PR by the Pound? PRServe-TechCrunch Smackdown Rekindles Performance PR Topic

By Michael Terpin, founder/CEO, SocialRadius, founder, Marketwire

Late last week, the start-up and tech PR worlds were engrossed by the rapidly unfolding drama surrounding a small Philadelphia PR boutique, PRServe, whose founding and differentiation appears to be based on their “pay for results” credo with a formula wherein it charges startups a flat $750 for a post in a major blog, such asTechCrunch, and $400 in a minor blog – which could potentially range from a second-tier blog of some value to any of the countless mommy blogs and fashion blogs that might have zero strategic value to a startup in enterprise software.

TechCrunchThe Next Web and a few other tech bloggers reacted with a degree of shock and horror – and in the case of TechCrunch, banned PRServe from ever contacting them again (if enforced, a bit of  a death blow for a tech PR firm that caters to startups) and asked for its clients to demand their money back.  Writer Alexis Tsotsis even offered to personally refund companies their $750 if PRServe principal Chris Barrett declined to do so.  Read all the juicy details hereand here.

A few things I want to note here that have yet to be discussed on any of the blogs thus far:

1)      “PR by the pound,” as the World Editors Forum blog put it, is hardly new.  There have been small shops who charge on a per-placement basis since as long as there’s been PR.  I first heard of the practice in the 1980s, but I’m sure it’s gone on long beforehand.  Simply type the phrase “PR pay only for results” into Google and you’ll find dozens of very small firms that you’ve most likely never heard of preaching the allegedly undisputable logic of paying them per placement and not “wasting money” on things like strategy, media training, relationship building, and all those other things that the vast majority of reputable firms put in their “wasteful” retainers.

2)      What’s shocking to me isn’t that these firms still exist – their role is for very small, short-sighted clients with no budgets for PR who are willing to take the chance that an article of any kind in a NY Times or USA Today will be the saving grace for a company with poor market timing, an undifferentiated product set, bad customer service and other things not taken into consideration when a “PR by the pound” shop takes on a client.  What’s shocking to me is that otherwise sophisticated journalists and bloggers who have no problem with a multinational PR firm charging $10k, $20, even $100k a month to a client – even if that week’s main directive is to get a story in TechCrunch – would act as though the Marquis of Queensbury rules had been violated when they find out that a small consultant, perhaps desperate for clients to get started in their career, would charge a small fee (far below the so-called advertising equivalency standards that are still a mainstay of many PR shops in their reporting – which would value TechCrunch’s 8 million readers at a five- or six-figure number based on prevailing CPMs, not a three-digit one) instead of a large retainer.  There is nothing unethical per se in a consultant doing this – it’s just not a smart business practice for the agency in the short-term or the client in the long term.

3)      The confusion among reporters is here is chiefly this: that paying a PR person for results is the equivalent of paying a journalist for the same story – which couldn’t be further from the truth.  It’s ironic that TechCrunch would be the one so horrified, considering they mentioned in their own column that they once were embarrassed by an intern who demanded payment of a Macbook Air computer to publish a story and was subsequently fired.  There’s no concealed conflict on the side of the PR person, however they are being paid, unless they do not disclose who they’re really working for (recall the anti-Google PR fiasco paid by Facebook from last year).

4)      Finally, I’m not letting PRServe off the hook on this one.  In his blog, he states that his is part of a coming wave of innovation like self-serve connection platforms like AirPR (think AirBnB for buying services from small PR firms) and hackPR (similar to HARO, but in a social network instead of a newsletter).  Perhaps those firms may lead a self-service wave; perhaps they’ll just be another tool for small agencies.  But PRServe is not an innovator; they’re just the latest in a long history of small independents and freelancers pitching for the fences without much regard to their client’s overall positioning or long-term needs.

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