What is Pay-for-Performance PR?

For many small businesses and startups, getting into the news can be a make-or-break proposition. In other words, a well-placed article in an influential media outlet in your hometown newspaper or a well-regarded online blog could propel you from total obscurity to over-night fame.

But a common problem faced by many small businesses, and particularly startups with very little funding, is that they can’t afford the usual PR firm retainer, which can cost up to $5-10,000 per month depending upon the firm and level of services provided.

What the Heck is Pay-for-Performance PR?

Pay-for-Performance PR (also known as Performance-Based PR) is a relatively new pricing model in the PR industry. Nevertheless, it’s one that’s gaining a lot attention, particularly among cash-starved businesses (and nonprofits, which, let’s face it, are always cash-starved).

But what exactly is Pay-for-Performance PR? Is it a PR model entirely based on commissions? Something you don’t pay a dime for unless there is “performance” of some kind? Well, not exactly.

I have been running my own PR firm in Austin on a Pay-for-Performance pricing model for nigh on three years now, which means I can speak with a little authority on the matter.

Pay-for-Performance PR combines the best of both pricing models in that the high up-front retainer PR firms are known for is reduced to a fraction of the normal cost. A good portion of compensation, perhaps up to 60%, is then deferred to the back-end and tied to actual media results.

Risk-Reward equals Win-Win

Say a PR retainer normally costs $3,000 / month. A performance-based PR firm might ask for around $1,000 – $1,250 / month and then set up performance goals for targeted news media placements in local and national news outlets. Depending upon the bonus structure, the bonuses could yield an additional $1,000 – $2,000, which would only be paid if and when the media placements go live.

Pay-for-Performance PR is very bottom-line friendly: you pay a reduced retainer, and bonuses are triggered only when a successful media placement occurs, which usually yields an economic benefit in the form of leads, web traffic, and brand awareness for the small business.

The reduced monthly fee still allows a performance-based PR firm to get to know you well, which is necessary to help it formulate a PR campaign and start pitching your news to the media.

Some PR Firms Will Disagree

Now, I know many traditional PR firms will disagree with me and say that they provide plenty of “results” and that the up-front retainer is justified. After all, they provide lots of services like B-roll (video of your company that can be used for TV interviews), message maps for elaborate campaign planning, a dedicated account representative, email blasts out to 1000s of media outlets. This traditional approach may work well for large corporations, but I don’t know many small businesses and startups that need to pay for a lot of extra services not directly tied to media placements. Aren’t you paying a PR firm to get you in the news?

In the era of pay-per-click, SEO, and other lead-generating activities – all of which are tied to measurable results – there is a good chance Pay-for-Performance PR is here to stay.

Can’t Hurt to Ask

If you are working with a PR firm right now, or thinking about working with one, then don’t be afraid to ask about performance-based PR as a pricing option. After all, it’s your hard-earned money. If you are being asked to invest in a PR firm then you have a right to expect the best results possible for your dollar.

For more information on questions you should ask a PR firm when looking to hire one, check out this article in Entrepreneur, where I was quoted and said you should not be timid about asking if a firm will consider a Pay-for-Performance PR model.

Until then, may the media be with you!

About Dave Manzer: Dave Manzer founded his own Pay-for-Performance PR firm in Austin called Dave Manzer PR and Marketing in 2009 to help small businesses become recognizable brands through creative PR campaigns. He also launched PR over Coffee to provide small business PR advice so that entrepreneurs and startups could practice “DIY” PR and promote themselves to a wider audience. Dave’s innovative MyLocalReporter app allows small businesses to find and pitch national and local reporters in up to 12 cities in Texas, California and Florida. To book Dave as a speaker or pick his brain for the next big PR stunt, feel free to email him at: info(@)PRoverCoffee.com.

2 Comments

  1. Alan Graner says:

    For me, pay-for-performance PR isn’t PR–it’s basically media placement. Instead of concentrating on the messaging, you concentrate on the placement. It also emphasizes quantity over quality: getting items published in a dozen third-tier publications becomes more important than publishing in a single top-tier publication, which can take a lot of time and effort.

    • Hey Alan, thanks for your comment. Yea, there are some pay-for-performance services out there that fall into that trap. Because I started my PR agency in Austin to serve a mostly bootstrapped startup community, I quickly realized I needed a unique approach to help minimize up-front risk while still building the proper value for services provided. My approach blends a lower retainer – enough to get the basic research and message design part developed – with performance-based bonuses tied to actual media placements. How I avoid the 3r tier blog mentality you mentioned is to tier my pricing to incentivize high-value national media placements like TechCrunch, CNN and WSJ. It’s not a perfect recipe for every client, to be sure, but it works for some. Again, thanks for your thoughts.

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