First off, apologies for the slow going here at UnSpun.  As tends to happen this time of year, the account work has kicked into high gear and the new biz trail has been full. Unfortunately, all us junior staffers have been bogged down on that side of the house and the UnSpun posts have suffered.  No more lulls from here on out though, we promise.

Now, to the topic at hand…the concept of Pay for Performance as it relates primarily to pharma and PR.  A couple of months back, I posted here about the pay-for-performance approach being implemented by drug companies abroad.  In a nutshell, the concept is that a company is compensated based on how well a drug lives up to its promises.  At the time, I considered the impact this model would have on PR when the success or failure of a drug is solely dependant upon its success in treatment.  Here is a brief snippet of my thoughts:

“In this case, the public has broadened to include traditional media, emerging media, governments and customers.  Despite the fact that consumers will ultimately determine the fate of the drug companies in this model, there are steps that can be taken to engage in the process.  

In this new model, it will be imperative for drug companies to engage with the end consumer.  This could mean providing a blog that discusses issues associated with the medicine, or engaging via social media forums such as Twitter to discuss openly and honestly steps to mitigate the ailment the drug treats.  In short, public relations’ strategies will need to change course and focus at educating the public.  In the end, this type of strategy does not cut out the middle man; it makes the middle man ever more important.”

Well, the issue of pay-for-performance in the pharma industry continues to gain credence.  In fact, just last week an article appeared in the Wall Street Journal discussing the merits of pay-for-performance and the future of the pharma industry. 

I will let the industry pundits debate the merits of this approach, but what I want to consider is how applicable this approach would be to the PR industry.  What if our retainers were based solely on the amount of ink we scored?  No ink, no cash.  Of course, the bulk of the PR industry would be up in arms bemoaning the feasibility of this approach.  There argument would go something like this: “As an industry, our job is to tell your story as effectively as possible to your core audience.  We can provide strategic counsel and media tips, but once we secure the meeting, it is in your hands to make the meeting a success.  After that, there is still no guarantee a reporter will write.  Basically, our job is to tee it up and yours is to knock it out of the park.”

And this would be the wrong argument to prove our point.  

While that argument has some validity, it probably wouldn’t sit well with a VP of Marketing—especially in the current economic climate when budgets are tightening.  So is the right approach to base the retainer of PR services solely on ink?  As an industry, we have long fought the metric battle, constantly struggling to find concrete numbers to measure a fluid service.  If we boil it down to a cut and dry measurement, would we be helping ourselves solve that issue once and for all?

In my opinion, the answer is not so simple.  Sure, a VP of Marketing would likely eat up this approach to PR.  It mitigates any risk they have in the PR-buying process.  And in the short term, it may help solve the metric question.  But in the long run, we’d only be perpetuating the myth that PR is merely about scoring ink.  We’d be helping feed the idea that we are a bunch of flacks fixated on the next big hit.  If we were to adopt such a model, we’d only prove correct what many have been saying all along—PR people simply don’t understand the marketing mix.  In reality, PR is about building relationships with key audiences.  It is about becoming an active member of a community and helping to solidify and extend the brand of your clients.  Ink is a byproduct of that process, but not the sole metric by which we should measure.  This should be our answer to the idea of pay-for-performance in the PR industry.