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pay for performance

What’s Wrong With Pay for Play? Why is Pay for Play Unethical?

What's Wrong With Pay for Play? Why is Pay for Play Unethical?

First, what is the distinction between pay for performance and pay for play?

One of the primary concerns about Pay for Performance and Pay for Play and even with Relationship Based PR has to do with the risk of payment to the journalist or media organization without adequate disclosure. Money is a powerful incentive. If you pay a PR person $15,000 to 25,000 for a five minute interview and placement on a prime time national TV show and half of it goes to a producer who agreed to booked the show then that is a serious issue. It presents something as objective reporting instead of identifying it clearly as advertising. Does everyone disclose their back door payments? Not really.

At least in my experience, most publicists who offer pay for performance are also highly ethical about what they do. The reason is that while success speaks loud, failure speaks much louder indeed, and unethical and illegal behavior fairly screams across the planet. And as in politics, there are, of course, consequences for getting caught.

The higher costs associated with pay for performance are a testament to how difficult it is to be successful. The publicist must take the risk for their time and effort instead of being paid for their time and effort. So yes, publicists do tend to take care when accepting PFP clients. Clearly, it is exceedingly difficult to be successful with poor quality books and inexperienced authors or those who aren’t qualified in the eyes of the media.

The key thing here is to follow the money. If the money gets to the journalist, then the disclosure is required by the FTC. With Pay for Performance, you pay the publicist for success, but the risk is that the media is getting paid, too.

What’s the Problem with Pay for Play?

With pay for play, you pay the media for their time or to cover production or whatever. With relationship based PR, you pay the publicist for the inside connection or referral, or you pay to be at an event where journalists and producers are there, and there is a risk they are receiving payment above ethical guidelines of requirements. With retainer based and task based, you pay the publicist to pitch and there is no payment to the media. It’s the content that is the determining factor.

There is a growing number of media who will charge you a fee and then give you coverage. It’s an ongoing issue in society.

Pay for play poses a growing ethical issue in social media, blogs, paid reviews, media placements in print, and on radio and TV. FTC 16 CFR Part 255 states anyone receiving a product (book, TV, widget) for review is considered to be paid with the product and must be disclosed.

The Public Relations Society of America (PRSA)’s code now states that ethical practitioners must “encourage disclosure of any exchange of value that influences how those they represent are covered.” The value exchanged may take the form of cash, travel, gifts or future favors.

http://www.prsa.org/SearchResults/view/8138/105/PRSA_speaks_out_on_Pay_for_Play_strengthens_Code_o#.Usnlf9JDss0

You can pitch blogs and receive responses from mommy and techie bloggers (from $5 and $10 to $300) to radio shows and even major network and syndicated TV shows saying they’ll be happy to write about you or do a show, if you only pay for the costs of production ($3,000 to $5,000).

Steve Bennett wrote a column in PR Week and said:

“At The New York Times you can’t even accept a free lunch from a contact. And the AP sets a limit of $10 on the size of any benefit received by a journalist.”

http://www.prweekus.com/when-earned-media-becomes-paid-for/article/254180/

The relationship based poses similar ethically questionable situations. It sounds great to hear a PR firm or publicist say that they are on personal terms with a journalist or a host or producer at a big TV show. What’s the problem?

We rely on media to be impartial and to give everyone fair and honest consideration.

Many see this particular style of doing business as a slippery slope that is very susceptible to corruption that undermines the very core of objective reporting and fairness in journalism. There are public relations firms and service providers who offer to place you in front of a group of journalists for a fee. Is it any different than the payments of lobbyists and political action committees in exchange for a meeting with a lawmaker or a politician?

The gold ol’ “hey I’ll buy you lunch meetings”, with drinks, and even, the payment of transportation and even stays at hotels, and more in exchange for coverage. These can turn into lucrative clandestine long-term arrangements where favorable repeat coverage goes to people, companies, organizations, who can afford to pay for the privilege to speak with journalists. What if the PR firm slips a commission fee to the journalist or a “production cost reimbursement” to the media organization?

Do the journalists and their media organizations disclose all financial and other “gifts” faithfully? Do our politicians disclose all their donations, donors, and payments? OK I’m in dreamland.

The next time you see a TV news magazine show look closely for “FTC Disclosure” with the list of sponsors in the credits at the beginning (“The following is paid by our sponsors”.) and the end of the show (the quickly scrolling list of sponsors). Do you even see it?

Pay for Performance PR – Analysis of Pros and Cons

Pay for Performance PR - Analysis of Pros and Cons

There are several different types of PR firms and they operate in accordance to one of more models.

Pay for Performance
Pay for play
Relationship Based
Retainer Based
Specialty Boutique
Task Based Service Providers
Pay & Pray News Release Distribution Services
Internal PR
Do It Yourself PR

If you want to see the whole article, please send me an email at Paul@DirectContactPR.com

I’m excerpting just the first section, which addresses your pay for performance question.

First we have to recognize what a publicist can do for you.

Recognize that a publicist will spend time researching, writing, copywriting, and devoting their experience and expertise on your behalf. They will study what you have created, evaluate your skills and hopefully identify and leverage what you are best at, then craft copy to be used in persuading media to give publish articles, interviews, and reviews, or producers to feature you and do interviews on their shows. They will then contact media, hopefully the right media, on your behalf, and pitch you and see if you can meet the media needs. They will then try to get you the best type of coverage you seek. They may also train you and guide you so that you do the best article or performance and maximize your chances of turning a profit.

When you hire a publicist, you must negotiate the work that the publicist will do for you. It is best if you clearly understand and have a precise definition of the work that will be performed and when it is completed.

Pay for Performance

Very simply, you will pay for the quantity and quality of the coverage you receive based on a rate that is commensurate with perceived and or prior proven value of the coverage, the market size and importance.

If you think that the “pay-for-performance” is a way to produce guaranteed media coverage you might want to think again. You may fall victim to your own success.

Every pay-for-performance PR firm warns and acknowledges that clients are likely to pay way more than they anticipated, particularly when a PR campaign is successful in a big way. You can negotiate and will pay more on a spectrum that goes from pithy or snappy quotes from you as author or expert, to company mentions, to book or product reviews, to feature stories, to short interviews, to long in-depth interviews.

For example, a single placement in on a major national TV show may cost $15 – 25,000, while a mention in a small newspaper might run you $150 – 300, a radio show in small town America might run you $200 – 500, or in a major metropolitan area for $1000 – 1500 or more. Feature stories will go for $300 to $3,000 depending on market, industry and circulation.

If you sign a contract for pay-for-performance, you will be obligated if you get the interview or if the story, large or small is printed.

Here’s the catch: Whether you sell product and break even on the costs of getting the media coverage is up to you and what you make of the golden opportunity.

In other words, if you galvanize people and your interview and story results in sales, yes, you can do very well.

But if you put on a mediocre or boring performance, then you will still be contractually obligated to pay for the coverage whether you make money or not. You are on the hook and yes, you can be sued if you fail to honor those contractual obligations.

Dan Smith owner of Smith Publicity has posted a great reference case study article on his website.

http://www.smithpublicity.com/2012/03/february-2012/

Here are links to the rate sheets for two pay-for-performance companies:

http://www.payperclip.com/wp-content/uploads/2012/07/PayPerClip-Rates-7-26-12.pdf

http://www.publicityguaranteed.com/rates.html

Here is a link to an article on the negatives of pay-for performance in Your Business Arizona

http://yourbusiness.azcentral.com/negatives-payforperformance-public-relations-4362.html

BTW, I operate a task based services provider company. Hope this helps!