Inc. magazine gets it wrong: Pay-for-placement isn't PR

I'm a big fan of Inc. magazine, but when I opened up my glossy October edition I was pretty disappointed to find an article titled. "Goodbye Retainers. Pay As You Go With Results-Based PR."

The feature opens with a horror story of an entrepreneur (Ada Tray) who paid a PR firm the ghastly sum of $2,000 per month and didn't get what she was promised. You can figure out the rest of the story. She fires the agency, hires a pay-per-placement firm and lives happily ever after. (actually, she only got one placement out of the pay-per-placement firm, but she only had to pay $1,000 for that)

These kind of stories make me sick for several reasons. First, let's address the obvious. What do you expect to get for $2,000 per month? In this particular story, Ada thought that two grand would buy all the media in the world. Two grand won't get you an ad in Inc. magazine equal to the size of this sentence. I know the magazine is aimed at small business entrepreneurs, but $2,000 a month isn't a PR budget, it's barely an electric bill.

Ada then refers to what she wants as a "PR firm" when in reality, she wants a publicist. Think about it. Pay-for-placement only encourages a 'PR firm' to get media results. What happened to strategy? What happened to any tactic other than media? PR firms deliver business communications consulting. Publicists only focus on media. Nelly has a publicist. Fortune 500 companies have PR firms.

In addition, nothing in the article addressed the issue of ethics. If the writer, Stephanie Clifford, had bothered to visit the Web site of PRSA (Public Relations Society of America), she would have come across our Code of Ethics. The very first provision addresses the issue of maintaining the free flow of information. How does this relate to pay-for-placement? It tempts unethical behavior, and is therefore unallowed by the Code of Ethics. As an example, let's say I'm a PR guy and my client pays me $5,000 for a feature story. What's the stop me from approaching my media buddies and offering them $2,000 under the table to run my story? Think paying journalists to run stories or promote products doesn't happen or is crazy? Remember Armstrong Williams?

Finally, and I promise I'll stop after this, let's look at advertising, a much more expensive proposition than public relations. Washington University in St. Louis ran a full page ad in Inc. magazine a few pages after the PR story. According to the published rate sheet, a full page ad costs $95,060 to run in one month's issue. Now, I'm not good at math, but that seems like a lot more than $2,000. And let's compare what you get. With a monthly retainer, a good PR firm would contact many media outlets and potentially land several stories. With the ad, you get one page in one magazine during one month. Hell, a full year of PR firm support at two grand a month only costs $24,000. You could pay a PR firm for nearly four years before reaching the cost of that one ad. That's just sick.