Is Sending Out a Press Release Really Worth the Money? The press release industry generates a lot of money-but it might not hold any value for your business.
This story appears in the December 2017 issue of Entrepreneur. Subscribe »
So you hired a PR firm. And on the eve of your first big announcement, your new rep lays out a plan for a press release. This press release will go everywhere, the rep says, to thousands of outlets, with a potential audience of nearly 100 million people. He gives you a lot of other numbers as well. You don't quite understand them, but then you're not a PR person, and 100 million people is a lot of people. Sounds great, you say. And out it goes.
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You've just participated in the press release industrial complex, a system in which the only guaranteed outcome is that public relations agencies, newswires, distribution services, content aggregators and media companies all make money. One company that distributes press releases, Comtex, says it processes up to 80,000 of them a day. Kevin Akeroyd, the CEO of another such firm, Cision, says, "The overall volume of press releases both in the U.S. and globally, as well as price per press release, is at an all-time high."
But, what about you, the entrepreneur paying for all this? The value you receive is less certain. To understand why, first you need to understand how this system works. Which means following the money.
Everything starts with the PR firm, which will charge an entrepreneur hundreds, even thousands, of dollars to write a press release. Then the firm will use some of that money to distribute the news through a variety of "press release newswires."
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Pricing varies, but one such firm, PR Newswire (which is owned by Cision), has a program that charges customers $795 for the first 400 words of a release and then $205 for each additional 100 words. Once a press release is posted to a newswire, it gets distributed to top-tier outlets such as the Wall Street Journal, Yahoo Finance, CNBC and MarketWatch. But, that doesn't mean it arrives as editorial coverage, where it'll be promoted through, say, Yahoo Finance's social media accounts. Rather, it will most likely be posted to an automated section dedicated to press releases. The areas are clearly labeled; MarketWatch, for example, has "Press Release" written at the top and "The MarketWatch News Department was not involved in the creation of the content" at the bottom. (There are also middlemen at work that, frankly, are too complicated to get into here. But, they make money, too.)
These press release sections -- some of which newswires pay to post on -- don't get many readers. They serve mainly as a way to drive incremental ad revenue for the publishers. Nevertheless, there are enough of them that the newswires can produce impressive-sounding audience numbers -- often by tallying individual websites' total monthly users, rather than the actual number of people who viewed the press release. Clients who use PR Newswire, for instance, may get a 32-page report full of charts, numbers, brand-name journalistic outlets and feedback like "Your release has generated 245 exact matches with a total potential audience of 90,730,143" -- which is an exact quote from a report one publicist showed us.
Little of this, of course, creates actual news. Instead, it creates "the optics of news," says Jon Bier, founder of Jack Taylor PR. "I don't think the people picking up press releases are journalists wanting to write about that product. They're websites designed to pick up press releases so PR folks have websites to show they picked them up. It's an industry speaking to itself."
"It's become borderline useless," says Ed Zitron, CEO of EZPR, a San Francisco-based media relations firm.
Take the following press release, which ran on one of the press release newswires, BusinessWire, and was picked up by MarketWatch: "State Street Global Advisors Strengthens U.S. Intermediary Sales Team." The release ran on Yahoo Finance, NASDAQ.com, The Street and 21 other media outlets -- mostly random local radio and TV news station websites (like KEYC in Minnesota and NewsChannel 10 in Amarillo, Tex.) that have nothing to do with banking, or Boston, where State Street is located.
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Jason Kintzler, CEO of Pitchengine, a company that builds tools to help PR folks better connect to audiences, believes many PR agencies are fleecing clients by leading them down this path. If you're blasting out a press release to everyone, he says, it's exclusive to no one, and the likelihood of a reporter being interested in a story -- typically the main objective of a press release -- drops. Real coverage is then replaced by a bunch of metrics many people don't understand. "Part of it is that -- as an industry -- we're lazy," Kintzler says. "Many people are just going through the motions: I do it. The clients are happy -- it says it went to a billion people."
Press releases do have their defenders. Some PR folks argue that releases provide trustworthy information for reporters. The theory: Reporters can most likely trust a press release from Procter & Gamble because the information should have been vetted through legal and compliance teams. And press releases can serve a purpose -- legal requirements for public companies, distributing important information in one fell swoop or increasing the odds that a company's official statement will appear in web search results. "Press releases are still useful communication tools that media and analysts and financial reporters reference," says Jacqueline Chen Valencia, partner at the marketing and communications firm Connective Agency.
They can now also be directed to the right audiences, says Akeroyd, CEO of Cision. He says press release distributors are now "SaaS-ifying" -- modernizing to work more like targeted advertising. Instead of blasting a release out into the void, he says, companies can now use data to theoretically reach better audiences, and PR agencies can now track the efficacy of a press release, measuring not just the reach but the actual revenues driven by the press release.
For example, let's say I'm a CEO. My ad folks come in and say they bought a trillion impressions. From those trillion impressions, we got a billion clicks. Those billion clicks turned into a million website visits, which turned into 100,000 sales. On the other hand, my PR people come in and say we got "covered" in Yahoo Finance and 400 other places. They talk about coverage and share of voice, not actual sales. It's vapor. But, with better data and measurements for press releases, Akeroyd argues, the PR people can better measure how their press releases supported broader business objectives.
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So where does that leave you? Simple. If you feel you'd benefit from hiring a PR firm, ask a lot of questions. What model will it follow for press release distribution? Is there a strategy? Can it be attached to hard revenues? Can it demonstrate fruitful relationships with actual human journalists in your actual field who have written actual news stories about other clients? If not, keep looking.
"Our job is not to throw information against the wall," says Bier from Jack Taylor PR. "It's to tell a story to the right person at the right place at the right time. Spamming on the wires can't do that."
