Over the years I have had many offers to undertake PR programs for clients in return for recompense other than the coin of the realm. I have also worked under a few different charging systems.

Various means of charging for public relations services

Let me briefly set out some of the alternatives:

  1. In accordance with the amount of space that is achieved: The payment offered varies from the direct equivalent cost of the advertising space to some type of multiplication factor ranging from 3 ½ to five times on the grounds that editorial is more valuable than advertising. This method of payment has absolutely no appeal and is expressly forbidden in the industry. I did come across one case many years ago when a very creative conman who claimed to be a PR practitioner was paid by an international airline with a clipping book of the media coverage he had achieved. Unfortunately, he had a mate who was a printer and all the clippings were fakes.
  2. So much paid for each media release: This is an alternative on the amount of space and is driven from the widely held belief that media releases are successful in obtaining media coverage (usually with the proviso that you need to send them out to every newspaper in Australia). There is no way, we or any other the experienced and ethical practitioner would accept such an offer because among other reasons, it wouldn’t work.
  3. Straight contra with the client product or products provided instead cash: This can have appeal if the product is highly desirable. We were tempted a numbers of years ago with the offer by an Asian international of airline tickets, but the negotiations broke down because we wanted first class travel and five-star hotel accommodation, where they wanted to provide economy sub load, which meant we could be offloaded at any airport if the aircraft was full of fare paying passengers. We also inadvertently finished up with a contra paid PR fee from a restaurant in Melbourne many years ago… We had done the job, but they did not have the money to pay us. So we finished up eating the fee!  
  4. Equity in the company: Being paid in equity, or part equity part cash is a relative common offer, particularly if you are promoting a company which is floating. However, we have not been tempted, but I have heard of many PR companies that have accepted this form of payment.
  5. Payment in arrears, with a bonus, after success has been achieved: I have heard about this form of payment, which is usually offered by a company that is seeking help for a new product launch, but can’t afford the PR company. These companies are so convinced that their product will be successful that they will be rolling in it after the public finds out about the great invention.
  6. Reciprocal trade: This is the barter system made popular by Bartercard and BBX. We have accepted this form of payment in the past, and still do, with the proviso that the percentage we accept must be less that 20 per cent of our total turnover as we still need cash to cover all those other operating costs, although we can use trade dollars instead of cash for some purchases.  
  7. Retainer: This is usually a small fixed amount which is offered in the mistaken belief that we would be attracted to the surety of payment regardless of the amount of time that we spend in doing the work. There have been a number of variations of this approach that I have heard about over the years. For example, retainer plus hours, with the retainer simply serving to retain the consultant and keep them from being attracted to work for competitors.
  8. Straight hours: This approach is still used today by many PR practitioners and is simply a charge directly based on the amount of hours that are spent on a time per hour charge according to the charge out rate of the people who have done the work. The weakness usually is that it is hard to cap the hours as it is really like a taxi meter which keeps ticking over. In my opinion it focuses the client on the wrong thing, which is the amount of time spent, not the outcome. Such as how could you possibly spend that much time writing a press release?  
  9. Predicted hours: We do use an hourly charge for jobs where we can’t predict in advance the amount of time we are going to spend, such as in a crisis management situation. However, we do try and predict how much time we expect to spend and discuss it with the client when we are close to reaching this figure, before we make the charge. 
  10. Professional fee: A monthly professional fee (or it could be a project fee for a three-month project), supported by the predicted workload, or variations on this principle is the most popular means of charging for PR services. The fact that this approach is so universally used says something about the fairness of this system.

But I am sure that there are other charging systems that are in use, or you have heard of, and I would love to hear about them. So please contribute to this debate?

Dennis Rutzou