As a marketing professional, I have often sat on the client end of the table when negotiating rates with marketing and public relations firms. The historic pricing model that these firms offered involved hourly rates and monthly, or sometimes annual, retainers. Smaller marketing agencies began implementing fixed rate offerings for specific projects and some of the larger agencies seem to be following suit. Recently there has also been an increased willingness to offer pay-for-performance models as well, often with attractive bonuses for the marketing or public relations agency upon meeting the agreed upon goals.

I recently met a local public relations agency in San Diego that offers pay-for-performance programs, meaning that they make the majority of their money only if they secure press coverage for their clients; while charging a nominal monthly retainer. The tricky part about this offering though is arriving at the value of the press coverage; so marketers still need to tread carefully when arranging these programs with outside firms. And with PR there are often no guarantees of coverage, making this a risky program for the PR firm despite every best effort. (more…)