“If you spend less than £3,000 a month on PR, you might as well not spend any money at all.” This extremely bold statement spoken by fiery Dragon’s Den entrepreneur Deborah Meaden was used to dismiss a pitch from Vini & Bal’s, an Indian sauce company on the hit BBC show.
Meaden announced that she was ‘out’ because the £50,000 requested by the budding entrepreneurs was barely enough to cover what she believed should be spent on public relations. As essential and valuable as PR is to a company’s success, surely £3,000 a month is unreasonable?
PR is, quite possibly, the most potent and cost effective marketing tool you have. But, there are few up and coming businesses or SMEs that have this kind of finance to splash out on PR. So what exactly is the perfect amount to spend on your public relations activity?
Firstly, you need to establish how much PR activity you actually require. To do this you should create a campaign plan and list the key activities in the plan. Next identify the required PR activities, for example, how many press releases, how many press conferences etc. Once you have established how much PR work your campaign actually requires you can begin to envisage what kind of budget is acceptable. There is no point in getting the best, most expensive PR contract if your public relations task list is only small.
An American study by Spread the News PR revealed that 39% of businesses believe $3000-$5000 per month is the best amount for a professional PR campaign. Whereas, only 6% thought $1000 or less per month would be the adequate amount for a professional campaign.
There is nothing wrong with paying £1000 per month for your PR, like we have already established that might be all that is necessary for your campaign and you can still get publicity from lower budgets. However, the general equation for public relations is the more you pay the more you get in terms of everything – publicity, actions and results.
One of the most effective ways of spending the correct amount for your business is by finding a PR agency who reflect your business size. Generally, an agency who is similar to your company size will have rates that are affordable to you and whose capabilities are sufficient for your needs.
In terms of quality, it can be the case that the less you pay the less experienced PR executive you have working on your behalf. For example, a Junior Executive would cost on average £50 per hour, which would cost you £1,000 a month for 20 hours. An Account executive would cost around £100 per hour, costing you £2,000 per month for 20 hours work. A Senior Executive, with an abundance of knowledge and experience, would cost anywhere above £150 per hour, which is a monthly charge of £3,000 for 20 hours.
Another rule of thumb to cross the Atlantic from the United States is aimed more at large organisations. The advice comes from a University of Southern California Study and it concludes that companies should use the ratio of spending $786 on PR for every $1 million in gross revenue.
Returning to the original statement by Mrs Meaden, should a company spend £3000 minimum on PR every month? Yes and no. It is very circumstantial and is dependent on both the company’s campaign plan and need for publicity.
Returning to the original question; what is the perfect amount to spend on PR? Every company is different in terms of size, target audience and budget, therefore some may require more PR than others. Do not underestimate the effect of PR and certainly do not look for a bargain, if you need to spend £3000+, then do so. If £1000 or less is sufficient for your PR task list, then spend that amount.
Written by Kristin Hodgkinson, Marketing Manager at Direct365 – providing business services to thousands of businesses across the UK.
