For eons public relations agencies worldwide have searched for the client which will pay them with a regular instalment. From a purely financial point of view, this makes eminent sense. A retainer rewards your business with money in, and money out. Salaries get paid as does the electricity bill. You can predict what’s around the next corner. It frees you up to think only of the needs of your client. Or does it?
In return for the PR’s endless search for the retainer, there is the endless level of debate from clients about “am I getting my money’s worth?”. PR agencies can, and do, sit around getting sloppy and lazy knowing that the bills are sorted till the end of the year, and they should only put in a flurry of excitement around contract renewal.
As a result the need to drive a client’s dollar further is not lost on a lot of agencies. Although it’s not yet taken off in Australia to any great degree, the fee-per-clip concept has increased in response. Sold mainly in the US as ‘risk free’, the fee-per-clip idea is that media clips are delivered or else the client doesn’t pay. It’s a so-called painless way of seeing your item in print, online, on TV – and then you happily pay the bill. Paying for performance on the face of it sounds great for the client. They get reams of media clips delivered, and they only pay up once it appears. Or do they?
Pardon me for thinking this sounds all a little optimistic and short sighted. It may not be considering the longer term where brands and reputations are built, formed and tested by customers. Flinging out press releases into the wide blue yonder without regard, hoping they will be picked up – regardless of whether it’s The Economist or the Upper Malarky Times with a readership of 4 – can only damage the longer term customer perception of a brand. It’s also unlikely to deliver the strategic results, i.e. sales, that clients are seeking.
Also in the US, models such as reverse auctions have started to appear. Reverse auctions are in effect meant to push down the PR agency’s hourly rate. But as we all know, it is the best clients who don’t pick by price. The best clients are the ones who choose us because of our insight, our planning, our creative concepts and our ability to evaluate the effectiveness of our concepts against their business.
So what’s your choice going to be? Hand over all your cash to the agency, cross your fingers and hope? Or pump out information to increasingly jaded audiences and hope that they are reading both The Economist and the Upper Malarky Times? Or find a third way.
Posted by Justin Flaherty, MD, Horizon Communication Group
Filed under: public relations | Tagged: Horizon Communication, Justin Flaherty, media, pay for performance, pay per clip, project, public relations, retainer
