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Public Relations: Expense or Profit Center?


Weslie Oeftering
Public Relations: Expense or Profit Center?

Calculating PR ExpenseCongratulations, you’re about to start a new business! Or, maybe you’re just thinking about it and still putting all the pieces (i.e. the budget) together. No matter where you are in the process, you’re excited about your idea (hopefully) and you just know that with the right business plan it’s going to be a success.

Why? Because you’ve covered all your bases. You even budgeted for the one item that many entrepreneurs in your position often forget: marketing.

Why is Marketing Important?

Those who are serious about their business understand that at some point, push will come to shove and they will need a marketing plan. Whether that be through advertising, PR, corporate or crisis communications, sales leads, branding, etc., all depends on a company’s particular situation. How else will consumers find out about their product?

Sure, they could just Google, “Best Ice Scraper for my Car” – but the only way you will show up on any Google SERP, “Best Of” list or Buzzfeed Gift Guide is through marketing. That is, even if your ice scraper really did revolutionize the process of getting ice off of a windshield, it still won’t just magically show up on Oprah’s Favorite Things list; you have to get the word out about it first.

Or, you could just use social media to get the word out about your product and maybe save a few thousand dollars in the process, but even a good social media costs a pretty penny. Plus, there is so much more to marketing and PR than social media, which is a good thing because social media does not work as the best marketing strategy for every brand. For example, BarkBox’s marketing lives, breathes, and thrives almost exclusively on social media, but the fun and engaging content that a brand usually needs to do well in online spaces just is not possible for companies with “boring” brands and/or smaller target markets –  like a company that builds the ALUs for microprocessors.

The only way to reach those smaller target markets is by utilizing the other types of marketing and PR that are out there. Ads or features in trade magazines, booths at trade shows or billboards along the commuter routes of those working in your target industry, are just a few of the other marketing options that exist outside of social media.

Here’s the catch: just like social media (and almost all things worth pursuing), these options will also cost you money. That’s just it though – they are worth pursuing! Very few products just sell themselves, and any successful business person will tell you that it took more than just a good idea and solid marketing strategy to get their products flying off the shelves.

How Much Money Are We Talkin’ Here?

Salary.com says that hiring a PR Director will likely cost you anywhere from $84,000 to $185,000 a year. Fear not, though! Spending the money to hire a good PR professional has acted as the catalyst that many businesses needed to begin earning real money.

Other Ways to Budget

  • Set aside 10% of your annual sales for engaging a PR firm. If you made $500,000 last year, your budget should be $50,000; If you made $1,000,000 last year, then your budget would be $100,000 and so on and so forth.
  • Add the salary of your lowest paid employee and your highest paid employee, divide the sum in half, and use that amount to budget for a consultant. If your lowest paid employee makes $45,000 and your highest paid employee makes $200,000, then you would budget $122,500 for a PR consultant.
  • Find the median cost of your attorney, accountant, and one other professional services provider (architect, engineer, graphic designer) and use that as a pay basis when you start talking to professionals. According to payscale.com, in 2017 the median wage for corporate attorneys, corporate accountants and senior graphic designers was $98,000, $54,000 and $59,000, respectively. That puts your median at $59,000.
  • For a consulting fee, find the rate of a similar (size, scope, situation) full-time employee and double the hourly rate. For example, if you pay your current social media specialist $19 an hour, you should be paying your PR consultant $38 an hour.

Essentially, if you want to make all the other money that you have invested in your business worth it, then you also need to invest in marketing. The more money you are willing to spend on marketing upfront will usually lead to better results in the long run.

 

About Weslie Oeftering: Weslie is a student at The University of Texas at Austin and Swyft’s resident PR and marketing intern. She supports clients with social media, blogging, and tech PR activities. Swyft is a PR and marketing agency with offices in Austin, Houston, and Denver that provide services for tech companies all around the world who are seeking rapid, sustained growth. Some of their services include content marketing, social media strategy, as well as ad buys, email marketing, and media relations.

 

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