With pay per placement, clients only pay the PR firm when they get publicity. Fees are often based on a percentage of what the client would have spent for comparable advertising exposure. For example, the PR firm might charge 25% of what it would cost to run a full-page ad in a magazine if the client receives a one-page feature article.
Traditionally, PR firms have charged a monthly retainer. That means clients pay the monthly fee—usually in the thousands of dollars—every month, whether or not the PR firm has gotten any results. Often, there is a minimum commitment of six months or more.
Spending thousands of dollars a month is scary, especially when there is no guarantee that there will be any media coverage to show for it. When a firm comes along offering to charge only for the media placements they get, it can look awfully attractive. But is it really?
The obvious advantage of pay per placement is that if you do not get any publicity, you do not spend any money. There are some disadvantages, though, that may not seem obvious at first.
What you get for the monthly retainer is a firm actively working for you. That means that they are looking for opportunities to pitch you all the time. When the firm is being paid by the placement, they can not afford to be building campaigns and actively pitching you in any coordinated way. It is more likely that they will simply try to match clients to publicity opportunities they uncover. When you get publicity, it can be scattershot, rather than as part of a planned campaign implemented over time.
Here is one that often surprises PR clients: Pay per placement can be more expensive. Because of the way fees are set, getting one national feature can end up costing more than months of having a PR firm on retainer. Retainers are usually based on the hourly rates of the staff working on the client’s account. Pay per placement has no relationship to the time the PR firm spends working for you. They may learn about an opportunity for a national TV feature, pitch a few of their clients and have one used in the story. Total time: maybe a few hours. Total fees: probably in the thousands.
If you are conducting regular PR campaigns in-house, supplementing them with a pay per placement deal with an outside firm might be a good choice. That means that you regularly send out press releases, seek out publicity opportunities, and follow up with the media contacts you have cultivated, only using the PR firm for the occasional hit that you would not have found on your own. However, if you will only get publicity based on the efforts of a PR firm, a pay per placement arrangement may make you a one-hit wonder rather than a long-term success.