In Public Relations, Pay For Performance...Not Time

Your ROI in PR Comes From Hard Results

Public Relations Performance
Public Relations Performance. Getty Images

It may seem like a no brainer to talk about "pay-for-performance" these days. After all, as the influx of specific data becomes the key to measuring campaign successes, isn't pay-for-performance the only way to manage any kind of campaign, let alone public relations?

Well, for the longest time, the PR industry has had a payment model that goes against that. They request that you pay for their time, and let the chips fall where they may.

Success, or failure, the results for them are the same...an invoice that must be paid. 

However, as companies become more savvy in how they allocate their promotional budgets, they are rejecting this 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. Make no mistake, pay-for-performance is changing the way PR firms bill their clients. And that's good news for you. 
 

Accountability is Everything

Pay-for-performance introduces accountability to the process, an element that has been sorely lacking in the PR 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.

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 placement agencies charge clients only for articles that actually make it into print.
 

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.
 

Pay-for-Performance PR Is The Way Forward

The pay-for-performance trend has already transformed the online advertising world from the Wild West of pop-up ads, Email 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.

There are many horror stories from companies relating to PR dollars going down a black hole. PR can be affordable and the people in this business can be accountable for results.

Alexander Konanykhin is the President of Publicity Guaranteed. His company specializes in generating cost-effective pay-per-placement media exposure for businesses all over North America.