters into an exclusive relationship with a client, which means the agency will refrain from doing business with competitors. In return, the client awards the agency exclusive rights to perform all activities related to PR and communications. This last “requirement,” however, may be adjusted to allow for the inclusion of other PR firms with the understanding that the AOR retains the lion’s share of work. More of a “preferred agency” than an AOR, this circumstance can sometimes arise due to the increasing influence of new digital/social channels, where one agency may not be capable of effectively performing in one or more of these new emerging practices.
Another form of this affiliation can be found in the growing presence of multinational companies operating in numerous markets around the world. Known as a “preferred global relationship,” agencies under this designation can enjoy an “AOR-like” relationship within a given market or markets. This means that a centrally located corporation enters into a global contract with an agency, requiring all company personnel to delegate PR matters to that chosen entity. Unlike a traditional AOR relationship, however, such a contract allows for employment of other firms, should the preferred agency not possess the right people or needed capabilities within a given global market.
There are multiple AOR benefits to be considered when trying to determine if such a relationship is best suited for your company's needs. An AOR status provides the agency with the ability to thoroughly immerse within a client's business, providing a clear line of sight across the scope of operations. This allows for a comprehensive understanding of the client's background, its current needs and its business goals for an AOR is better equipped to implement a plan of action that can explore and identify all potential visibility- and reputation-enhancing opportunities.
Larger corporations tend to favor AOR arrangements as they believe there to be more value in placing an agency on retainer. They may feel that paying a recurring fee is worth the cost, as any PR event or need which arises can be dealt with swiftly and efficiently by a professional team that is always on hand. Others may omit this form of relationship from their associations if funds are more limited and they can only afford to retain PR services on a case-by-case basis. Another motive could be the existence of internal staff (in-house) that manages all or most PR functions.
Making a Decision:
Despite the various forms an AOR relationship can take and the numerous benefits it may bring, the general consensus appears to be that such associations hold no adverse ramifications for either side. Decisions to go forward with an AOR typically rest on financial value considerations and mutual dedication, rather than concerns over risk or impact on success.