By Alan Graner
DISCLOSURE: Daly-Swartz Public Relations uses the retainer system for our clients.
How PFP views traditional PR
According to the PFP model, traditional PR firms charge a monthly retainer that covers a specific number of billable hours.
All billable hours are not equal, however. A principal’s time could cost upwards of $500 an hour while a junior account executive might only be billed at $50 an hour. Therefore, it’s in the public relations firm’s interest to include as many low-billable personnel as possible on any project.
Do the math. Twenty billable hours at $50 equals $1,000. If the retainer is $6,000 a month and the agency only expends $1,000 in costs, they make a cool $5,000 in profit.
Moreover, billable hours also include long, often unnecessary meetings; lengthy debates over strategy; coffee breaks; bathroom breaks; cigarette break; perhaps playing golf with the client’s president and, if time permits, actually executing some tactics.
To be honest, there’s a little bit of truth in this.
Why PFP isn’t PR
With pay-for-performance there are no billable hours. You only pay for work that gets published.
Basically that’s media placement, not public relations.
The only research and analysis a PFP firm is required to do is determine the target audiences, the best media to reach them, and place the content.
Traditional PR firms do this as a matter of course.
More importantly, PR retainers include benefits PFP agencies don’t offer, including:
- Analyst relations
- Competitor analysis
- Crisis management
- Event planning
- Government relations
- Investor relations
- Product placements/reviews
- Relationship marketing (social media)
- Reputation management
- Sales support
- Speaking opportunities
- Third party endorsements
- Thought leadership
These are the types of high-ticket expenditures PFP companies dismiss as “wasteful.” Yet they are vital for any company seeking awareness, credibility and a positive reputation.
The reason pay-for-performance agencies can charge less is because they do less.
Alan Graner is Chief Creative Officer at Daly-Swartz Public Relations, an Orange County, CA business public relations and marketing content firm. For content that makes you stand out from the crowd, email Jeffrey Swartz at email@example.com. Or visit www.dsprel.com.