May 13, 2013

When it comes to start-ups, there is no one size fits all answer about if or when to hire a PR agency

You can’t work in the PR business without developing a thick skin. Some folks in the media take an almost perverse pleasure in bashing the annoying habits or supposed incompetence of PR people and agencies. To be fair, as an industry, we suffer from more than our share of self-inflicted wounds. But that doesn’t mean every criticism is valid. Or even intelligent.

In a recent VentureBeat post, former journalist*, PR rep and now founder of a somewhat creepy site that helps guys stalk single women (sorry, it doesn’t deserve a link), Kevin Leu questions whether start-ups should ever work with a PR firm. Spoiler: he says “no.” Leu’s “5 Reasons You’ll Regret Hiring a PR Agency for Your Start-up – and What You Should Do Instead,” starts with a questionable premise and backs it up with sweeping generalizations unsupported by facts. Good thing he’s no longer a “journalist.” Here are just a few of the things he got wrong.

Choosing-a-PR-Agency-photoFirst, the basic premise: should start-ups hire a PR agency? The real answer, as with most things, is: “it depends.” Some start-ups do just fine getting the word out about themselves without any outside help. Some are really savvy about story-telling, building relationships with media and influencers, leveraging social media and creating content that’s both interesting and marketable. And some start-ups have the internal resources (meaning, mostly time) to put into PR. But many don’t. And if you’re one of the latter, you might need a PR firm.

But is it worth it? According to Leu, the “average” cost of retaining a PR firm is $12,000 per month with a minimum 6-month commitment. That’s a lot of cash for a series A-type start-up. Of course, he has no data to back this number up. And, of course, it’s a completely absurd figure. Do some firms charge that much? Sure, but it’s not “average.” Here at VOXUS, we successfully work with a lot of start-ups whose budgets are far more modest than that. I suspect we’re not unique. Also, in nearly two decades doing PR in Silicon Valley and the Northwest, I’ve never heard of a minimum half-year commitment. Not once.

With his bogus starting number, Leu does some questionable math to arrive at the conclusion that hiring a junior or mid-level PR person internally at somewhere between $70- $90,000 per year is a better use of money than an agency at $144,000. Wrong again. Ask anybody who’s run a business and they’ll tell you that the true cost of an employee is about 2X salary. So that one junior PR person is actually costing you $140-$180,000 year. Even if you accept Leu’s $144,000/year agency number, that doesn’t pencil out. Also, his suggestion that it’s somehow a detriment that agencies have more than one client makes little sense. First, respectable agencies don’t represent multiple, competing clients, so they won’t be pitching another client instead of you. And if they represent complementary clients, it actually helps to make them more knowledgeable about the markets their clients are in.

In any event, Leu’s beef seems to be that you’re paying an agency for the part-time work of two junior people when you can hire one full-time, junior person for the same cost. Once again, his basic assumption is wrong. The VOXUS model ensures that every one of our clients gets consistent, in-depth senior-level attention. And by “senior,” we mean people with at least a decade or more of PR experience and know-how. That in-house junior account person Leu recommends may eventually understand your business, but won’t be providing much in the way of strategy. Nor will he or she have much bandwidth overhead for major launches or when crises erupt. That’s why agencies use teams.

As for Leu’s assertion that agencies don’t know how to tell stories, I’m not sure he’s qualified to say. (Reporting on traffic and writing about where to find girls are hardly complicated beats). But for the record, storytelling is at the center of all we do. That said, no agency (or any start-up working on their own) is going to be successful getting attention if the only thing they have to sell is an idea. Facts, data, compelling user stories, ROI numbers, etc., are all essential to getting quality coverage in top-tier media. Lots of tech start-ups are founded by people with fantastic technical skills and great vision, but lack the communications skills to make their ideas obvious to a wider audience. Again, that’s what we do at VOXUS.

Leu does make one decent point: ensure that any agency you’re considering working with has a track record of recent success representing companies that are like yours, whether it’s in the same market or a similar business challenge.

I guess one out of five isn’t bad…

*Leu’s “journalism” background consists of a few months as a traffic reporter, about a year writing puff pieces for a third-tier bi-monthly lad magazine in Florida and the last several years writing his own blog called “SiliconValleyBachelor.com.” Most recent post: a girl in a bikini holding a drink. The New York Times, it’s not…