Shift towards clients requesting payment by results criticised by the PRCA

The PRCA has hit out at the growing trend towards clients demanding results-oriented pay structures.

In a PRWeek poll of 20 medium to large agencies, eight firms said they had seen a clear increase in requests for some element of payment by results over the past six months.

Cake managing partner Chris Wood said it was 'now the norm, rather than the exception'.

PRCA director general Francis Ingham criticised the development: 'By and large, payment by results is a bad thing for agencies, and a bad thing for our industry more broadly.

'To be effective, payment by results requires a degree of sophisticated evaluation that is very rarely found in, and paid for by, the client world. In a digital world, it is an analogue method of rewarding professional PR skill. We certainly do not encourage it.'

Forms of payment by results vary, but usually involve a basic fee to which a success fee is then added, based on the amount of press coverage achieved by the agency. Smaller agencies and regional public sector organisations are understood to be more accepting of this model.

Umpf founder Adrian Johnson, formerly a board director at payment-by-results agency Lucre, said such contracts had pitfalls.

'In a bid to hit agency-set targets, staff are chasing quantity rather than focusing on quality. When this happens, there's a temptation to spam out a release to hundreds of contacts using journalist list-building services,' he said.

Eulogy CEO Adrian Brady argued: 'The debate about payment by results becomes murky as often it simply means a budget holder is seeking a discount rather than actually wanting to pay less for less and more for more.'

However, Flagship Consulting director of new business Julia Woodcock has called for the industry to give serious consideration to the idea: 'It gives reassurance to clients who may be sceptical or new to PR, and shows our confidence in achieving desired results. You just need to be very clear from the start how success will be measured.'

Flagship Consulting was recently appointed by South West Regional Development Agency under this formula.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Would you like to post a comment?

Please Sign in or register.