I was finishing my cold coffee and had eaten half my Danish as the taxi pulled up to unit H6 in the industrial park. I had just come from the San Diego airport after taking an o-dark-thirty morning flight. Not seeing a company sign I took a chance and entered the fading tinted glass door. No receptionist or front desk was there to welcome me, but shipping stickers on stacks of boxes told me I was in the right place.
As I surveyed their bare necessity workspace, a slow sinking feeling settled in: I correctly suspected that they had no money. I had a pile of client work back at the office, and the agency’s president had sent me on this new business wild goose chase.
After a few minutes of exploring I found the prospective clients — a group of very nice, smart engineers. I quickly learned that they had no marketing people with experience on staff, though one of them was the “VP of Marketing.” …Sigh, high tech, the land of failed engineers who are now failed marketers, but I digress.
Ensconced in a makeshift conference room, and with the preliminaries out of the way, it happened. The vice president paused, looked at me and said, “We don’t have a lot of money, and we don’t want to work on a fixed monthly budget. We want to pay based on press coverage you get for our company and products. That is the only way we will hire you. We have talked about it, and we feel strongly that is the way we want to go. Is that going to be a problem?”
Trying to appear thoughtful, and mustering all the sincerity I could, I said, “Not a problem. In fact, I want to get started right away. Let’s take your CEO out to the parking lot and have you shoot him. We will get mountains of coverage for your company. I’ll achieve your coverage goals and use up your annual budget in the next few weeks guaranteed. Who’s got a gun?” The room fell silent. That was ten years ago.
Last week a talented marketing communications colleague contacted me. Her clients wanted to hire a public relations agency on a pay for coverage arrangement, and she asked if I had ever heard of such a thing before. …Why yes, yes I have!
Working in high tech I have heard this idea suggested a lot over the years. Usually by engineer CEOs or start-ups who do not understand the role of PR in the marketing mix.
Would it makes sense to pay a software engineer more for each lines of code she wrote without taking into account if the program worked? How about paying a CEO on how many units the company sold, regardless of profits or long-term growth considerations?
A company’s reputation, and the management of that reputation, is complex to measure. So, I understand the attraction to oversimplify the process by focusing on a few of its shiny parts, but it is deeply misguided because it rewards the wrong thing.
A company’s PR goals, like all of their communications efforts, should be building brand loyalty and preference, shortening the sales cycle, and becoming the customer’s preferred provider by effectively addressing their greatest needs, i.e., their pain. These are all on-target goals worth measuring.
I’m sure there are a few agencies and PR people who will bill by placement. Unfortunately, their client gets what they deserve. The agency will focus on low hanging fruit and meaningless press mentions. Therefore, the money is wasted since this rewards tactical outcome instead of crafting meaningful messages and shaping positive perceptions of the client’s company and product.
All companies undertaking a public relations program can, and should, measure tactical execution against plan, tactical outcomes, message penetration, moving opinion indicators, stock price, new customers, and revenue, to name a few metrics.
However, for a company that has a less mature marketing culture PR may not be the best way for them to spend money. Guerrilla marketing aside, public relations is absolutely a big dog in the tall grass activity. If a company doesn’t have the money to sufficiently fund public relations, they shouldn’t do it.
Instead, I would use their budget to hire a few great writers to create customer-targeted, journalist-quality content in the form of white papers, blogs, articles, and case studies every month. Then promote them using search engine optimization and pay-per-click advertising. Lots of analytics for the company, and tons of valuable market intelligence generated on what customers respond to.
What happened with that new business pitch in San Diego? I went on to explain to them what PR could do, how together we would measure and manage the process, and what the monthly budget would be if they wanted to work with the agency.
They became a client, and their 45-person company was later acquired for $175 million buyout after a fierce bidding war. The CEO directly attributed the bidding war to the resulting buzz we generated, and to our repositioning of the company in the press and with analysts.
I don’t think his VP ever told the CEO about my original PR strategy….
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