Can performance-based pricing work in PR?

Inspired by Justin Bieber’s manager, the author—a PR firm owner—wonders whether PR agencies need to put more skin in the game.

He built a company that does more than marketing communications. It also does packaging and point-of-purchase and sales. So, it’s a full-on marketing firm that does something fascinating: Performance-based pricing.

Of course, I was a little skeptical (and very curious) to hear this. After all, when people in our industry charge for performance, it typically means they get paid based on number of impressions, which are easy to game.

Put something on BusinessWire and watch the impressions come in. You don’t have to do any work and the perception is it’s been picked up all over the place, including USA Today and Yahoo.

If you go to those sites (or pick up the paper), you never find the story because it’s buried deep in some spot people don’t read, but to an unsuspecting business owner, it looks like you’re doing your job—and they’re more than happy to pay the bill.

But the phone doesn’t ring. There isn’t the publicity effect we perceive will happen when we’re all over the news. No one comes in or calls or buys.

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