Playing Catch-Up, Speaking Heresy, Opening the Gates of Hell…Etc., Etc.

My apologies for – again – engaging in drive-by blogging, particularly on a site I bear some responsibility for starting and keeping fresh.

For those interested in the why of my absence of late, see my last post (on June 23rd, for God’s sake) that had the net effect of giving my father yet another thing to worry about (face it, if I were related to you, you’d worry too) and a “Who give a damn?” moment to others. For everyone else, here’s the news:

First, and most important, there’s a new Pearl video. While not as funny as the Landlord, it’s still worth a view. Pearl has been my inspiration of late in reminding a couple of my clients of the effect that cash flow has on a small business (“You pay now, bitch!”). T-shirts are available.

Second, on the subject of His Par-ship, there is no better coverage of this subject than Brian Lambert’s blog in the Rake.

Next, everyone grab a seat, use your power tie or the belt to your Melly summer dress to anchor yourself to the chair, your world is apparently going to be rocked by the following heresy:

There’s nothing inherently wrong with the Media Relations Inc. model.

Truly.

Ever since I’ve started my own business, I’ve been struck by how much more clearly I’ve felt the connection between what I do and what I earn. The harder I work, the better the results I produce, the more I benefit. Some of that connection manifests as stress, but for the most part, I find it to be motivating and stimulating.

Like Tony, I too have used this “pay-for-play” with a client, a straight “I want coverage in X,Y and Z publications and I will pay A, B and C for success.” That worked out fine for both of us: they got coverage we both deemed satisfactory in X and Z and I got paid promptly the sum of A and C. I’d do it again under the right circumstances (see below).

With two others, I’ve used a variant of p-f-p that I find intriguing: “At the end of the project, I will tell you what I think it’s worth based on the amount of effort and the results achieved. You can then pay me a multiple of that amount based on your opinion of those factors; if you are less than completely satisfied, pay me the appropriate fraction, down to zero if warranted. If, on the other hand, I exceeded your expectations, pay the appropriate multiple.”

The first client I did this with paid 110% of the amount I pegged the value of the project. The jury’s out on #2 (which reminds me, time to send a note from Pearl). I really like this model, especially where one or both of us – consultant or client – are doing something outside our comfort zone.

Which brings me to the question of the “right circumstances” and this is where – I think – I part company with Lonny and his methods. When I do a pay-for-play it incorporates a pricing structure that is commensurate with the amount of work I’m going to put into the project to:

  • Understand the product, issue, company
  • Research the reporters, editors, publications I’ll be contacting
  • Customize a pitch for each to the extent necessary
  • Conduct the follow-up needed

I also spend some time negotiating exactly what constitutes success. In the one I did, it was interviews with the CEO of the client on a pending transaction in which the primary focus of the resulting article was the terms of the transaction and its benefits. The coverage had to be in the appropriate section of the publication and run within a certain time frame. No agreements on tone of the article, specific content (other than above), specific placement, etc.

I hit two of the three and the amount I was paid worked out to about what my hourly wage is these days. Pretty good batting average in most leagues. If I’d hit on all three I would have done quite well on an hourly basis. The point is I factored into my pricing on this project the real possibility that I would not get all three publications to respond. My prediction (to myself) was that I’d “probably” get 2 of the 3, “might” get 1 or all 3 and was “unlikely” to fan on all three. I puts down my money and I takes my chances.

I hope Lonny is still monitoring this site and can be tempted away from his pitching to continue the discussion because what follows is NOT based on having worked there, not having used them, not even visiting their web site, so I stand ready to proven wrong: Judging from the buzz around his shop, I think Lonny is making money on volume, not on craftwork. Even allowing for the “turn up your noses” factor in our business, MRI sounds like a mill where the “right circumstances” above aren’t much in evidence. Hell, even their own marketing materials (the e-mail quoted in the thread) suggest this.

Again, however, I invite Lonny to add to the conversation on these points and correct my misapprehensions. But, if you come, bring some real protein for us to chew on: real clients, real results, real tactics that we can verify. How much do your folks get paid, what do they get for scoring a positive a-hed in the Journal versus “On the Move” in the Twin Cities Business Journal? Do you get paid by mention or is there a qualitative aspect to the scoring system? How much does the house (you) get?

Same too if there are any employees, clients or reporters who have experienced the Media Relations Inc. product from their perspective.

OK, that was the heresy, here’s where we pry open the gates of Hell and unleash their dark forces:

I think big PR firms would benefit from adopting compensation schemes that put some of their fees at risk. Not just upside agreements, downsides as well.

And, just to make sure the hinges are snapped right off:

I think the principle should be extended down to the individual employee level.

Lonny’s best marketing tactic against traditional PR agencies are that we’re afraid to put it out there and be accountable for results. I think we should neutralize that argument by structuring compensation agreements that – at least where the media relations portion is involved – incorporate pay-for-play elements. We should be able to do this in a rational way; don’t we know our business well enough to account for the potential risks and rewards?

And, let’s share the wealth (and the risk) with – gasp – the employees. Under those right circumstances listed above, what’s inherently wrong with basing some of an account team’s compensation on achieving a certain level of media placements? “Here’s what we stand to make, lads and lassies, if we land this sort of coverage in these sorts of publications.” “Here’s what we stand to lose if we fail to bat above X.”

I’m willing to bet that if you structured it right, you get some highly motivated account teams and lots of accountability. Ask your average AAE about how it would be to find an extra $250 in the bi-weekly pay envelope for helping land four quality placements. Ditto the VP only she gets $1000 because she bears more responsibility and acountability. Similarly, if everybody’s paycheck gets docked 5 percent (10 percent for the VP) because we didn’t make a tactical goal in media placements, you can bet there’s going to be some effort spent to fix whatever isn’t working.

Who knows; we might even get a few senior PR practitioners to pick up the phone to pitch something other than lunch to a reporter. It also means the account team is going to be highly motivated to work as a team rather than as an inverted pyramid in which the junior people are disconnected from the strategic issues and the senior people are ignorant of the tactical level.

Just to be clear, I’m talking about compensation scheme based on sharing meaningful money here, not a $25 gift card. What’s a positive story in the Star Tribune worth to a company with an image problem in the Twin Cities? $10,000? Depends on the company and the problem, but probably. I’ve seen market caps of companies go up by millions based on nothing more than 8 inches on the inside of the NYT’s business section. Would a company pay $50,000? Hell yeah.

That sort of compensation scheme provides enough for the account team top to bottom and for the corporate overlords even up to holding company levels.

I grew up in politics which is the ultimate pay-for-play. Come election day, your audience (i.e. the voters) tells you whether or not all your work in the prior couple of years will pay off or not. If you get 50%+1, you get a pay day. If you don’t, you get zip. That’s a tough bargain for many to accept, particularly for those young people who grew up in the last decade or two when we dipped pretty far into the the mostly-but-not-entirely bad practice of simply praising and celebrating effort rather than accomplishment.

Austin

PS – Happy 4th of July.  I live in a great country and am proud to be an American even when I’m embarrassed and angered by my government.  The strength of our nation rests partly in our ability to sustain that dynamic over the last 230 years.

2 thoughts on “Playing Catch-Up, Speaking Heresy, Opening the Gates of Hell…Etc., Etc.

  1. Interesting post. It provokes two immediate questions:
    1. How might this model play in the evolving news business? If a certain business placement is worth $50k, what’s to prevent the revenue-challenged newspapers from cutting out the middle man?
    2. What if the pay for performance scheme was implemented in other fields such as health care? Right now, doctors don’t get paid for results or customer satisfaction. We instead rely on their professionalism to do the right thing, sort of like traditional PR.

  2. jloveland says:

    Many experienced PR people will tell you that they frequently are initially hired to do media relations, because that is the part of PR clients understand most clearly, but they ultimately become most valued by clients because of their NON-media relations tools. These are PR tools clients didn’t know existed until they started working with a versatile PR person. Stakeholder and influencer outreach. Street marketing. Consumer research and associated strategic communications planning. Public affairs counsel. Media-agnostic planning. Crisis prevention and mitigation counsel. That kind of stuff.

    If you hire a strict media relations pay-for-performance shop working narrowly against a p4p media relations contract, might you miss out on some of the most powerful tools PR has to offer?

    It’s true, like standardized tests keep teachers and schools accountable for test scores, a pay-for-performance contract model does keep PR shops accountable for media hits. But just as teaching narrowly to the test can limit teachers ability to produce flexible critical thinkers and problem solvers, practicing narrowly against a p4p media relations contract can keep PR partners in such a small box that they are limited in their ability to improve the client’s overall long-term reputation.

    I’m not saying a narrow media relations pay-for-perfomance contract has no place. I’m just saying there is a potential downside for clients.

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