Is it wrong for a PR firm to forego a monthly retainer, and charge its clients only when it succeeds in getting them mentioned by the media?
Does it make a difference if the PR firm is doing this to help startups shy on capital?
What about if the PR firm has put specific price tags on particular media outlets?
These are the questions that public relations professionals, their clients, tech bloggers and their readers have been grappling with in the wake of yesterday’s announcement by TechCrunch Co-Editor Alexia Tsotsis of a blog-wide ban on PR company PRserve, following her discovery that the firm had been charging clients $750 for getting them covered by an “A-level blog like TechCrunch.”
Chris Barrett, the Founder of PRserve, responded by posting a notice on the company’s website in which he claimed to be “confounded” by the situation. “The only difference between how we share stories and the way a traditional PR firm works is that we do not charge a $5,000 monthly retainer, irrespective of results. We only collect an extremely modest amount for successful stories (a flat rate of $425 - $750 per story), depending on the media outlet,” he wrote.
The man has a point. It is true that promising startups do not all have pocketbooks brimming with cash, and that “by the pound” PR is a clever way for these companies to benefit from the services of public relations experts without breaking the bank. And as The Next Web’s Martin Bryant explains, it is not uncommon for PR firms to charge their clients for mentions on blogs like TechCrunch alongside the monthly retainer. Thus, what could possibly be unethical about PRserve’s decision to rely only on the former and do without the latter?
For journalists and bloggers, however, it is easy to see how any “performance-based business model”—with or without retainer— can be compromising. Picture yourself in their moccasins: it’s a quiet Wednesday, and you’re trying to decide what to write about. Then arrives a phone call or email from your friendly neighbourhood PR representative working on behalf of a tech startup. Finding yourself piqued by the app/gadget/whathaveyou that he/she is pitching, you arrange an interview. Several hours later, you learn that your story caused $750 to change hands. Wouldn’t you want to take a shower?
Beyond banning TechCrunch journalists from hearing any more pitches from PRserve, Tsotsis has called for startups who paid the firm to get featured on TechCrunch to ask for their money back, and failing that, has offered to refund the cash from her own pocket. Next time you want to get featured on our blog, she advises, reach out to our writers directly. For both the startup and the journalist, this arrangement makes sense.
As for PR companies trying to figure out the best business plan, Bryant offers a slightly facetious word of wisdom: charge your clients however you like – “just don’t tell us writers at tech blogs how much you’re charging, so we don’t feel like [harlots]. See? Everyone’s happy.”
Image courtesy of ryanmshia via Flickr Creative Commons