August 5, 2010

I touched upon this topic in “So You Think You Want PR?” however get asked about this enough I felt it would be a good idea to expand. I often get asked by potential clients if I offer a payment structure known as “pay per placement.” The simple answer is: no.

While this structure may sound appealing to brands seeking PR [especially those on a budget], let me tell you why pay-per-placement may not be all that it seems. Most PR agencies and freelancers work on a monthly retainer for ongoing PR outreach, or a flat rate for a short-term project. A pay-per-placement structure, on the other hand, is set up so the client only pays the agency for press that actually comes out. Understandably, this can seem awfully appealing to a brand. However, for brands on a limited budget, this structure can be costly.

Real-Life Scenarios: The Debate Begins
A successful PR campaign primarily consists of two things: time and consistency. It could take days, weeks or months of work to get that one placement in Lucky magazine.

• What if your publicist confirms a news story in Lucky, and then at the last minute [after hours of work] the editor pulls it, it gets bumped to another issue, or worse – the magazine folds? [True story, I have personally had this happen with a confirmed press hit in a national, monthly magazine that folded the same month the story was supposed to run – bummer].

• Let’s look at another example. What if your publicist lands a national morning show segment, but the segment runs out of time before they get to your product? Or a breaking news alert interrupts the broadcast and no one sees the segment?

So what is fair? Is it fair to compensate your publicist for the work and effort put in? Or should he/she not be compensated at all since the hit didn’t actually run due to circumstances out of his/her control? Hence, the pay-per-placement debate begins.

Measuring the Value of PR
This brings us to another issue with pay-per-placement – how do you measure the dollar value of press? It may seem easy to say, “x” amount for a magazine, “x” for newspaper, “x” for broadcast, “x” for social media hits, and so on, but you really have to account for numerous factors. Are you paying different amounts for national vs. regional press? Are you basing it upon, circulation, impressions [website statistics]? What about the actual content? Magazines hits can vary from a 1-line mention to a ½ or full page feature, to being included in a product roundup to a full-page spread. A blog hit could range from a simple mention [1 day] to a homepage feature story [2 weeks].

The Inherent Value of Great PR
Beyond external variables and the price point debacle, don’t forget that in addition to your PR agency’s time, you’re also paying for their value – namely, their strategic insight, industry knowledge, contacts and connections. So while on the receiving end you’re only seeing the press hits, on the other end there’s consistent, diligent work day after day pitching, securing and following up on leads, developing and maintaining key relationships, and ultimately keeping your brand top of mind in the media to maximize all opportunities. These tactical elements are all based on a strong strategic guidance, planning and deliverables working to build the awareness, reputation, credibility and equity of your brand.

Pay-Per-Performance PR Isn’t Cheap
But wouldn’t someone be more driven to work extra-hard, given the incentive of getting paid upon performance? In some cases, yes – especially if they’re charging extremely high rates for each placement. Be careful… just because you’re paying for performance doesn’t mean it’s going to be cheap. Unfortunately, more often than not your brand gets put on the back-burner, when utilizing this type of payment structure. Instead of consistently pitching and maximizing any and all opportunities, your publicist may only bother to pitch if he/she knows it’s a sure hit. So, it’s highly likely you will miss out on opportunities that may not seem as sure or may just simply require more work to secure. In the long-run pay-per-placement PR can and does prove to be more costly.

A Healthy Balance of Accountability
When compensating your publicist on retainer, how do you really know he/she is actually doing the work? For starters, build in a level of accountability and agree to set levels of activity each month. Also, review your PR agency’s portfolio, case studies, client references, testimonials, etc. We know PR is a huge commitment, especially for a new brand, and any good PR agency will be more than willing to share past history and track records to prove to you their value. Do not be afraid to ask questions during the course of your PR relationship either. Want to know what pitches we’re working on? What press leads are pending? Confirmed? What exactly we’re doing over here on a daily basis? Ask us. It’s your right and we will be happy to tell you!

Public Relations is highly valuable and an effective component of a brands marketing mix and a worthwhile investment. I hope with the information presented you have a better idea of how PR works, and can make a more informed decision. With this, I leave you to your good judgment. Be smart; go with your gut, and good luck!

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