Phoebe Netto gives us the inside scoop into the workings of the PR world.
Knowledge is PR
Demystifying how PR agencies work is the first step to making sure you attain a good return on investment.
Public relations is more than a numbers game but, as with any investment, you still want bang for buck. With almost as many fee structures as there are agencies, it’s no wonder many businesses remain confused about the figures thrown around for PR services.
The first step is to understand how PR agencies work and how they charge.
Understanding PR rates
Agencies charge according to how much work they believe they will need to put into representing you and this will vary according to your PR goals and the time period for, which you wish to engage them. Here are the most common fee structures:
The price range is wide, so obtain quotes from at least three agencies and examine the details, for example included services and extra services, to ensure you are comparing apples with apples.
Pay per media clip
This is a good way to ensure you only pay for the coverage you get, but you need to define what constitutes a media clip. It’s no good having your high-end restaurant featured in Pets magazine, nor is a passing mention worth the same as a profile, review or by-lined article. If you are confident you can set the parameters for this type of engagement, then this could be a good entry into PR if you are unsure about its effectiveness.
For clients with a more mature PR outlook, however, pay-per-clip is rarely the most cost effective.
The most common charging structure, a retainer, is based on an hourly rate and a program that requires a set amount of work each month, plus ancillary charges such as media monitoring, phone calls, copyright fees, travel to meetings, and subscriptions.
Ask what expenses are included in the retainer and what would be considered extra so you can predict your outlay.
Retainers are the best option for regular PR activity. Not only does it allow for better cost management, you can also manage time with a ‘rolling retainer’ arrangement where unused hours can be rolled over into the next month or higher activity in one month can be offset by lower activity in the next. This makes budgeting and planning easier: you pay the same amount each month, and there are no wasted funds.
For one-off campaigns, an agency will set a project fee based on billable hours or activity. Make sure you agree on the scope of work upfront and set clear deadlines.
Want to do your own PR but need some help? Some agencies will sell you a media list or write you a press release and let you do the rest. This can be a good option if you’re PR savvy and just need some contacts, but DIY amateurs risk being blacklisted by journalists for using an out-of-date media list or bad press release.
Another option to consider is using a PR consultancy to help you get the basics right, equip you with the tools and point you in the right direction. For example, savvy business owners can develop their own by-lined articles while using the services of a PR consultancy to secure media opportunities.
Securing return on investment
Now you know how PR agencies charge, compare that with what you’re trying to achieve and what you’re actually buying when you engage an agency.
A business owner who is looking to educate him or herself on PR tactics in order to eventually take the DIY path will be after a different outcome compared with someone who wants to outsource this area to take it off their plate and make the most of the PR agency’s expertise.
In the former example, the return on investment will be measured by the skills gained and the future savings made from not having to engage a PR agency; in the latter, the amount of the business owner’s time saved and the greater results given their expertise is the measure.
Another way of looking at return on investment is whether engaging an agency gives you access to media you would not be able to access on your own.
PR professionals take time to build relationships with journalists and bloggers and trust is difficult to replicate quickly. If this is your aim when engaging an agency, ask to see examples of coverage and don’t be afraid to request testimonials from clients or even journalists.
As with any investment, do your due diligence by researching potential PR agencies. As a general rule, it’s good to start with a shortlist of high quality agencies that have experience in your industry or size of business.
When you request a quote, don’t be afraid to ask what their approach would be if you were a client so you can compare attitudes as well as tactics. This will reveal whether they understand your business, its goals, its unique selling proposition, the industry it operates in, and your ideal customers.
Also enquire about what kind of coverage to expect — while this is hard to guarantee, a good agency will have a sense of how difficult it will be to secure coverage for you depending on your industry, available media angles, timing and other factors. You can then evaluate whether the effort required to achieve your PR goals versus what the agency charges is fair and reasonable.
PR return is in the eye of the beholder, so outline what you want from the engagement before measuring whether you’ve achieved a good return on investment. That way, you’ll gain a clear-eyed look at the real value of hiring a PR agency.
Phoebe Netto is the managing director of Good Business Consulting.
Analysis: The misnomer of bank regulation and loan costs
By Adam Zuchetti
Analysis: Bank ‘misconduct’ a woeful understatement
By Adam Zuchetti
Analysis: Banks wrongly targeted as business custodians
By Adam Zuchetti