Should A Startup Hire a PR Agency?

A lot of people think that startups should always do their own PR in-house and never hire an agency.  I used to be one of them.  I’ve changed my mind about that however and now I think that for some startups (not all) hiring an agency can be a very, very good thing.

What I Used to Think: Only Big Companies Hire PR Agencies (the startups that do are suckers)

Early in my career I worked with 2 PR agencies at 2 different startups and both times my company felt they got very little out of the relationship.  On the startup side we went in with the idea that the agency was going to “get our name out there.” and we decided on which agency to use based mainly on what we could afford and the journalist relationships they brought with them.  In both cases we complained that the agency folks were too non-technical to really understand our business and our messaging.  We appreciated the relationships they had with journalists but that list seemed small and didn’t change much.  Once we had met with the journalists once,  we suspected we could pitch a story just as effectively as they could (and probably better given our understanding of the market).  We hated paying the agency a retainer fee because it seemed that if we weren’t pestering them to do something specific, we paid them to “do nothing.”  For years, I believed that startups that hired PR agencies were like startups that spent their marketing budget on tradeshows: suckers.

It Turned Out I Didn’t Know What I Was Doing

Then I found out I had been doing it all wrong.  After working at a couple of large companies and watching the teams there work with outside agencies, it became clear to me that I could have gotten much, much more out of my PR agency relationship had I done a better job of goal setting, planning and management.  Here are some steps I think a startup should take:

1/ Determine if You Really Need Outside Help or Not – There are lots of reasons why you shouldn’t hire an agency.  First of all you need to make sure that you are past the stage of determining what exactly your product is and what market it serves.  Investing in any significant marketing activity before that is pointless.  Once you are past that stage you need to set out your goals and determine whether or not you can accomplish them in-house.  Most startups can easily start by working PR in-house until they either have a significant new goal crop up that they can’t handle, or the PR they are doing in-house isn’t accomplishing a specific goal (see the next point).  In an nutshell, I think most startups should transition to an agency only after they have reached the limits of what they can do themselves.  If you start with an agency without managing it yourself in-house first I can guarantee you that at some point you will start to wonder how much of what you are paying them to do you could be doing much cheaper yourself.  If you start by managing it in-house you will know exactly why you’ve made the jump and what you want out of it.  You will then do a better job of selecting an agency, setting goals and working your plan.

2/ Establish Clear Goals (that make sense) – I’ve seen a lot of startups hire a firm without really knowing what they wanted to accomplish beyond a vague idea that they want to increase the visibility of the company.  There are a lot of ways to do that and PR isn’t always the best one for the stage your company is at, the market you are going after, etc.  On the other hand if you have a clearly defined specific goal it becomes a lot easier to decide if it makes sense to bring in outside help and if you do you’ll be able to clearly describe what you want done.  These goals can be short-term (breaking into a specific new market/geography,  making some noise around a specific product launch, broadening your reach among a new group of influencers, etc.) or longer-term (increasing your credibility or addressing a specific market concern through independent product reviews, product awards, specific  analyst coverage, etc).  Whatever it is, you need to be very clear what you want so that you can build a plan to get it.

3/ Hire the Right Agency – Once you know what you want you can find an agency that is best suited to help you deliver on those goals.  Again “Get our name out there” is something that literally every agency will tell you they can do.  However, if you are trying to expand into Europe and your target market is large financial services firms, you now have some good specific questions you can ask potential agencies to find the best fit.  Agencies have different areas that they specialize in – you’ll want to find one that can deliver on the goals that you’ve laid out.

4/ Lay Out a Tactical Plan – Setting the goals down on paper for what you are trying to accomplish month by month avoids the twin problems of startups feeling like their agency isn’t doing anything for them and agencies feeling like their work isn’t understood or appreciated. Great agencies will really shine in this planning process by pulling out ideas that you wouldn’t have thought of and teaching you things you didn’t know about who wants to write about what and why.   If you don’t go through this process, you will find yourself having regular conference calls with your agency where they complain that you aren’t giving them any “news”, and you’ll be complaining that your agency doesn’t understand what you are trying to do.

5/ Educate the Agency Folk – Chances are you’ve been living and breathing your product offerings for years.  You need to make sure you spend the time to walk the folks at the agency through your positioning and value propositions.  The more they understand about your target markets, your use case scenarios, your key points of value,  the more they can channel their experience, knowledge and creativity into things that will work for your company.

6/ Measure, Adjust and Manage – Like any vendor relationship, you need to check progress and if you aren’t getting what you agreed to, you need to be working with the agency to fix it. This is pretty easy to do if you have a well-defined tactical plan. Even if you don’t, it’s never too late to call your account manager and do a reset.  The more you can communicate the better and in my experience some agencies just work better with demanding clients.  Don’t be afraid to ask for what you want and to complain if you aren’t getting it.

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65 thoughts on “Should A Startup Hire a PR Agency?”

  1. Hi April,
    Good points. The other thing I’d add, having hired agencies at startups, is: be realistic about matching your goals with the length of your engagement with the agency.

    I’ve seen companies hire an agency for a short stint (2 months) just to build some buzz around a very specific event, but for the most part, it can take months to get on the radar of your target media. I’ve seen too many companies assume their agency is bad if they didn’t get results quickly.

    You can set tiered goals based on the type of target media (e.g. coverage in Tier 2 media in the first 4 months, Tier 1 media in the first 6-12 months).

    1. Hi Amrita,
      That’s a really good point and I agree with you with respect to tier 1 vs. tier 2 and the timeframes. The other thing I’ve seen is that startup think they can make a measurable change in awareness in a very short period of time. The reality is that it takes much longer than people think.
      April

  2. Interesting. Would be cool if agencies put their money where their mouth was and tied some portion of their comp to attainment of these specific goals.

    I think many startups think PR is a part of their user acquisition strategy and are then disappointed when the cost of users is way higher through this channel than others.

    As you said, do it in house until you outgrow what you can do internally

    1. Hi Mark,
      I’m with you on how they are compensated. I’ve hired agencies on a project basis in the past and that’s always been a better way to do it. Unfortunately the standard for these folks is to do a retainer which is just never a good thing, imo.
      April

  3. Other reasons TO hire a PR agency:

    – Help fine tune your messaging from techno-babble to buyer speak.

    – Outsource one of your many tasks that you just haven’t been properly focusing on to allow you to spend time elsewhere.

    – They have the rolodex (and relationships) that you do not have.

    1. Hi Barry,
      Those are all good reasons. There are of course lots of other ones including:
      – they can help you turn a product pitch into a story that a journalist is interested in writing about
      – they know about publications that are orthogonal to the ones you’ve pitched in the past that you can target
      – they can help with other ideas that have worked for other clients – applying to awards, paid research, special promotions. etc.
      – they can help with geographies you aren’t familiar with (Europe, Asia, South America), or channels you aren’t familiar with (mobile, social media).
      That’s of course not everything but some of the things I’ve appreciated the help with.
      April

  4. Having been subjected to poor pitches (as a tech journalist), worked with some deluded start-ups (as agency junior) and hired some agencies who did not work out (as inhouse PR director) so I would like to add some reasons for start-ups NOT to hire PR agencies.

    1. When you are confused about the difference between what marketing delivers (customers) versus what PR creates (warmer leads).

    2. When PR is your only marketing strategy.

    3. When you effectively expect PR companies to lie on your behalf because you have not trained them.

    That said, I would argue that Start-ups gain MORE from PR than established companies because the editorial approval given adds credibility when it is needed most. Those who can hone a message which is attractive to cynical hacks (like me) stand a great chance of breaking through.

    For this reason Positive Marketing (www.positivemarketing.org) PREFERS to work with tomorrow’s leaders and is currently engaged in the UK by start-ups from the UK, US, Israel, Thailand and New Zealand. We want to work with more and happy to take projects.

    1. April,

      I think we need to be talking about finding a new breed of agency (or at least selecting an agency that is comfortable with the particular vagaries of a startup).

      My experience is that many agencies are happy to take your money and bring whatever message you want to the market. But as you eluded to, startups are often about discovery and iteration – not knowing what the right message needs to be, or even who best to aim at. An agency that is prepared to work within those constraints, or better yet, one that is willing to help develop and test and refine alternatives may be much more valuable to a startup.

      Also, I think startups (and mature companies for that matter) should look for agencies that don’t necessarily agree with what you think you need, but are prepared to challenge your assumptions and present alternatives based on their experience & knowledge of a particular market.

  5. I think April is off-base in her end assumption. Even for larger companies, paying a PR agency is always a losing proposition. It’s simple economics. The PR agency makes more money if it does as little as possible to keep you happy. Not enough to get dumped but just enough. Unfortunately, that’s not a great value proposition. Further, PR agencies hate to have their people on site at customer companies because that means they are actually working for a full day on one account — which makes it very hard to double bill. However, you need to be onsite at least a significant part of the time in order to really understand what the pitch should be for a company. Lastly, PR agencies, particularly in technical areas, have a two question problem. They can almost NEVER articulate a company’s value proposition past two reporter questions without sounding stupid. This will never change b/c an agency always spreads its reps as thinly as possible (with 4 clients as a minimum).

    1. Hi Jim,
      I think we are in total agreement on the basic principles – monthly retainers reward PR firms for the wrong behavior and companies need to own their own messaging.
      What I’m arguing however is that there is great value from working with an agency if you actively manage them to ensure you are getting value out of their spend and you don’t try to get them to do things they aren’t great at doing (like crafting and delivering your value proposition).
      And by the way, the PR folks I worked with rarely came on-site, even when I worked at very large companies.
      April

  6. I think I use a completely different lens to view PR when it comes to impact on a startup.

    First, I subscribe to the Philip Kotler philosophy that “PR is most effective to build a brand, while advertising is superior to maintain it”. Since startups are virtually always unknowns to begin with, you’re always building a brand from scratch. It’s not an effective lead source, but as a brand-builder, it’s a great potential source of credibility that dials up conversion and close rates, if done well.

    Second, PR is like sales. You have to build a pipeline of prospects to expect to close any, you need to constantly manage that pipeline, and you often have to expect long sales cycles and be diligent till your story suddenly becomes newsworthy for the channel you’re prospecting.

    If you want to most cost-effectively build a pipeline, and mine it for “closes” (placements), you want a top sales person. Not frequent that you can effectively do that with a multi-tasking marketing manager who doesn’t have specific concentrated experience and expertise in PR (what startup ever DOES get to afford that specificity in marketing?). That sales person also needs the Rolodex – and a PR person with experience in your vertical has a better one that you ever will.

    Which does beg the question – if you’re just doing PR on a project basis, how effective can you ever be? I can’t imagine hiring a sales person for a couple of months and expect gratifying results.

    Next, they’re not the “sales engineer” – they generate the sales meeting, where you gotta represent the technical content. They can spin the story you have crafted (and help you enhance it), but they’re not very good at creating it and will never know your business well enough (and you SURE don’t want to pay them to learn it that well) to message or create core content. That better be left to your team, or you’ll be sorry. Just try asking them to write a bylined article for you. Watch your retainer evaporate, and you rewrite the piece from scratch.

    Net, net – if you simply farm PR as a total responsibility to the agency, you’re likely to be very disappointed.

    Further, why not retainer, if you define it in the right way? All these firms have billable rates for each member of their team, and you have every right to ask what those rates are and what commensurate hourly dedication that means for your firm, the client. With mutual expectations, you know exactly what to demand and keep tabs on.

    Finally, PR should be managed and measured like any other business element. Establish an expectation for the number of placements, in what kinds of media, mutually up front. Then hold the firm accountable for it. The good ones will create dashboards they share with you in weekly review meetings, showing prospects, opportunities, wins, and losses.

  7. Hi April – I’ve been a fan of your blog for a long time and I was so glad when I Googled this question (should I hire a PR agency), your blog came up.

    We had some incorrect expectations about what we can get out of paying for PR, so thank you for clearing things up from a startup’s perspective.

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