Is the price for PR right in India?
PR is evolving at a very swift pace, yet the pricing of PR is evolving at a very slow rate. Inspite of the wide range of integrated services now on offer, the retainers itself are flat.
Neha Mathur Rastogi, founder and CEO, WordsWork says bluntly, "Retainers have definitely flat-lined in PR. I don’t see too much of a shift from even as much as a decade ago. The industry as a whole needs to really put their heads together to emerge from this dilemma."
Bhavna Jagtiani, national director of Operations - Edelman India opines that "Storytelling in today's multi-media landscape is increasingly deep-rooted in data and insights, driven by real-time monitoring across social media platforms. The constant developments in the online landscape have led to PR services to become more real-time than ever. While the planning and execution is happening on a multi-dimensional basis, budgets are still allocated for PR services through the traditional lens of media relations. Under-pricing is an unfortunate reality and we just have to be bold and compelling in demanding the price against the value we are providing to our clients."
The value of PR is undeniable.
Aakriti Bhargava - co-founder - BoringBrands and Wizikey, believes, "PR is a great growth hack for businesses to grow - it is the most affordable way of creating trust and traction - however, lack of standardisation results in ambiguity - I think we are easily under-pricing our retainers by 25 to 30% - which is the business loss of the industry owing to no standardisation in measurement. Imagine - if this is done - our industry would overnight grow 25% more - to more than 2,500 crore rupees."
While globally, a standard measurement for PR remains a silver bullet, firms have devised internal metrics that can measure impact to quite an extent.
Rastogi points out that, "A big challenge is of course directly related to the measurement of return on investment which I don’t think can ever be convincingly precise in the case of our sector."
The Undercutting challenge
Given the unorganised nature of PR work and low entry barriers for a new firm, undercutting is a problem while trying to hold the price line steady.
Bhargava admits that "Unless we see more adoption of PR in India, undercutting will continue to happen. It’s a sheer case of demand and supply. However, we should create more demand with the help of pay per use solutions. This would enable the industry to move from using PR tactically to strategically. Top this up with lack of measurement in a digital era, and we find undercutting of PR pricing, as the same budgets can be allocated to digital."
Kunal Kishore Sinha, founder director, Value 360 Communications, however, shares that he would not drop his retainer prices to below a specific defined threshold per month.
As per Sinha's analysis, the undercutting happens more by upcoming PR firms, not too well-established PR firms. A large PR firm, he believes, would only undercut to make an entry into a category they have may have not worked in and want to do so with a prestigious brand."
The variable component of payments, integrated PR is rising
Sinha, says payment for variable output has gone up. He also adds "Retainers are not less for integrated PR work. Good brands are paying the right price."
He further adds, "Industry categories such as consumers brands pays well. And for work such as influencer management and paid engagements, brands have started using PR agencies which adding to the PR firm’s revenues."
Anil* ( name changed), senior corporate communications lead in a leading financial organisation in India confirms both Rastogi's and Sinha's views saying, "Retainers are flat but there is a rise in outcome-based pricing. Incentive pricing is being paid for more consulting based work, for internal brand building for thought leader and placement of CEOs at forums such as Davos by PR firms."
Anil* explains that internally companies have raised budgets by 10 to 12% for categories such as digital and social media, CSR communication and internal communications."
Nitin Mantri, group CEO, Avian WE and president, PRCAI, agrees that "If you are able to value add and offer integrated PR work you can demand a good fee. If you are just offering traditional PR then that is commoditised."
Time for billable hours to be the norm in PR?
In-house corporate communication leads say that firms are willing to pay more for strategic consulting PR work.
Rastogi says payment for consulting work should be pushed further beyond the retainer against deliverables models, "I think the biggest challenge is that despite being more suited to a consultant billing system many of us still price PR as a commodity with set deliverables. There is a lot of time that is spent in advisory aspects which we ourselves as an industry in India undervalue. Compared to other consulting professions we should begin to benchmark our pricing basis our role as communications consultants."
Mantri also believes that the billable hours model is better suited for what PR 4.0 is delivering. He points out that" We manage the reputation for our clients, we are consultants. There should be a billable hours system. But we haven't got there yet."
Mantri elaborates that, " Every PR firm does bill for time as part of the overall cost. The hours of a PR executive spend in consulting work should be properly billed. If the work can be defined so can the bill for hours."
The future of PR
Sinha believes that in 5 years PR will become a key business function with a multi-stakeholder management role.
Rastogi concurs saying, "PR has the potential to sit on top of all marketing communications in an advisory capacity if we push the power of messaging. Building articulation and messaging as a core strength which drives the entire external communications suite would give an edge for sure. Additionally bundling natural extensions like influencer management, content creation and digital communications will also allow for a more robust billing capability. A healthy mix of tangible services along with a well crafted consulting role would make for an ideal PR mandate in my mind."