Richard Etchison August 8, 2018 | 05:32:38

Does Pay-For-Placement PR Work?

When companies choose a PR firm, the compensation model is usually a factor. Most PR agencies bill on an hourly basis, or in monthly retainer fees. But there’s another way of billing that’s fairly controversial among agency professionals,  — the pay-for-placement method.

Can it work?

We may be biased, because we’ve never worked on a pay-for-publicity basis, but it’s fair to ask if it can be a better model for some clients. So, we talked with someone here who used to work at a pay-for-placement agency and did a little research.

The pros & cons of pay-for-placement PR

Pro: You get what you pay for

When hiring a PR agency, companies often ask, “How do I know you’ll generate results?” And it’s true, when it comes to earned media, PR teams can’t guarantee exactly when the coverage will be generated, nor do we have perfect control over the content. Clients may wonder if their firm is working as hard as they should for the retainer, or billing the right amount of hours. In theory, at least, pay-for-placement eliminates the uncertainty that comes with other billing methods.

Pro: Just gimme publicity

Maybe the model works for a smaller company whose PR needs are limited to earned media. If an early-stage company or startup feels it just doesn’t need a PR agency partner to help develop communication strategy and it has little need for overall reputation management, messaging, thought leadership, media training, or other benefits of a PR services partnership, then a simple pay-to-play publicity package may suffice. But it’s hard for us to imagine how the publicity results can be truly high-quality without a proper strategy, message development, and ongoing agency advice.

Con: Quantity over quality?

You get what you incentivize. So the pay-for-publicity method would seem to emphasize quantity over story quality. X dollars for X media placements sounds equitable, but a given story may have far less actual publicity value than another. Some articles may feature the company or product prominently, while others may only include a mention; articles vary in length and tone; some stories may be highly searchable, while others are behind a paywall. For a B2B tech company, great coverage in a trade publication or a good review by an analyst may yield greater value than a feature in Forbes. The dollar value doesn’t consider any of these factors, and if it does, it’s probably hopelessly complicated.

Con: It discourages fence-swinging by the agency

Generating large, high-impact media coverage in a top-tier business publication or TV news program can take months. An agency that operates on the pay-for-publicity model still has to pay its salaries, so chances are its team won’t invest the time in the big-ticket stories that take time to deliver. And the client may lose out on a typical agency’s value-adds related to media relations and merchandising of earned coverage. A good PR team will seize reactive media pitching opportunities that pop up with breaking news, but they don’t quit when the article goes live. PR pros amplify and leverage any earned media wins to maximize impact. This can be absent in a pay-for-placement relationship.

Con: It’s too transactional

The highly transactional nature of the pay-to-play system can limit the client-agency relationship, and the value both parties derive from it. When a PR team truly knows the client’s brand voice and is immersed in its culture, it can tell its story most effectively. But again, that takes time. PR teams whose financial model encourage them to invest the time in long-term, mutually beneficial relationships with clients will offer a deeper level of service than those simply looking to score media placements for fees.

Big con: Pay-for-placement can invite abuse

The pay-to-play mindset may tempt some to cut corners or worse. Just last month, Buzzfeed exposed a  contributor who was taking payments from clients in exchange for linked mentions in his own articles in media outlets like Entrepreneur. PR agencies have also been caught offering journalists kickbacks to publish for their clients —  payola, plain and simple. Because of this, many journalists frown on the PR pay-for-placement compensation practice; TechCrunch announced it wouldn’t work with such agencies.

Done right, the pay-for-placement model can probably work for companies at certain stages of development. But given PR’s relevance to a company’s overall reputation and its role in helping attain business objectives, most can’t afford to neglect a fully realized PR approach, no matter the client-agency billing system. For a deeper dive on various agency billing models, check out this post on how PR agencies budget and bill.

3 thoughts on “Does Pay-For-Placement PR Work?

  1. As a veteran PR professional that has worked and built a successful national PR firm under the the pay-for-performance model for the last twenty plus years, it’s difficult to image this kind of professional closed-mindedness still exists. There’s so much wrong with both the reasoning and the conclusions of this piece, I don’t know where to begin. And, it’s full of the jargonistic BS that we have long fought against; and apparently must continue to do so. Sigh ????

    1. Thanks for the comment, Dick. Have you blogged recently about how and why it works for clients? Obviously we haven’t embraced that model, but when I was at GCI/Grey we offered “performance pricing” that was basically an agency incentive, and clients really liked it. (They didn’t take us up on it often because it was hard to agree on goals and metrics – that’s the real trick.) But it’s a fascinating discussion, and we should probably follow-up with a post about broader performance pricing options.

  2. It seems it depends on your experience. We get calls from people who have come off retainer agreements with zero to show because they never asked for a test or guarantee and got stuck in an agreement they could not exit with no stated deliverables.
    We will do a one week test with 2,400+ placements as our guaranteed minimum at a fixed cost. For 32+ years we also offer a 100% satisfaction guarantee or another free.
    You wouldn’t buy media without a guarantee it would run, be sure the deliverables are in your contract and you can exit immediately if they fail to deliver. We place stories within 24 hours and prove it.

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