VC PR Partner | Deeptech PR consultant
Most companies invest little in PR. They spend a lot on marketing, but they stop spending on PR at $50,000 a month. Crazy for me. This opinion was expressed by the GP of the very famous venture capital company Benchmark Bill Gurley.
Some entrepreneurs may misinterpret this advice and, as a result, hire a more expensive agency or pay for the product placements in as many media as possible. Crazy for me. Quite often startups spend 5-10k dollars a month on PR and expect that sales will grow and investors will come. But at the end of the day, they get just a small comment in an article about a competitor, or a report of how many press releases were sent.
Let's figure out how a usual PR agency works, whether your company needs it now, why to hire a PR specialist, and what to expect.
The agency's goal is the same as that of a startup - to make money. Only not in the long run - there is no goal of doing good work, gaining clients, and then successfully selling or going to an IPO. A PR agency should earn immediately and preferably a lot at once.
So an entrepreneur meets an experienced PR specialist and the next minute a contract is signed. I saw many times when a founder of a company meets with a founder of a PR agency, tells his vision, gives examples of what he/ she likes. And then receives a presentation offer with exactly these points and proposals.
Ever wanted to be called an industry expert? Please, see here the line "comprehensive PR work aimed at building the image of the founder as an expert: columns in the top media, participation in the best conferences." Of course, the founder likes everything and immediately signs a contract (if the company does not have a PR person who expresses some doubts that the WSJ is unlikely to take an op-ed authored by some startup founder).
And then the work goes to an account, which, in addition to your company, may have a couple more clients. What does an account do? If you have a news hook, this is easy. An account's task then is to make a maximum of publications on one topic. But what if there is no news, and there are 5 mentions in the KPI agreement. Here you have to find out the editorial calendar, sometimes collect the market data, and pitch it to journalists.
This work takes a lot of time, but the editor may not like the material at the end. Hours were spent, the salary still needs to be paid, but the KPI has not been met. Everyone is disappointed. Such a situation can occur with an agency for both 5 thousand and 50 thousand USD.
After this, the question arises - is PR needed at all? Opinions are divided here. I believe PR can help with:
- domain authority,
- recognition of the company among investors and partners,
- HR brand for employees,
- personal brand,
- the reputation of employees as experts,
- the brand image of the company as a whole.
Someone will say that all this can be done without a PR person. Conventionally, set up SEO and email newsletters, apply for Forbes Council and publish columns once a month, pay for partner material and post an interview, and sponsor a conference and speak on the main stage.
Absolutely right. Not everyone will understand that the material in the media is placed on a paid basis, that the speaker is on stage not because he/she tells a very interesting story. But there are two points.
First, not all publications can be purchased for money. Then, many have already begun to see the mark “partner material” and associate it with the presence of words of praise in the article. And again, such material must be coordinated with the publication and prepared - either written by yourselves or together with the editorial board. No media will publish an article "John's company is the best company with an exclusive product that will blow up the market." Even for money.
Secondly, in order to set everything up and correctly execute all the processes of writing and posting materials, organizing speeches, etc., you need an employee. Ideally, he/she should understand what the business is about, where it is going, who the audience is, how to find it, and what to tell it. And also how to keep everything in line, how to work out negative comments, and what to do when your reputation is on fire in the press.
For a company in its earliest stages, the aforementioned employee is the founder himself. Later, if he/she realizes that the help is needed, a PR person is hired. The new employee does all the above tasks, plus maintains social networks, profiles on AngelList, designs LinkedIn, helps with the presentation, etc.
Further, with the development of a company, usually, a division appears. A content marketer works with communication channels - mailing lists, a blog, SMM, and a PR specialist works with the press and conferences. They are also managed by a founder or CEO.
At the next stages, a VP of or Head of PR, marketing, and/or communications appears, who reports to the CEO and directs such employees. His/her responsibilities are to develop a general communication strategy for all audiences; this includes consumer and investor PR, content marketing, HR PR, a crisis action plan, etc.
The work of PR specialists is assessed differently at each stage. In the early stages, it is usually "good that they wrote about us." With the growth of a company, new business tasks appear, where PR has its own role - we must speak on the same panel with this investor, we need to announce the seed so that this fund can read about it, we need to tell users that we have a new feature and a new one product.
Someone counts reach, interactions, and other such metrics. Someone seriously approaches the issue of evaluating the effectiveness and connects analytical systems.
When there is a clear task, then it's easy to evaluate the work. An article came out, a link to it was posted on LinkedIn or Facebook, and a VC or potential customer was targeted. Material came out on a good resource with a backlink to your site - we look at brand requests and visitors from the resource. Everything seems to be simple.
It is more difficult when entrepreneurs ask PRs - how will this publication affect my sales in quantitative terms? If I spend 100 thousand on PR, will we make a million?
Typically, these are questions that founders have early on. A Round A or Serial Entrepreneur does not ask such things. He/she knows that performance marketing is, conventionally, “a million has been poured, we are waiting for three”, and PR is “they told the audience that we earned three million,” and that a separate employee is responsible for each task in the company, managed by a third.
Hiring an agency seems to be more time and money efficient against building your PR department. Especially when a company enters foreign markets and hires a local agency. You expect - they know the market and the press, and so you pay them. Reality is harsh - you may get no mentions at all.
When starting a PR activity, be prepared that not all publications and conferences are interested in you as a speaker, and your product release does not attract media attention. And a PR agency will not help here. PRs may indeed have a good relationship with journalists, but you must have an interesting story to tell. Hire an agency when they have something to work with.
And remember - high price tag! = High efficiency.
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