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Should Startups Spend On A PR Agency?

Should Startups Spend On A PR Agency?

Startups have a hard time selling their product because they are startups. They’re small, and no one has ever heard of them. They don’t have a brand and have to compete against established players. Most people aren’t willing to buy their products, because they’re not sure whether the start-up will still be around after a few months.

This is why startups invest in PR and advertising, in the hope that this will give them the brand name recognition they need.

This seems to make sense – after all, if people hear about you, aren’t they more likely to buy your product? Isn’t this what all big companies do?

The problem is that it’s extremely easy to spend tons of money on PR activities – and most of this gets wasted. They are pretty much hit-and-pray efforts, and it’s hard to track if they provide a decent ROI. It’s very easy to get seduced by the ease of doing PR, and this lures many founders into a spending trap.

PR: The Spending Trap

When the PR agency sends out a press release and this gets covered by print and online media, reading his name in the media goes to the founder’s head. What compounds the problem is that he gets congratulatory calls from friends and family members, and he start believing – “Wow, PR is a great way of creating more awareness and publicity. After all, there must be a reason why all the large brands do it, and I should learn from them. ”

PR is much cheaper than advertising, and which is why they employ a PR agency or a media firm in order to get more written about their startup.

The problem is that PR firms are very good at promising you the earth and the moon. After all, don’t forget that they’re very good salespeople. They prove how effective they have been, by showing how many column centimetres of press they have been able to get for you. The digital agencies show you how many tweets they’ve published on your behalf and many Facebook likes they’ve got for you.

Unfortunately, none of this translates into increased revenue! While it’s very easy to spend the money – and PR agencies are very good at helping you do this – you may end up burning a lot of it very quickly without realising that you’re not getting an adequate return on your investment.

As a startup, you need to be very frugal about conserving cash. The secret is not to get greedy and to understand that it takes time to grow your company organically. Trying to attract media attention by taking shortcuts will hurt you in the long run, because the only people who make money on PR are the media and the PR agencies – not the startups! You should only do PR if you are smart and can do your own PR for free.

[This post by Dr. Aniruddha Malpani first appeared on LinkedIn and has been reproduced with permission.]

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