How should you pay for PR?
28th September 2016
Paying for PR services is not as straightforward as it should be, and one word that consistently crops up in our discussions about payment is ‘transparency’. In short, PR and marketing agencies should keep their pricing structure as simple as possible and be open about it.
One agency that is clear about its charges is Holyrood PR. Co-founder Scott Douglas explains: “Since 2012 we’ve published our charges prominently on our website, explaining the difference in our rates for those who commit to long-term contracts and those who prefer to work on a project-by-project basis.” But it seems that Holyrood is unusual. Douglas adds: “What surprised us was that we couldn't find any other firms among our competitors who did the same. So, we carry out an annual check on around 70 reputable PR agencies. We have been unable to find any which publish their rates online.”
The PRCA tries to help agencies be fair in their charging structure by providing agency remuneration guidelines. Francis Ingham, director general of the PRCA, says that agencies are struggling to keep up with new systems and ways of measurement: “The industry is rapidly modernising and there needs to more innovation in billing models used by agencies – especially when the over-servicing rate is at 19%.
“Better measurement systems are fundamental to innovation of the PR and communications agency business model – something that currently remains a work in progress.”
Ingham says that another factor is the increased prevalence of project work. “Our Consultancy Benchmarking in 2016 revealed that over 41% of agencies were charging for project work. In light of this trend, the industry needs to assess whether current business models and measurement practices are appropriate.”
How we charge
Rebecca Wagstaffe, business development director at communications agency 3 Monkeys Zeno: “Retainers are essential for clients if they want an always-on service, a consistent team and particularly if the consultancy is managing media and influencer relations. They also allow agencies to properly resource an account with the right level of skill and experience. Reputable agencies strive for fee levels that match what we deliver. Despite that, over-servicing is still rife in the industry. At 3MZ, we are completely transparent, agree clear, measurable upfront KPIs against agreed fee structures that both the client and agency sign off against.
“No one likes surprises – clients OR agencies – so we couple this approach with regular reviews as part of the ongoing conversation around the health of the account so everyone knows the value of what we deliver for our clients and what they are paying for."
James Ashlee, finance manager at marketing agency Kindred: “There is no one-size-fits-all-approach for agencies when it comes to charging for their services. It’s often very much dependent on the nature of the work required, ie, whether it’s just a one-off project or a larger ongoing and multi-faceted campaign. If, for example, an ongoing press office function is required and the client doesn’t have an in-house team manning this on a daily basis, then a retainer is a sensible option. Ultimately, as long as agencies are as transparent as they can be, it shouldn’t matter what the method of payment is.
“As an agency, we work with public, private and third-sector clients. Transparency and openness are vital elements of all of these working relationships. After all, clients in every setting are accountable: whether to their shareholders, their funders or the public, and expect their agencies to respect this and respond accordingly.
“Above all, the client-agency relationship should be a two-way street. It’s equally important for clients to set realistic budget break downs and a clear scope of work from the outset so that in return agencies can provide a service that maximises and makes the best use of a client budget.”
Scott Douglas, Holyrood PR: “We have always had a simple pricing structure which ensures every client knows what they are paying and what they can expect for those fees, whilst reassuring them that other clients pay the same rate.
“We've had numerous clients and potential clients advise us that public relations and marketing has been off-putting to them, because of a lack of transparency on pricing. That is something we can understand. After all, as well as being in business, we are also consumers and we want the price we pay for goods and services to be clear and up-front from the outset.”
Jill Hawkins, director at agency Aniseed PR: “I believe in a partnership approach so I'm very transparent. I quote a day rate and then estimate how many days a project would take, or how many days per month for an ongoing retainer.”
To keep clients happy, and simply to be fair, it always comes back to that word “transparency”. PRCA’s Ingham concludes: “Transparency is at the crux of any good client/agency relationship, which is why the negotiation process must be open and fair from the very beginning. We also encourage agencies to review their remuneration models regularly to make sure they are up-to-date. Essentially, agencies must ensure their remuneration models are simple and flexible and it may be the case that agencies use different models for different clients.”