Many retainer-based PR firms today tell you the value of a well-placed article in a key publication is worth three times the rate charged to place a similarly-sized ad. Even if that’s true (and I’ve yet to find an objective reference to back that up), I don’t think that’s good enough. While I agree agencies like mine that operate on a Pay-on-Performance model should tie their revenues to article placement, stopping there only measures part of the value. So allow me to detail this further.

First, agencies should only charge for positive or neutral articles placed. By neutral, I mean that the piece should provide equal space for a company’s value proposition and key messages than any and all opposing views. Second, the media outlet that placed the publication should be one that the agency and client agreed to go after in the first place. For example, a commercial real estate company should not have to pay for an article that ran in “Boy’s Life,” or some other publication that has a completely different audience than its customer base.

Third, simply counting the number of articles placed for a company is not enough in a perfect world. Like any marketing initiative, it’s the action taken by the targeted audience that ultimately counts. If possible, clients and agencies should try to measure how people responded, such as how much did qualified Web traffic increase and how many more customer, partner and investor leads did the company attract. Doing this effectively will require the implementation and understanding of Web analytic and Customer Relationship Management systems as well as systematic and regular measurements of brand equity through targeted surveys and focus groups.

Fear not - for in today’s world, the costs of setting these systems up can be minimal with the availability of free services such as Google Analytics and SurveyMonkey.com. Rather, the more challenging aspect of this will be integrating a company’s sales and marketing strategies to ensure that they are in lock-step with one another.

So is doing all this in a Pay-on-Performance model worth it? You bet it is! Here are just some of the benefits:

- PR efforts are better targeted
- PR initiatives are better aligned to corporate initiatives
- The agency is incentivized to deliver quality, positive stories as it directly impacts its revenues
- Sales cycles are shorted
- Effectiveness of such “soft business” aspects are understood and quantified.

Coming next: Part III: Measuring the Value of Pay-on-Performance in Event Marketing/PR initiatives.