- At some point, startup companies looking for the next step in their growth face the question of whether to retain a PR agency or hire their own people.
- Startup founders, PR consultants, and agency executives laid out the pros and cons of each, broke down the PR hiring process, and the cost of using an agency.
- Many startups eventually hire their own PR staff, but agencies that offer short retainers can help with early marketing and communications.
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Startup founders have much to consider in growing their businesses, and public relations is an important piece of the puzzle.
"With a new company that's emerging with venture funding, there's an expectation to scale and to grow within timelines and certain parameters," said Taryn Langer, founder and president of Moxie Communications Group, which has helped launch early-stage brands like trendy ear-piercing company Studs and canned water startup Liquid Death. "We find PR is essential within the marketing mix from the get-go."
Once a startup decides it needs a PR strategy, companies have the choice of hiring in-house or contracting an agency. Business Insider asked founders, PR consultants, and agencies with startup expertise how to decide.
A mix of in-house and agency PR help is ideal
Having a PR person on staff means there's someone who can work closely with internal teams on PR needs. But agency teams with established media relationships can accomplish large projects quickly, which is why many companies use both.
Ventec Life Systems, a medical startup founded in 2012 that produces portable ventilators, relies primarily on an in-house marketing and communications expert for its PR, but also has a small agency on a monthly retainer for media outreach, chief strategy officer Chris Brooks said.
"As we gained [FDA] clearance and started to be more externally focused, we wanted to tell our story and reach out to customers, so PR became a larger focus," Brooks said.
Acast, a podcast hosting and monetization startup founded in 2014, uses a similar mix, said Lizzy Pollott, Acast's global VP of brand. With offices in New York, Paris, Stockholm, and Sydney, it has five in-house PR pros working around the world, but uses boutique tech agencies for new launches.
"It makes sense when you launch in a new market to get that local knowledge and lean on people who have connections in the area," Pollott said.
PR can pay off for brands in the pre-launch stage, but most startups ramp up communications around their Series B
Direct-to-consumer startups typically hire an agency on a short-term basis - three-month retainers are common - to build brand awareness before hiring their own people.
"Pre-launch, it's really important to bring on PR support early," said Andrea Collins, who is the VP of marketing for Hippo Insurance, a DTC insurance company, and also advises startups on PR hiring. "Hire somebody who can help you get the word out and get a strong understanding of your product out there, and then take a step back."
Agencies can help founders make sure the message they're sending consumers is consistent with their internal positioning, Langer said. Internal communications often become available to media outlets covering startups, and conflicting images of a brand can quickly lead to negative press.
Case in point is Away, the DTC luggage company that was the subject of an investigation by The Verge in December. The Verge described a toxic work environment that stood in sharp contrast to the company's image of nice vacations and inclusion and which led to the CEO Steph Korey stepping down.
While agencies can help with a company with branding, hiring an agency to do media outreach too soon can be a waste of money, said Starr Million Baker, co-founder and CEO of Ink Communications, who also mentors startups in the Techstars accelerator program.
"Most startups really should not be looking to hire an agency until they have Series A funding behind them and they're looking at Series B," Baker said.
What to expect from agency pricing and account staffing
Startups should expect to spend at least $5,000 to $15,000 per month on a PR agency based in New York, although Langer said San Francisco-based agencies tend to charge more.
Prices also differ based on what the startup needs. Short projects like writing press releases for one product push cost less than something like a launch spread out over two months.
Most boutiques that work with startups charge up to $25,000 for intensive work like longterm launch projects, Baker said. Mid-size to larger agencies with thousands of employees globally start at about $30,000 per month, Collins said.
Hiring an salaried employee generally costs less month to month than having an agency on retainer, which is why Ventec Life Systems only hires an agency when it needs assistance on a specific project, like pitching to media after its medical device was approved by the FDA, Brooks said.
"Agencies are usually not cheap," Brooks said. "They're generally not going to work for a small retainer, and if they do, you're not going to have their full attention."
But one employee can only do so much, and with DTC brands, building media lists and reaching out to reporters is important to a company's launch, and an agency can be worth it, Collins said.
In assessing an agency, founders and executives should meet their potential account teams and know who would be spending the most time with the account, Collins said. They should also know how agencies report results such as media placement statistics, beyond unique pageviews or circulation.
Agency structures can vary, but a typical account team includes a high-level director overseeing strategy, a few senior account executives and account executives handling media and influencer outreach, and a junior-level account coordinator for administrative work, Langer said.
Baker said to keep costs down, she counsels startups not to sign long-term contracts with agencies until they have Series A funding and are close to Series B. Such contracts make sense for more established companies looking to build trust with an agency, but startups can sacrifice that relationship for high-quality, short-term work.
When a startup starts to generate interest and customers, it's a good time to capitalize on momentum and make PR hires, Baker said.