ChartMeasuring the value of startup public relations is a critical but challenging task (we wrote about this earlier here). Some common ideas for measuring performance are to base value on advertising equivalencies (with a “credibility” multiplier) or on the number of social shares, inbound links, and inbound leads. Another idea is performance-based PR, in which the client pays predetermined amounts for each placement.

Until we launched this program, our take on pay for performance PR was: “it will never work – for us or the client.” There simply appeared to be many more obstacles to success than opportunities for success.

But, in fact, we had no evidence that it wouldn’t work – not even anecdotal.

And what if it was a brave new world of opportunity for our client and for us? What if the landmines I expected were imaginary? Would we find ourselves asking all of our clients to move to a performance model?

Before answering, here’s some background on how we structured the performance PR program:

Performance Fees

Our client would pay a small monthly minimum or the value of all placements for that month, whichever was greater. It seemed a very clever and simple approach, and one that just might work.

Performance Measurement

We created a two-axis grid. One axis tiered publications based on reach and relevance, and the other tiered placements based on significance. We then assigned values to each box – a contributed article in a tier-one outlet would be worth $X, and a profile in a tier-three outlet worth $Y.

Results

To answer the question of whether we will be doing performance-based PR again, below is a rundown of our concerns going into the program – and how each one of them played out – for us and for our client.

Challenge #1: Is it fair to our other clients?

Our other clients are all on fixed retainers, and at levels higher than the minimum for this pilot program. It was only fair, then, that we would feel a more pressing need to be sure that those clients were getting the time and attention that they were paying for, which in turn meant that we may have less time to capitalize on the upside potential of the performance PR program.

Challenge #2: Does paying for placements create the right incentives?

There’s no doubt that PR firms need to do a better job measuring performance, but is putting a flat dollar amount on each placement the right way? Looking at the pricing grid, it becomes apparent that it undervalues the impact of the full range of services we offer – and that it could also encourage “busy work,” as opposed to the more substantial, longer term efforts required to build a great reputation over time.

Challenge #3: If we do performance PR, are we really just a hit machine?

Our best and most successful programs are those where our clients see us as more than a hit machine. Startups come to Propllr not just for hits, but also for communications strategy, positioning and messaging – and help with awards, speaking opportunities and so on. There’s no doubt PR firms often spend too much time planning, but moving to a hit-based structure goes too far in the other direction.

Challenge #4: Will we wind up negotiating price with each placement?

In our client’s defense, this one never came to pass, but it’s not hard to imagine a performance-based program in which each success was negotiated: the PR firm says a magazine is a tier one publication, the client says tier two; the PR firm says the article is a profile, the client says “yeah, but it had some negative comments as well.” So how do you charge for those? In so many cases, the result will be a relationship-damaging and distracting negotiation.

Bottom Line

I can’t say with 100 percent certainty that we will never do another performance-based PR program, but I simply don’t believe they make sense. And in any case, with just a few steps, companies can hack their own performance-based program:

1 – Limit contract length

No startup should be locked up to more than a 30-day contract. The money being spent on PR is too valuable to be misspent. With a 30-day contract, it is easy to “get out” – to either redirect resources or to find a better PR partner.

2 – Align PR with business objectives

Startups have very specific objectives – growth, recruiting, product rollouts, audience expansion, etc. Tying PR efforts to each objective will focus outreach and ensure that the results are in alignment with your business, thus maximizing performance.

3 – Communicate, communicate, communicate

Not all clients are the same, so PR firms shouldn’t treat them as such. If you want weekly updates, say so. If you want bulleted updates saved to Basecamp, say so. And communications should be a two-way street. Keep your PR firm in the loop just as you would other team members or investors. Let them feel the excitement (and even the stress) that you feel every day.

A rigid performance-based program, like the one described above, focuses on short-term “what have you done for me lately” work. This is a stark difference from the best PR programs, ones where investments are made not just for immediate impact, but for long term returns, as well.

Ultimately, we want our clients to see us not just as a source of PR hits, but as partner that can help them meet specific business objectives. And I have yet to find a rigid performance-based fee structure that I believe will do that.