Pondering Pay for Performance

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This is a guest post from Alison Kenney of KPR Communications.

Recently I met and won over a new client (thank you) but was surprised when presented with a contract that offered bonus payments for achieving media coverage (in addition to a decent monthly retainer). I instinctively turned to the #soloPR community and asked other PR veterans how they handle this situation. They didn’t let me down. As you may know, I posted the question on the SoloPR LinkedIn page and Kellye presented it during a recent Twitter chat. There was a good range of thought-provoking feedback:

A majority of chatters were offended by this “pay-to-play” approach, for ethical reasons:

@jgombita: A1: Wasn’t there some industry buzz a few years ago about an agency that “guaranteed” X number of media stories? Sounded dodgy.

@BevPayton: @MomonMars Yes, promising placement IS a violation of PRSA ethics policy. The only way to promise placement is to place an ad.

@erica_holloway: A1: I prefer following the Barcelona Principles to focus my efforts with full buy-in and measureable results.

Or because they thought it represented a lack of understanding of the value of PR:

@AmazingPRMaven: A1: Usually when those deals are offered, they don’t include a retainer, typically the offerer is ignorant of #pr workings

@KellyeCrane: A1: Many clients who want to pay only when X is met are cheapskates who don’t really value the time things take. Not all, but many.

@erica_holloway: @KellyeCrane Right, like expecting to lose 20 pounds after two months in the gym. Not reasonable.

@cidokogiPR: If someone wants to pay you a commission only for this type of job, they don’t value this type of job…

@3hatscomm: time IS money

@krisTK: A1: Would NASA build rocket only to go to moon? PR has better ways to evaluate results than clips, fans

And devalued the strategic role of PR especially:

@fransteps: A1: Placements are NOT measure of blding relationships & trust? Pay for play people don’t get that long term investment strategy

@farida_h: A1: Was asked for a social media project once – if I could get guarantee x followers – told them engagement more imp than numbers

@MomonMars: @PRjeff I think that’s a very short view of PR, which is more a long-term process

@dconconi: A1: pay for performance is also only related to media relations. We do so much more. How do they pay 4 strategy and counsel then?

@DebInATX: I think clients who only want to pay when X goal is met don’t understand the long term relationships necessary for PR

@karenswim: A1: It can also backfire by providing incentive around a tactic while diminishing long term strategy

@juphilpott: @karenswim Absolutely – why waste the effort planning a successful long-term strategy if client is only interested in end tactics.

Mark Buzan (via LinkedIn) I think the value of PR professionals is not in us becoming “pitch machines”. Instead, we are there to help craft and build reputations. For that to occur, it’s strategy before tactics. Perhaps that’s one of the reasons I don’t work with small biz 🙂

Colin Sanford (via LinkedIn) Agree with Mark here. The process of helping a company get straight on its messaging / strategy (which is a central part of pitching/planning) as valuable (and often more valuable) than the articles. I would avoid a “pay-for-performance” approach for all the reasons others have cited as well as the fact that it deepens the perception that all we provide is tactical support in coverage.

Or because they thought it would be a “slippery slope”:

Mark Buzan (via LinkedIn) I think you’re heading down a slippery slope if you start down that path. Often media coverage can result months after a pitch. Also, how much control do you generally have over the content written? What if it’s only a mention in passing or worse yet, something negative even after the best of efforts. There’s a lot out of the control of publicist’s realm in this area. What you need to be pushing instead is WHAT ACTION resulted as a result of the media coverage?

My two cents worth.

Joshua P. Romero, MA (via LinkedIn) I’ve worked at an agency where we had a “pay for performance” model. I didn’t like it because there were no qualifiers on the pricing, specific to the media type, circulation, range, etc. It was print/web, TV, and radio – that’s it. The pricing framework didn’t leave much room for editorial content that appeared via new media channels or online supplements to print or broadcast.
It sounds like what Regine is doing is best-case-scenario pricing for a pay for performance model.

@REDMEDIAPR: A1 DON’T work for free – too many factors like a press event that no one comes to bc of nat disaster news or Today seg gets bumped

@krisTK: A1: too many factors not in my control to consider “pay for performance”

But a few offered examples of how they’ve made it work:

Regine Nelson (via LinkedIn) I’ve had some success with “pay by performance.” However, generally I’ve restricted it to small businesses that need coverage for specific time frames, i.e the holidays or summer. In my opinion, this fee structure works when you a client wants to secure 20 media mentions or less.

In my practice, I offer this option to small businesses such as florists, retail boutiques, cupcakeries, etc. I design their press kit, develop a media list (no more than 15 outlets) and angles for a fair fee. Then I qualify each media opportunity, whether it be print or television. Each publication has a fee according to its circulation and range (local, national, regional). I only invoice the client once the story/mention appears.

Again, as Mark says it can be a slippery slope. You need to manage your time wisely and set goals and parameters with the client. The intention is to help them move sales and create a level of awareness for their product or service. Let me know if you have any more questions. I’d be happy to help – regine@allure-pr.com

@karenswim: A1: In a corporate environment it makes more sense but not as an indie biz owner

@PRjeff: A1: We should be results based. I say if you have a base, find a client w/great story to tell & commish is high enuf, y not?

Diane Pinnick (via LinkedIn) I did it only once. I warned my client he’d be paying more because I was good. He paid a lot more–end of story.

Joshua P. Romero, MA (via LinkedIn) Diane, that’s another great point to make. The price seems more affordable than a retainer, on the surface, but can get costly fast (especially for seasonal clients).

Our agency had a clause in the contract that media mentions made in outlets on the approved media list, within 30 days after the contract’s termination, would still be billed based on our efforts. That made for some interesting phone calls from the agency’s accounts department.

Julie Rogier (via LinkedIn) Just jumping in here – sounds like the consensus is we better serve clients with systematic programs and reputation management, and I agree. However, in niche PR (such as high tech marketing via case studies) I got my start writing Business to Business “case studies” that served multiple purposes besides a media placement – (i.e. content could be repurposed for brochures, direct mail, web, etc) With the client contract, I got paid for delivering the completed case study; and was then compensated for each time the material was published in key trade journals for a set period. This was a fair arrangement to both myself and the client. It’s a good way to start a relationship with a client, as well, to prove value on a per-project basis – then move the relationship to a more regular engagement.

I am impressed and appreciative of the feedback the #soloPR community offered. I discussed the issue with my client and tried to get a better understanding of why they wanted to work this way.

They told me they liked the model because it mirrored the way their sales team is compensated (base pay plus incentives) which is a model they like. I think they also felt unable to justify a large monthly retainer, like the ones they had paid bigger agencies in the past, without some “guarantee” that there would be results; they saw this model as a way to bridge that divide.

My situation isn’t as risky as some of the commenters may have assumed (the monthly retainer appears very fair) and I view the bonuses for media coverage as just that: bonuses. They are not affecting the strategic plan I’ll be creating for this client.

So, I agreed to try it. I’ll try to update this blog or other channels in the #soloPR community with our progress. What do you think?

With more than 15 years of PR consulting experience, Alison Kenney has worked with organizations spanning the technology, professional services and consumer industries. Alison spent the first half of her career at the leading high-tech PR firm The Weber Group, now Weber Shandwick, working with both globally recognized brands and dynamic startups in the technology industry.  She has spent the second half of her career at KPR Communications, putting those connections, lessons learned and experience gained to work for a range of technology, professional services and consumer organizations while serving as their outsourced PR director, virtual PR team member or general “PR Girl Friday.”

With more than 15 years of PR consulting experience, Alison Kenney has worked with organizations spanning the technology, professional services and consumer industries.

Alison spent the first half of her career at the leading high-tech PR firm The Weber Group, now Weber Shandwick, working with both globally recognized brands and dynamic startups in the technology industry.
She has spent the second half of her career at KPR Communications, putting those connections, lessons learned and experience gained to work for a range of technology, professional services and consumer organizations while serving as their outsourced PR director, virtual PR team member or general “PR Girl Friday.”

  • Like you, I have been watching the SoloPR twitter stream with much interest. I put out a poll and invited clients to weigh in on the different payment options. The result? While only 15% responded that a retainer arrangement would allow them to explore / expand their PR efforts, 23% indicated a pay for placement model – and 62% a combination of these two options would be beneficial.

    Each year, I take on a pro-bono project. This years’ recipient has agreed to complete a quite lengthy assessment to evaluate a “pay for play” pricing model which includes a base fee to cover the up-front costs of campaign development plus a fee associated with media placement. I am in the midst of implementing that campaign and will let you know the results.

  • Sounds very interesting – please do let us know how things play out. One thing I'd like to note is that clients are often very interested in a pay for play model, because in their mind it means they won't have to pay if they get less than stellar results. It also plays into many client's belief that PR and publicity are one and the same.

    I believe it's critical that anyone considering this conduct client education to counteract those misperceptions. Sounds like you're taking a methodical approach, so it will be interesting to see how the client reacts.

  • We have been following this stream of conversation and while we can address each and everyone of these concerns, the “pay for performance” model is built on the same PR principles listed throughout this conversation with the primary distinction being in the way we bill. The media portion of our program is based on results and only charged when we achieve those results. As every PR professional knows, you cannot attempt a campaign successfully without the research, strategic development and support that accompanies a successful launch.

    We don't bill hourly for those services and the client doesn't have to worry about a meter running when they have a question or need advice. This is covered under a small monthly program fee with the profitable source of revenue based on results achieved for the client.

    We don't promise that we can deliver coverage, (no one controls the media), and if they do promise this…then I would look really closely before diving into that relationship.

    Our average contract starts at 6-months to one year, and many of our clients have been with us for 3+ years. We are very media focused, but we also staff experts on traditional services as well and we partner with another firm for social media programs.

    Our model does not work for every client, but I think the most important message here is that you establish the relationship up front and what you will bring to the table in helping the client reach its overall goals and objectives. We prefer to walk away if we are not a fit and even suggest a referral if we know someone who can help the client.

    Deane-I believe you are on the right track with your p4p program. However, you may want to use the term “pay for performance” instead of “pay for play”. That term seems to be associated by many with payment to a journalist to write that story, which of course you do not. Love that you do pro-bono work!! I am very much involved in our pro-bono programs as well. Wish you great success with your client.

  • Thanks for sharing your approach, Cindy. Looks like you've thought through all the angles, which I'm sure is crucial to the success of this model. Curious: do you have performance metrics (on which you are paid) associated with the other services you provide?

  • I’m curious how…as the months have passed…this is working. My comment up above was based on your use of “pay for play” which has an entirely different meaning than “pay for placement.” I’ve also recently had a client approach me (with the same exact rationale, actually) on a p4placement structure. Can you share what you’ve learned so far?

  • Thanks for the question, @momonmars:disqus! I’ll ask Alison to provide us with an update (either here in the comments, or in a new post).

  • PRczar

    I have never worked with the pay-for-performance model. I may have an opportunity soon though that would be a retainer plus bonus for national placements. My question is how do you put a price tag on the bonus? Like someone else mentioned, it’s one thing to be mentioned in a national piece; it’s another to land a major feature story in a national publication. Thoughts?

  • TuckerdogNC

    I find the term “chatter” a little off-putting. These are reasonable, thoughtful arguments against PFP.

  • Hi TuckerdogNC- These comments were gathered during a Twitter chat, which is why they are referred to as “chatters.” Thanks for raising this issue in case others might also misunderstand!