After being “raised” in a large company (Johnson & Johnson) where budget wasn’t a concern, my go-to strategy was always to outsource PR. In fact, in all my roles prior to TaskRabbit, I relied on outside agencies to manage my PR programs. In nearly all these roles, the relationship with the PR firm was a productive one. Since I didn’t have extensive experience in traditional media, it was a good training ground for me to learn how to leverage PR to achieve my marketing goals.
Almost immediately upon joining TaskRabbit during the seed stage, something instinctively told me that outsourcing PR was not the best approach for us. At the time, the idea of the sharing economy was nascent - hiring strangers to come to your house to help with tasks was a radical concept. Establishing trust and credibility with our users and the broader public would be key to our success. After getting a few early press hits, it became clear that PR would be a huge marketing channel for us because it helped us do exactly that. I took the plunge and brought in my second full-time hire - an in-house PR manager.
He was a great hire - not only because he’s one of the best in the business but also because it gave us full control over one of our most important marketing channels. Having this function in-house early became a true differentiator for us, letting us punch way outside of our weight class across several earned media channels, including speaking engagements, accolades, and top-tier press coverage. Over my nearly six years at the company, we were featured on the Today Show three times, had a 3-minute feature on World News with Diane Sawyer, had Katie Couric run around NYC as a Tasker for her daytime talk show, Katie, were voted the “next big thing in tech” by The New York Times, and gathered many more press hits and accolades. Our internal management of and intense focus on PR were the main drivers of this success.
That was the best solution for us, but what’s the best solution for your company? Do you manage PR in-house or do you outsource to an agency? It’s a weighty decision with a lot to consider - the financial cost, your existing team and their respective skill sets, the resources and time required to find the perfect candidate or firm, and more.
Below is the consideration set I often share with our portfolio companies as they wrestle with this decision:
1. The world has changed.
Journalism in general - and tech journalism in particular - has changed dramatically in the last decade. After the great recession of 2008-2009, there were changes in the world of journalism as newsrooms shrank significantly. Meanwhile, the number of startups and companies looking for media attention surged. As a result, there are more and more companies bombarding fewer and fewer journalists with news every single day. Check out any journalists’ Twitter feed and you can get a sense of how overwhelming this dynamic can be.
And then there’s the news beyond business and tech. Politics has always been noisy but today’s political news is louder than ever. It’s tough to break through the incessant news creation of today’s new normal.
For a pitch to get through the noise and earn a journalist’s attention, it has to be highly relevant and targeted to that particular journalist. Because PR agencies by nature are responsible for “repping” multiple clients to the same journalists, they must prioritize their pitches. If you aren't the “big fish” for the agency or consultant, your pitch is often not prioritized. An in-house PR manager doesn’t have this issue - it will always be their top priority to get your news in front of the few journalists that might genuinely be interested in covering it.
2. Relationships matter.
Relationships with media are harder to build given all that was discussed in point #1. Given the incessant noise that journalists are contending with, the opportunities for coffee chats, dinners, meet-and-greets, and other touch points are few and far between.
Consequently, it’s more important than ever to build these relationships internally; if the opportunities for relationship building are limited, maximize them by owning them. I’ve found that building a relationship with a journalist in-house versus relying on a PR firm to do so pays dividends in the long run. In the early days of TaskRabbit, I personally nurtured a relationship with a producer at ABC, which ultimately led to the World News with Diane Sawyer feature.
3. Team.
It’s important to consider the structure of the team that you currently have in place and the skill sets available to you internally. Are you as founder particularly knowledgeable about PR? Do you have long-standing relationships with press already? Or perhaps your head of marketing has deep experience in PR. If you have resident knowledge of PR and how to use the channel strategically, it probably makes sense for you to hire a more junior resource to manage the day-to-day (i.e., media outreach, pitching, content generation). You have less of a need for the strategic advisorship from a full-service agency. Another benefit to building the PR expertise in-house is that this will help you get more value out of a PR agency in the future.
4. ROI = ?.
The monthly retainers for full-service PR firms typically range from $25k to $30k. That’s $360k per year, which is steep! Meanwhile, you can hire someone at the manager level for a fraction of that cost (roughly $100k-150k per year in SF). There are huge benefits to having an internal PR resource. This person will be solely focused on your business - and not prioritizing another company’s pitch over your own. Given the realities of an early-stage company where things are changing so quickly, it’s important to have someone who is in the trenches and understands the product as well as the target audiences (customers, investors, employees, partners) fully. I’ve found that this results in more nuanced and effective storylines.
Keep in mind: media coverage can never be guaranteed. Be skeptical of anyone - firm or internal hire - who commits to a certain number of press pieces. Securing coverage is HARD… for everyone. Given this, it makes sense to optimize for what you can control - money spent. Meaning, minimize the numerator (PR cost) in the ROI equation because the denominator (press hits, for simplicity) are so hard to predict.
For all the reasons above, it’s often more effective for early-stage companies to manage PR in-house versus relying on an outside PR agency. For a much more attainable and reasonable price, you can build a PR team in-house that has the potential to be a real differentiator for your business.
As always, I'm available to chat about your PR strategy or anything else marketing related. If you have any questions or comments, feel free to reach out to me at jamie@fuelcapital.com.