There is no place for Jim Young at my shop.  Who?  He is hands down my favorite character from the must-see movie Boiler Room about the ugly underside of chop shop stock brokerages.

Here are a couple of quotes from Jim – expertly played by Ben Affleck – as he attempts to woo a few twenty-somethings to join the firm as broker trainees:

“You become an employee of this firm, you will make your first million within three years. I'm gonna repeat that - you will make a million dollars….You want details? Fine. I drive a Ferrari, 355 Cabriolet, What's up? I have a ridiculous house in the South Fork. I have every toy you could possibly imagine. And best of all kids, I am liquid…They say money can't buy happiness? Look at the smile on my face. Ear to ear, baby.”

As the great recession marches on, public relations, digital marketing, advertising and social media agencies of all sizes get frothy at the hint of new business.  Clients know it and they are extracting lots of freebies (http://www.adweek.com/aw/content_display/news/agency/e3i344418db676344f07e91f1c63d19bace) from firms desperate for consideration.  Fair enough…it’s reflects the current market environment.

What is unfortunate is the whipping that typically continues when it is time to negotiate compensation for the selected firm.  “We are looking for an agency to invest in our success,” was a comment thrown my way recently.  Or, how about this one:  “With your track record I am sure you would be more than happy with a pay for performance relationship.”

Fair compensation for a public relations agency has long been and remains a work in progress (http://www.imediaconnection.com/content/23599.asp).  In fact, I have found the traditional monthly retainer model fails both the client and the agency.

From the client’s perspective, they assume all of the risk.  No strategic counsel.  No creative thinking.  No results.  Too bad…the agency still gets paid in full.

The flip side is a PR shop desperate to manage scope creep (http://en.wikipedia.org/wiki/Scope_creep) while demanding unsustainable work levels from its staff.

What are the two client complaints most often heard about PR consultancies: inexperienced mid and junior-level staff and employee turnover.  Hello…that is a direct result of the retainer model.

At Strategic Communications Group (Strategic), the lone conclusion we have reached is the importance of flexibility in the structure of compensation.  Our suggested methodology is a time and materials relationship with a monthly ceiling, based on an agreed upon scope of work and performance metrics.

However, we often work in a project environment and are comfortable structuring shared success relationships.  What is most important to us is that the process of defining compensation be collaborative and that the client demonstrates a commitment to the success of the program.

When you make “great work for great clients” your benchmark and stand firm in a desire to earn a fair profit, then the financial structure of the relationship tends to work out.  Sorry, Jim Young.  There’s no room for you at Strategic.

Marc Hausman is president/CEO of Strategic Communications Group, a public relations and social media consultancy based in Silver Spring, Maryland.  Read more at: http://www.strategicguy.blogspot.com.

Things often get chippy when there is a changing of the guard.  It happens in sports.  In happens in politics.  And it happens in business.

The graying generation and the wunderkinds point fingers and cry foul about how the other side simply doesn’t get it.

There is a whole lot of finger pointing right now in the world of technology reporting.  The New York Times’ Damon Darlin fired off this weekend in an article entitled Get the Tech Scuttlebutt!  (It Might Even Be True.) (http://www.nytimes.com/2009/06/07/business/media/07ping.html)  Darlin contends that well read blogs like TechCrunch, Gawker and Gizmodo dance around the tenets of good journalism for the sake of speed in reporting and attraction of audience.

In the article Darlin quotes TechCrunch’s Michael Arrington as explaining, “Getting it right is expensive…Getting it first is cheap.”

Darlin’s lesson to readers: don’t trust the content of even the most respected and well-read blogs.  Of course, the implication is that the market should embrace newspapers like the New York Times, regardless of the viability of their business model.

Arrington was quick to shout back with a rebuttal entitled The Morality and Effectiveness of Process Journalism. (http://www.techcrunch.com/2009/06/07/the-morality-and-effectiveness-of-process-journalism/)  In addition to dissecting the flaws in Darlin’s reporting, Arrington presents his case for TechCrunch’s approach to content development.

“We don’t believe that readers need to be presented with the sausage all the time,” he writes.  “Sometimes it’s both entertaining and informative to see that Sausage being made, too.  The key is to be transparent at all times.”

My take is that in the near-term there will continue to be a distinct and equally important place in the information chain for mainstream media and industry blogs.  However, the shift in influence (http://strategicguy.blogspot.com/2009/06/corporate-budgets-must-reflect-shift-in.html) to blogs, social networks and online communities will continue to accelerate.

This changing of the journalistic guard will set in motion an important chain of events:

1.  Market demands will drive traditional media outlets and industry blogs closer together in their content development and reporting methodologies.  Journalists will increasingly become more lenient in their adherence to the peer-reviewed editorial process, while tier-one bloggers will add a level of diligence to retain credibility.

2.  There will be consolidation as publishers acquire blogs that have attracted a strong and loyal following.  Ultimately, a content hierarchy will be established in which news reporting and analysis is presented by a publisher in different formats across multiple media.  This is somewhat comparable to how Disney produces and broadcasts sports entertainment on its ABC and ESPN properties.

3.  As acquired industry blogs further evolve their content methodology under corporate ownership, the gossip and rumor reporting void will be filled by upstart bloggers who see an opportunity to attract attention and readership.

Marc Hausman is president/CEO of Strategic Communications Group, a public relations and social media consultancy based in Silver Spring, MD.  Read more at http://www.strategicguy.blogspot.com.