Maybe you’ve never hired a PR firm before, or maybe it’s been a while and you’re just unsure of what a PR agency costs. Either way, you’re asking yourself, “how much will a PR firm cost me?” Since PR usually falls within the marketing budget, let’s start there.
To grow your position in the marketplace, a good marketing allocation is about 15% of revenue. In 2022, the average marketing budget for B2C brands was 13.7% of revenue, and for B2B brands, it was about 10% of revenue.
But what if you’re an ambitious company looking for PR to take you to the next level?
In 2023, PR hourly billing rates looked like this:
PR Agency CEOs: $439/per hour (up from $417/hour in 2020)
PR Agency EVPs billed an average of $381/per hour (up from $319 in 2020)
PR Agency Senior Account Execs billed an average of $333/hour (up from $319 in 2021)
PR Agency Account Managers: $257/hour (up from $256/hour in 2020)
So if you’re an average company, and you’re looking to maintain your position, you’re probably spending in the range of 10% of revenue on marketing.If you’re looking to dominate, your budget should be higher. A typical breakdown might be that 1/3 of the budget is advertising, 1/3 of the budget is content, and 1/3 of the budget is PR.
Ambitious startups typically allocate between 12-17% of revenues to marketing.
Large international agency budgets can be $380,000 or more annually, while a mid-range agency budget typically clocks in at $156,000-$180,000 annually and a smaller agency budget would be $120,000 per year, a mid-range freelancer could be anywhere from $36,000-$100,000 a year.
If you’re a CPG or DTC brand with a marketing spend of under $100,000, then you might consider consumer product PR sprints, which feature micro contracts that align with key buying seasons. Hiring a PR agency is an investment, but considering PR converts ten to 50% better than advertising, PR is indeed a place where the ROI pays off.
It’s safe to say that if your PR team has executive PR experience, and your agency spends an average of 45 person-hours per month on your account, your monthly retainer will be around $14,400 per month. It could be less if your team is more junior. If you require more executive hours, your fees could go up.
So, what goes into a PR agency’s fees?
According to Muck Rack’s 2021 State of PR report, the number one cost to a company for PR is the agency itself; the people on the account. This makes sense because, unlike programmatic ad spending (a typical minimum is programmatic spend is $25,000/month), PR agencies rarely have minimum spend or activation fee requirements outside their retainers.
Oftentimes, fees are different depending on your strategic objectives. For example, if you want to keep a firm on retainer for a few calls a month and no proactive media outreach, your annual fees may be considerably less. If you are trying to secure investment or you’re pre-IPO, you may find your fees are on the higher end of an agency’s fee structure.
It’s a balance to strike your budget with your goals, but when asked, I always give the same advice to CMO’s and startup founders. If your budget is $400,000 or more per year, hire an agency that does $20 million+ in revenue. If your budget is $180,000 per year, hire a boutique PR firm, with less than $10 million in revenue. If your budget is $60,000 annually, don’t hire an agency, hire a freelancer.
Odwyer PR’s annual report shows rates increased considerably in 2019, 2020, 2021 and 2023, so if your agency didn’t raise its rates during those year, you’re fortunate, but if you’re shopping, the current rates may come as a surprise; but PR Rates are expected to flatten out in 2024, so while there will be modest increases in 2024, they won’t be the big jumps we saw in the last four years.
Agencies are notoriously reluctant to share minimum retainers, but in 2013, several agency executives did just that with PR Observer, an industry publication.
“To properly scope a client program and assign the proper team support, we feel $15,000 – $17,500 per month is a reasonable starting point.”—Anne Green, President & CEO, CooperKatz & Company, Inc.
“Our retainers range from $7,500 – $50,000 or so. Crisis costs are different and generally charged by the hour with a $20,000 minimum.”—Ronn Torossian, Founder & President, 5WPR
“We have some clients that pay us $100,000 or so per year, some clients that pay us more than $100,000 per week, and many clients that pay us $100,000 or so per month.”— Mark Hass, President & CEO, Edelman United States
“Our clients generally pay between $15,000-$30,000 a month depending on the workload.”—Stu Loeser, Founder & President, Stu Loeser & Co.
- Strategies about how to stand out from your competitors using PR
- Internal and external communication strategies that match your growth goals.
- Campaign development and creative activations for marketing opportunities.
- Media relations, and securing regular media coverage, speaking engagements.
- KPI and business impact reporting.
- Copywriting such as press releases, speeches, white papers, and branded journalism.
- PR crisis planning – but not necessarily crisis management.
- Partnership strategy and potentially management such as cause, social impact, or purpose-driven PR initiatives.
- Executive training, including media training, interview prep, and research or executive ghostwriting.
- Content strategy for video, social media, and inbound leads.
- Content creation oversight, including social media, photography sessions, and video development.
- Poll or research development, implementing the poll may or may not be within the agency’s retainer.
- Peer agency coordination, such as with branding or advertising agencies.
- PR campaigns that “make the news,” are designed to create word-of-mouth or media opportunities.
For a complete list of what we would include in your PR retainer, reach out to us and tell us more about your business and your goals.
Hiring a PR agency is an investment, but considering PR converts ten to 50% better than advertising, PR is indeed a place where the ROI pays off.
(sources: Odweyer PR)