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Are Traditional PR Agency Models Flawed and Are You Paying the Price?


Written by: Basset PR

Are PR agency business models flowed?

The global PR industry hit $14b in 2015 and is expected to hit $20b by 2020 according to the Holmes report. I’ve worked in PR for 20-years and we have to say, not a lot has changed and it’s disturbing. This is why we set out to create Basset PR. If you haven’t already asked yourself the questions below, maybe today is the day to do so.

  • Am I paying too much for PR?
  • What should I expect from my agency?
  • What is the ROI for PR?
  • Should I hire someone internally instead of an agency?
  • Am I safer going with a larger, well-known agency or smaller boutique?

We cannot answer these questions for you, but based on our experience in working at some of the world’s largest agencies, we can provide insights into how “traditional” agencies are structured, what you should expect from any agency you work with and the differences between internal hires, large agencies and boutique agencies.

A breakdown of your costs for PR

The average monthly retainer for PR if you are a startup is approximately $10k – $15k per month and for an established company, you’re looking at $15k – $30k per month. Major corporations may see fees ranging from $100k – $175k per month. So what does that money buy you? Let’s use startups as the example.
For $10k – $15k per month, you will typically have an account manager who handles your “account” day-to-day. They plan, field your requests, arrange meetings, deliver reports and make sure the work is being done. The average salary for this person is approximately $80k per year and you are being charged between $150/hr. – $185/hr. for their services.

Under your account manager you may find a media relations specialist or two and maybe a coordinator. You will initially see and hear from a Vice President or Director, but in our experience, the frequency of communication from that level in a larger agency dwindles over time because their average hourly rate is $356 and can quickly add up if you are only paying $15k per month. At this level of monthly retainer, you are most likely getting about 56 hours per month from your agency, or 14 hours per week dedicated to your business.

What are you getting for 14 hours per week? In our experience, larger, more traditional agencies spend a lot of time calculating the time they spend on your account. So let’s remove 2 hours per week for that. Another 2 hours for emails and phone calls (YES, you are billed for those). About 5 hours of the remaining 10 are spent researching storylines, creating pitches and matching those with relevant journalists and maybe the remaining 5 hours are spent pitching your story, following up with reporters and reporting back to you. By the way, you are 1 of 4-5 accounts that are being handled by the junior employees. After all, they need to be billable 50-60 hours per week and you are only paying them for 14.

Here’s how it breaks down in simple terms.


  • $15,000 per month retainer
  • $265 average hourly rate (blended $356 for VP level and $170 for junior level)
  • 56 hours per month
  • 14 hours per week – spent on reporting, phone calls, emails and some pitching of your story

The question to ask is: does 14 hours per week for $180,000 per year deliver what my business needs? If not, there are alternatives to hiring an internal employee which comes with overhead (medical, dental, 401K, computer, office space, etc.).

What am I getting for those fees?

We are generalizing a bit in this post, but on average, for a traditional PR agency, you can expect some media pitching when you have news, some guidance on what constitutes news, some reporting on who picked up your news and maybe a press release or two. What does that do for your business exactly? Quite frankly, not much. We suggest that you either negotiate strategic, value-added services into the contract, or look to a smaller, boutique agency for strategic counsel, solid storytelling and media relations and integrated communications e.g. blog writing, social media management, customer reference development and more.

The ROI of PR

While the ultimate goal of PR is to get your target audience to pick up the phone and call you, or sign up for what you have to offer, the truth is, PR is not that straightforward. However there are some metrics that can be put into place to better understand the impact PR is having on your brand, awareness and visibility. Are you gaining more RELEVANT followers on your social media channels? Are you being invited to more deals? Has your subscriber base or consumer customers increased? How many conversations now include your company name?

Should I hire someone internally instead of an agency?

There is great value in having someone who is solely dedicated to your business and sits inside of your company. They live and breathe the key messages day in and day out. They are embedded in your business. They know the CEO and executives well – maybe even play a game of ping pong with them each day. But employees come with a price tag that is bigger than just their salary. They need benefits (medical and dental), probably want stock options and some form of a 401k plan. They need a place to sit, a computer and some basic office supplies. If you are a bootstrapped startup or on series A funding, this can feel “risky” if you aren’t sure about the value of PR to begin with. Luckily, there is an alternative and I cannot say this enough – IT’S THE BEST OF ALL WORLDS.

Get what you need

We’ve recently encountered companies coming to us out of the blue – without prompting. When I ask why they proactively reached out, the answers are always the same. “You get it!” PR has historically been flawed as outlined above. 14 hours per week for $15k a month? It’s highway robbery.

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