I was recently asked by a previous colleague to create and implement an effective public relations campaign for his highly innovative product. I was thrilled with the idea of working with him again because he is super smart and the product is original, relevant and he had a good story – the perfect recipe for good PR. The ideas were churning, as we chatted back and forth, then, we came to the part of the conversation where we needed to discuss compensation.

I have blocked out the details, but it went something like this: He would pay me a percentage of sales generated by any media coverage garnered or just per article. This is what is known in the Public Relations industry as PPP or Pay Per Placement. I had to pass, because, having worked in PR for over 15 years, I know that my skills, knowledge, time and expertise are worth some form of compensation, even before I earn my first piece of coverage. He didn’t see it that way. (But of course, he was lovely about it and I still dig you dude, just in case you’re reading this.)

Coincidentally, this issue had already been bothering me because I am often asked to provide public relations services for free. And not from non-profits looking for volunteers. I am also having to defend my fees to potential clients (which, actually, I don’t…I give them the fees and we possibly negotiate and either I get paid or we don’t work together.) But it is an issue that I have seen consistently throughout my career; the idea that PR is FREE and therefore the person who makes it happen 40, 50, 60 hours per week will do it for free. To compound the issue, most of the people who are asking me to do this work have zero marketing budget or marketing experience, but still expect to successfully promote their company / product.

Now, with social media, people really think it’s free. Yes, Facebook, Twitter and MySpace accounts are free – but that is not a PR campaign. It’s barely a tactic and not even close to a comprehensive strategy. The whole idea of real companies being launched with zero marketing budget is an issue that intrigues and irritates me so incredibly, I was forced to do what I often do in these situations: I did one of my not-so-famous totally non-scientific online polls to see how other PR professional felt about the matter.

No sooner than I typed my query, the emails, notes, and posts began flying!

Then, later, just by good luck, I found my favorite quote from a post by PR/SM thought leader Todd Defren (Shift Communications) who noted on Twitter (@TDefren) that “You can’t under-fund something and also complain about the results.” Yep.

I must be smart, because he is and that is exactly what I was thinking! But wait, there’s more. My PR friends were so fired up about this issue that I just knew I had to share some comments with you.

Get cozy and settle in now, because we PR people can write a lot!

Question: Just got another request to do PR on a pay for placement basis…had to pass. In this economy, as a PR pro, are you going PPP, lowering fees, changing fee structures, or doing what you always did? Please share!

Sample of responses (some edited for clarity):

  • Good for you for taking a pass. No matter how good you are, you can’t guarantee placements and it is outrageous for a “client” to want to pay you that way.
  • It’s a violation of the PRSA Code, if you happen to be a PRSA member.
  • Whenever this comes up, I counter that my time is worth something and that PR work can not guarantee desired results unlike advertising.
  • Counter pay-for-placement suggestions with a different model: A base fee (either fixed fee or monthly retainer) combined with a “success fee” that’s paid out only if they meet one or more measurable business objectives tied to the communications effort.
  • The other factor about PR not being advertising is that, sometimes, while you don’t get immediate results, you do establish a genuine relationship with the media that could eventually bear fruit. Sometimes, too, a journalist may like your idea, but can’t follow through on it right away. How would you charge such an intangible? Finally, in today’s internet-driven world, your press release gets a lot more visibility independent of editorial placements that could drive business.
  • I think PPP is a bad idea, not because it transfers risk to the practitioner, but because it belittles the role PR should be playing in business. It puts PR practitioners into the “media relations” box, which we have outgrown considerably. I think it’s a sign of a client who is not really going to value the practitioner’s services, skills and expertise. A potential client asking for PPP sets off lots of red flags to me.
  • When a potential client asks for a PPP payment arrangement, run the other way. You’re dealing with a naive client. Plus, as others have stated, PPP is a violation of PRSA standard of ethics. Besides, any PR consultant worth their salt knows that PPP is wrong. Tell the prospect to “GO BUY AN AD.”
  • Publicists, media strategists, and others in the field should know a good story when they see one. If the client has a legitimate story or message, with tenacity and pitching talent, you’ll get the placements.
  • Analogy: If you needed a medical procedure, do you think a surgeon would accept a Pay for Success arrangement? Not all surgeries are successful! Just as there are no guarantees in medicine, and there are no guarantees in media relations/publicity placements.
  • Public Relations is a fee for service business. Any client who pay on spec or for placements, will go to the bottom of the workload pile. Why should you spend a minute on someone who “might” pay you, when you have three clients who trust you, like you, and pay you at the beginning of every month.
  • How the heck do you price a story that goes viral? Ludicrous.
  • As far as PFP, I would never consider working ‘on spec.’ Obviously, the client doesn’t think they should pay for anyone’s time. And again, stories pitched now are seeds being planted for future stories. If and when a story generates, will that client be willing to pay for it or will they say it “happened on its own”?
  • You draft and pitch a story that either runs later on or gets used, but your clip service misses it. You did the work, you got the story placed, but you didn’t get the credit. Yikes!
  • To be paid only upon placement undercuts every reason to go into this business. When I was on the client side, I would never hire anyone who could guarantee me placement, because it simply can’t be done. Ideally, it should however spark another conversation: why does the client desire media attention? What do they want to accomplish? Once you understand that, you may realize that media placement isn’t the right tool for them. I’ve had experiences where that’s been the case and have ended up with longer-term, much more lucrative contracts because I’m able to link communications efforts to their business goals.
  • I think you were smart to stick to your guns regarding compensation. Doing something for nothing will give you some nice pieces to show off to other clients but does not pay the bills. I would ask this firm, do they pay for their legal and accounting services the same way they wanted to pay you.

And my favorite comment:

  • It’s obviously a prospect that doesn’t understand our business. I don’t understand law or accountancy either, but I expect to pay for expert advice from those who do.

I agree with all of the above. Now that we have heard what the PR pros think, I would love to hear from clients / end users. What makes the fee for professional services format such an issue? When I visit the doctor, he doesn’t guarantee that I will be cured, but I certainly have to pay for his time and effort…same thing with accountants, engineers, architects, interior decorators, and therapists.

So, dear, valued business owners and potential clients, what do you think? Would love to hear your comments.

Best,

Jules

25 thoughts on “PR: Pay-Per-Placement, Fees or FREE?

  1. Jules,

    If clients understand the value of having others talk about them, compared to talking about themselves, they should know that such value comes with a price. The person you were working with clearly knew that, so you were wise to take a pass on this one.

    Top direct response marketing copywriters get a high fixed fee (some start at $25,000) for a sales letter or Web-based sales page, and get a percentage of sales in addition to that. Their clients are glad to pay for good writing because they know it will generate sales. PR people could take a lesson from how these writers set expectations, beginning with dropping the “free vs. paid” nonsense.

    Jim Bowman – The PR Doc®

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    1. Excellent suggestion, Doc. I’ll take two $25,000 fixed fees and call you in the morning!

      But seriously, your insights are always much appreciated!

      Best,
      Jules

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  2. Jules, we don’t know each other but we have a lot of mutual friends (Check LinkedIn). I am looking for someone of your talents to sell Websites, PPC, SEO, SEM and other website marketing services. I would love to talk to you about comming to work for us at Tribute Media. We have gone from 9 employees to 14 in the last month and have tripled our growth this year. This month has been the biggest sales month in our companies history. Matt 921-4242 or mlopez@tributemedia.com

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    1. Matt ~ I am flattered and tempted, as there happens to be a gorgeous pair of very expensive leather boots downtown that are just longing to be zipped up my calves and marched all over town, but as you may have noticed, unfortunately, I have no sales background. Email me if the starting base salary is near six figures. Congratulations on your company’s growth and if you need a PR person, please keep me in mind.

      Best Regards,
      Jules

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  3. The problem I have with these pay for placement arguments boils down to something very simple: Why should any client expect me to work for free? If my well-crafted press release generates clips, and I’m getting paid to pitch it and follow-up, why shouldn’t I also be paid for the work I did in writing it?

    I insist on getting paid for the work I do in preparing material for release. Targeted media outlets–and even specifically targeted persons–might not run a submitted press release, media advisory, VNR, actuality, PSA or other material for any number of reasons. Thus, payment for placement would put every PR professional’s work—and income—at the mercy of individual whim. (Not to mention long lead times—how is a parent supposed to put bread on the table if payment doesn’t come until half a year later?) Clients should never expect to get work done for free, and any client that only wants to pay me for placements is trying to cheat me for the hours of work I have done.

    When potential clients say they want to pay only fixed fees for fixed results, well, I already provide fixed results worth paying for, because I have separate project-rate fees for every client deliverable, whether it be producing a comprehensive PR plan, media-interview training, crafting a press release, a PSA, VNR, actuality, etc. Every product the client orders from me is a fixed result once I deliver it.

    Clippings, however, are not deliverables, since they are not generated by the practitioner herself—they are merely evidence of a well-crafted deliverable having a successful impact. Clippings may be a PR objective, but they can’t be a deliverable.

    As a solo professional, I offer a la carte project rates to potential clients, who can select what they want (and can afford) from a menu, as it were, of available options I outline for them after meeting with them and assessing their needs. I always highlight particular recommendations that I feel are the most necessary for the client’s success in a particular situation, but clients often pick and choose specific deliverables. Almost every client opts for a press release (or multiple releases, based on how many newsworthy potential stories I indicate can be pitched), because their conception of PR is pure publicity.

    Since a press release is merely a single step in a publicity campaign, I also offer separate packages for pitching & follow-up—which is, after all, where the real skill lies in scoring placements.

    I establish benchmarks for deliverables with every client; I don’t get paid if I don’t provide the deliverables. To allay any concerns they may have about whether my contract is a good fit, I point out my mutual no-cause cancellation clause, with 30 day’s notice (albeit with kill fees so I don’t lose money for work already begun that is canceled).

    As most of us know, the number of clips a client’s story generates is often less important than where that story appears and which audiences are exposed to it. I’ve always felt the secret of media-placement success is selecting the proper media outlet, understanding how the proposed story fits with the outlet, and knowing how to pitch it to the targeted individual.

    Given how many potential clients are still fixated on publicity, we all obviously need to do a better job educating clients about what a broad-spectrum PR campaign can accomplish—in all areas, and not from just the narrow perspective of clippings. If potential clients have been disappointed by lackluster PR performance, it probably has more to do with a PR firm which did not properly manage unrealistic client expectations. Every practitioner needs to define what will constitute success with each client, and that requires a clear outlining of the measurable ROI. (For a detailed list of how PR pros can measure their ROI, see my LinkedIn comment at http://tinyurl.com/yfxnh99 .)

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    1. Steven ~ Right on! My favorite part is where you said: we need to do a better job educating clients about what a broad-spectrum PR campaign can accomplish! Amen. But we all keep preaching to the choir. I think the PR Industry (and I have suggested this to my local group) needs to be a much better job educating business leaders en masse. Thank you for your thoughtful feedback.
      Best,
      Jules

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  4. It can be a hard lesson to learn but sometimes a girl just has to say no to clients who don’t respect them.

    We have a retail hourly rate and use that to determine per project and retainer fees. All of our clients are on retainer now, which helps both us and them budget (time and money). I don’t think a retainer arrangement works through unless the provider has a reputation for providing exceptional service for a reasonable fee.

    I find that comparing our professional communication services to those performed by a lawyer or accountant generally explains things. But I’m still floored that there remain so many prospective clients who tell me they have no money and expect me to work for free.

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    1. Thanks, Kris! I have often assumed, incorrectly, apparently, that the great coverage I had earned (i.e. worked many hours to secure) for previous clients would be taken into consideration when discussing fees (retainer, per project, or otherwise). I have great references and have garnered major coverage for clients, so I am still surprised when clients act as if they are going to be left high and dry with nothing to show for their money. I do not argue with them, but it’s not as if I have never done this before!

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  5. Jules – so great to meet you and thank you for forwarding this post in response to my Twitter rant of why people think I should do their marketing for free. I have moved Todd’s quote into my BlackBerry for a rainy day and bookmarked this post in my delicious account (marked Private, of course, so the people I’m referring to don’t see it). Looking forward to more nuggets of Jule’s wisdom on Twitter, too!

    TRISH

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  6. You know my favorite part of the “pay for play” PR concept: the fact that most of the clients that ask for it could never afford to pay you the amount you are owed if you get them the coverage. We offered to do the media equivalency rate for placement when someone asked us for this model – the kicker: I told them they’d have to put $50K into a deposit account just like we do on our sourcing side, so that we have safety in payment. That didn’t fly. But it did prove a point. If they can’t afford say a $7,500/month retainer right now, then how will they pay any of us the $120K they would owe us if we landed them, say Today Show multiple segment series?

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    1. I know! My new first question is what is your budget. That ends the conversation pretty fast. But, why, why, why, I keep asking myself are there actual companies with zero marketing budget? It just doesn’t compute!

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  7. Excellent discussion. I would like to see some seminars and workshops for us in the PR Industry that discusses how to set fees, what current rates are in various segments based on location, how to price out “social marketing” as a tactic, instead of all these webinars telling us we need to use social marketing. Yeah, great. Now, how do you market it to the client?

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    1. You know Gary, I have a feeling I am going to be saying this until I am blue in the face, but here goes (again): The PR industry has done a terrific job leading itself, training it’s members, and the like. It’s the rest of the world that needs to be educated. We need to stop sitting around and discussing PR with other PR folks and start educating business en masse. In my professional career, one in four company CEOs, small business owners or corporate leaders even understand PR, let alone overwhelmingly support paying for it. Why? Because we have not done a good enough job explaining what we do and why. ROI is fuzzy, metrics are messy and then one vlog goes viral and they all think they don’t need us.

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      1. Yes, zgroupr, I wholeheartedly agree. I cannot tell you how many times in my career I have had to explain that pr is not just news releases and media relations. My soapbox is that “advertising is a tactic. PR is a strategy” and that it is all Public Relations. Most give me that “deer caught in the headlights look” then say something like, “so, you mean publicity?”

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  8. Oh my G! Finally someone is talking a language I can understand! I’ve been a solo/somewhat solo PR practitioner for about 25 years and the stories I’ve heard from prospects about how they want to pay are unbelievable. My current dilemma – in these tough times – how far do we bend? I have a client who refuses to increase a tiny budget until we get some “Big” hits, but without the budget increase we are completely hamstrung. Should I bite the bullet and just do what it takes or tell them to take a hike and pray to the PR gods that by being true to my business the universe will reward me with big paying clients?

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    1. Pamela ~ Thanks for your comments. Glad to have your feedback. I am not rich, so maybe don’t take my advice, but I always have either a per-project fee, monthly fee, or hourly rate set up ahead of time for each client. Then that’s it – period. If they don’t pay, then I don’t work. During the “interview” process, I try to assess the potential for coverage and if there is very little or their potential is much less than what they perceive it to be, then I might pass, but I also let them know why I am passing. I always try to educate clients on the realities, but I have lost potential clients who wanted big coverage from day one (and unfortunately, no story to earn such coverage). As an industry, we need to get out to business leaders more and give them a general education on what PR does for their business and show the value & ROI.

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  9. Excellent article with a great point of view, Jules. Here’s something from the non-PR side: I run into this a lot as well. Even for something as routine as tax preparation, clients want to see a “product”-hold it in their hands, so to speak-before they percieve value. I can place numbers on tax forms all day long but I can’t (won’t, and am not permitted by my licensing standards to) guarantee a refund. But you better believe that a refund-or no tax liability-is my goal for my clients, and I will do anything in my power to get them the most deductions and credits they are entitled to in order to reach that goal. Should they pay me for all the time it takes to research their tax situation, even if the end result is that a particular deduction or credit doesn’t apply to them currently (but might in the future)? You betcha! Do I tell them ahead of time I will have to do some research and about how much time I think it should take? Of course. Do I explain to them that there are choices and alternatives to receiving the largest refund or paying the least amount of tax *this year* in order to get the largest refund or pay the least tax overall-over the course of years-or to receive some other financial benefit? Certainly-every CPA should. Do my clients think there is value in this discussion? Yes, mostly, but so many aren’t used to receiving this type of information, they aren’t used to paying for it. Educating them about the value of proper planning-whether a PR campaign or a tax strategy-is what is needed. Yes, preaching to the choir I am.

    For the ones who are hung up on price, I say, “Take it to the tax factory, and when you have paid them several hundred dollars and don’t think they did the best job for you, come back & see me.” (Or do it yourself-you get what you pay for.) The repairs/refiling-and the education about proper planning-begins again.

    On another note: how can a business be so arragant to think that just because they have a product or service to sell that customers will come flocking to them out of the blue? All businesses that want to grow have to have some sort of plan to make it happen-and adverts, PR, marketing, etc. is the best way to let others know you have something they want or need, or that yours is something special (How will customers know if you dont TELL them??? Oh, yeah: they’re mind-readers. Not.). And they have to pay for that promotion of their product or service-or do it all themselves. Spend time or spend money.

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    1. So right on Laura! I tell people, there is no such a thing as “free” PR – even if you do it yourself and you’re like most business people, time is money. Professional services and intellectual property create value and those who are responsible for communicating their value should communicate the way you do. Everyone should charge what their efforts are worth and not trade dollars for hours.

      Thanks for visiting! ~ Jules

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  10. I received the following response to this blog today and I was reminded that this is still such an issues in PR.

    Hi Jules – I was recently asked to for a PPP proposal. My gut told me this was a terrible idea, feeling as though it undermines my ability and shows lack of respect for my professional services. I then came across your article from 2009 and wanted to thank you for your thoughts and the stream of comments from other PR professionals on the thread. It has confirmed my decision to know I’m doing the right thing in politely declining unless they consider another approach. ~ JM (comments sent via email)

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