The trouble with pay-by-results PR

In a recent interview with IT Business Pipeline, Media Relations CEO Larry Kocina took aim at billable hours and suggested a model whereby clients are billed for each interview set up with a journalist.


would appear that Mr Kocina, like many others, has fallen into that classic ‘PR trap’… the failure to recognize that public relations is not publicity. Public relations is much, much more.

In trying to equate an outsourced service such as PR with tangible product offerings, Mr Kocina is comparing apples with oranges.

Creating messaging that is consistent across all aspects of marketing a company is critical to developing meaningful brand awareness, exposure and customer loyalty. And dovetailing this messaging with other aspects of integrated marketing communications — such as media relations, corporate communications (including internal and crisis), marketing collateral, sponsorship and philanthropic initiatives, direct (Web, e-mail, referral and traditional) marketing, advertising, and even investor relations — requires strategic planning and well devised tactical implementations.

The entire concept of ‘Payment By Results’ (PBR) — or its kissing cousin ‘Performance Based Compensation’ (PBC) — assumes that the company hiring the agency to help it with PR/Publicity actually has a workable, long-term marketing and communications plan that is directly tied in to the business plan, and that it has a fully developed suite of messages specifically tailored to key audiences and key stakeholders. Guess what? Most don’t.

It is important to recognize some of the risks that arise with PBR:

To the client:

Do you want quantity or quality?

PBR has a limited capacity for creative and/or strategic involvement. By focussing wholly on results (quantity), PBR agencies simply cannot afford to spend too much time developing truly unique or tight messaging for their clients (quality). What ends up happening is that these agencies use ‘cookie-cutter’ solutions, not always in the best interest of the client.

To the agency:

PBR devalues an agency’s top strategic and creative thinkers, and, to put it bluntly, encourages slapdash communications. It no longer matters if the creative team comes up with the BEST idea, only that they can come up with lots and lots. It no longer matters if the strategic planning team develops the best plan to put the client’s message in front of the best audience, only that they can get the client’s message in front of as many people as possible.

And what if the media opportunities are secured by the agency, but the client can’t ‘complete the transaction’ for whatever reason? Should the agency just take a bath for all the hours put in to secure the opportunity?

How different is this from those pushy sales reps that are on commission-only? There’s a reason why successful tech companies like IBM and HP have salaried sales reps — to avoid the bad PR caused by those self-same pushy commission-only sales reps.

PR has its own issues. The problem with traditional PR is two-fold: 1) Not enough people take the time to understand what PR really is and how it can be effectively incorporated into an overall marketing communications plan; 2) Many agencies don’t do a good enough job of educating their clients on what is involved in PR, nor do they adequately report their activities in a way that reflects the communications plan.

If more agencies would spend time and effort educating their clients on the processes and true value of a quality PR program, PBR would drop off the radar screen, at least in those cases where cohesive strategic thinking is required. Agencies would get fair compensation for their work and clients would reap the rewards in terms of brand awareness, exposure, customer loyalty and profitability.

[email protected]

Jack Wojcicki is a freelance PR practitioner and is PR Counsel for HWB Marketing Communications Inc.

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