How Much Does PR Cost

Right now — when the PR business is absolutely booming — most smaller New York City PR firms are starting new clients at $7,500 - $15,000 per month or more for staff time, for ongoing programs. If they charge less, they are using the account as a training ground for zero-experience staffers. Manhattan firms charging only $5,000 a month are in special situations: they want to break into a new area, or they must replace an account just lost, or they feel the account will be particularly easy to handle or narrow in scope.

PR firms are like most accounting, consulting and law firms in that we all sell time. The gross income from staff time fees has to be high enough to cover salaries, overhead and profit if the firm is to stay in business. And direct out-of-pockets such as long-distance phone and fax have to be reimbursed.

Traditionally, service businesses require that their salaried account staff handle fees at least three times their salary. So a $30,000 account executive must produce enough results to satisfy clients paying $90,000. Many firms have increased that ratio to four or more.

Put another way, if a client is paying for a $60,000 one-year program, the PR firm is providing staff time worth a third of that or $20,000 in salary.

And don’t forget out-of-pockets because they can easily run to 12 - 15% of staff time costs.

Also, is one firm’s service equal to another’s even when the monthly staff time fees are identical? Of course not (just as two architects won’t produce the same results). There will be differences in the mix of time by higher- and lower-level people; in writing and placement skills; in organization and management. A good PR firm will give you the optimal combination of talent, which will maximize productivity for your fees.

Why PR Firms Are in Such Demand

We haven’t taken an actual survey, but we gather that all the Internet and related companies rightly believe they need publicity — to gain business, to attract partners, and to increase corporate value for investors and their IPO.

Venture capitalists know that greater awareness — among prospective customers, partners, and the next round of investors — is mandatory. These audiences read the trade and business magazines and monitor on-line conversation — and companies that aren’t covered there are hardly in business.

Even the technology-dominated firms — those with hardly a whiff of marketing expertise in their management — are finally realizing that building better mousetraps doesn’t suffice. Incidentally, the entry of such companies into the PR world can be treacherous unless they get a firm that understands their special needs.

How to Differentiate Among PR Firms

Experience, experience, experience. The PR staff working on your account must grasp your business and your media immediately.

Repeat: Not the agency principals — they can talk their way into anything — but the people who will be writing your material and pitching it to working reporters; they’re the staff you have to evaluate.

Within “experience,” we include creativity and caring. Is the PR firm going to give you a stream of new ideas? Does the owner really want your business? Does the firm have the experience to appreciate what it doesn’t know and has to learn; what its weaknesses might be and how to overcome them?

To choose a PR firm, you have to determine what you want in a firm, how you will measure their performance, how their experience translates to your specific needs, and what you will get for your money. A good firm will help you understand these issues.

As in any business relationship, you and your firm need good chemistry. You have to be able to disagree easily (the last thing you want is a “yes man”). And you have to enjoy working together.

You learn which firm best serves your interests by talking to their current clients and your prospective account team.

How to Get the Most for Your PR Dollar

If you want more from your publicity program,be sure that your PR team:

(a) knows your PR and business objectives; (b) receives continual updating on your developments (has frequent meetings with you); (c) keeps placing fresh material with at least your “A list” reporters; (d) always has feature coverage (as opposed to “news” stories) in progress; (e) gives you a monthly scorecard of results and progress.

Some things you can do to improve your program:

1) re-examine your tiered media list; 2) meet the media; 3) get another person’s view of your written publicity materials (Is the news up front? Are releases easily understood by cub reporters? Can releases be used without time-consuming rewriting?); 4) add simple diagrams,schematics and other illustrations so reporters grasp your message instantly (they may toss away difficult stories because they have many easy-to-use stories from prominent companies).

Publicity writing should do double-duty (even though different styles may be required). Releases, articles, speeches, presentations, sales and press kits, and selling materials all have overlapping information. The same people should be writing them and arranging speaking engagements for your top executives as well.

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