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When It Comes To PR, Pay For Performance, Not Time
Posted by randy on: 2005-11-28 14:26:54
When It Comes To PR, Pay For Performance, Not Time
Jacqueline Bodnar
As companies become savvier in how they allocate their
promotional budgets, they are rejecting the traditional public
relations service model that has fed the bottom lines of PR
firms for decades. The days of large retainers, endless
meetings, billable hours and illusive results are quickly giving
way to a more effective approach to getting the word out:
pay-for-performance.
It's About Accountability Pay-for-performance introduces
accountability to the process, an element that has been sorely
lacking in the field up until now. Traditionally, companies
wanting to promote a new product or service in the media hired a
PR firm. In exchange for a substantial retainer -- often running
into the hundreds of thousands of dollars -- and billable hours
on top of that, the PR firm committed resources and time to
championing the product or service among the media. Problem was,
that is where the commitment ended. From the PR firm's
perspective, if a press release resulted in a few newspaper
articles around the country, great. If not, no big deal; the
fees were going to be collected anyway. Pay-for-performance
turns the traditional PR service model on its head, mitigating
much of the financial risk that had been assumed entirely by the
client.
"For too many years, clients have paid six-figure price tags for
PR services without any guarantee of results," says Alex
Konanykhin, founder of Washington, D.C.-based Publicity
Guaranteed (http://www.publicityguaranteed.com). "This lack of
accountability would never be accepted in any other part of a
company's operations, so why is it acceptable in PR?"
Pay-for-performance companies like PublicityGuaranteed.com
charge clients only for articles that actually make it into
print or mentions that hit the broadcast airwaves. In most
cases, clients can even place caps on their fees to hedge
against the chance that an article will be placed in more
newspapers than anticipated.
ROI -- From Spin to Precision Demonstrating return on PR
investment has always been a challenge, if not a downright
fiction. The pay-for-performance model greatly simplifies the
ROI calculation while increasing the confidence in the numbers.
After all, quantifying the ROI and justifying the value of a
$50,000 PR investment that yields only 10 newspaper articles is
an exercise in spin that would test the skills of even the most
seasoned PR practitioners. If, however, the cost of placing
those same five articles could be determined precisely -- as
would be the case in the pay-for-performance model -- the math
gets much less fuzzy and the case for added value gets much
stronger.
Is Pay-for-Performance PR Pie in the Sky? The
pay-for-performance trend has already transformed the online
advertising world from the Wild West of pop-up ads, e-mail SPAM
and search engines to a finely tuned device that generates
revenue by connecting sellers to motivated buyers. Google and
Yahoo's Overture, for example, have built profitable
mega-businesses by charging advertisers by the click. A Google
search can yield hundreds of millions of matches, but click on
one of Google's spotlighted sponsored sites -- a good indication
of buying interest and motivation level -- and the sponsor pays
a fee.
Companies like Publicity Guaranteed are already seeing a similar
transformation the PR industry, and clients seem thrilled with
the results. "We hear many horror stories from our clients about
PR dollars from previous campaigns going down a black hole,"
says Konanykhin. "The pay-per-performance setup removes that
horror for them."
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About the author:
Jacqueline Bodnar is a freelance writer and owner of Odyssey
Writing, a company specializing in corporate communications.
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