How to Create a PR Budget That Supports Your Strategy
By Scott Goldberg
Published November 2, 2023
It’s the end of the year and we’re as busy as ever planning for 2024 alongside our client partners. That means a lot of strategic budget discussions, as many of our clients turn to us for guidance on how best to prepare their marketing and PR budgets.
As a rule of thumb, your marketing budget should be roughly 10-20% of your annual revenue. (This number tends to decrease as a company grows: Deloitte’s latest CMO survey found that marketing budgets account for an average of 18% of revenue for companies with less than $10 million in revenue, compared with an overall average of 9.2%.)
But arriving at a budget is about more than arriving at a number. The right marketing and PR budget for your organization depends on a lot of different factors.
Here are 5 ways we advise clients to think about budgeting for a year’s worth of marketing activities.
PR Budget Breakdown
1. Think holistically about your strategy and budget.
Our recommendation is always to determine your budget in relation to your strategy. Start by asking: What did and didn’t work this year? What goals are we trying to achieve next year?
Don’t limit yourself to thinking about goals only in terms of sales and revenue. For example, you might want to build up excitement internally ahead of a company milestone or drive buyer interest for a product launch.
With your goals in mind, consider the role PR will play — not in isolation, but as part of the larger overall marketing strategy. PR is much more than just media relations, so consider how it will integrate with other aspects of your marketing program.
I was once involved in the launch of a toy company with a Rihanna concert at the Times Square Toys ‘R’ Us. Which part of your budget covers an activation like that: PR, events, or advertising?
It’s a mix, and every team involved should contribute. When you look at your PR budget breakdown, different areas often come into play. Oftentimes, PR initiatives have overlapping elements to them. You may need to account for advocates, experiential moments, or more, all in the same campaign. Be open to moving money from one budget area to another if needed to make the greatest impact possible when working with an integrated activation.
2. Look for opportunities to maximize your budget.
Your PR budget will vary depending on your organization, your audience, and where you are in your growth cycle. That being said, every type of company can find ways to maximize the role of PR in their marketing budget, no matter the size.
As inflation decreases advertising ROI, marketers are facing more pressure to “do more with less.” Startups can get the biggest bang for their buck by spending most (if not all) of their money on PR.
For example, PR is the most cost-effective form of marketing for startups for a few reasons:
Efficacy: When you’re new on the market, PR is the most effective way to educate your industry and build credibility. (What do you trust more: an objective story by a reporter or a paid advertisement by the company?)
Cost: It will cost you more to buy 20 ads than to work with a PR firm to get 20 pieces of coverage.
Longevity: When ads end, they’re gone, but media hits last, in many cases, forever.
One of the most economical marketing tactics for consumer brands is simply getting your product into people’s hands (sampling). They see it, use it, and share it with friends, family, or colleagues.
For the cost of giving away a product, you can get a loyal advocate. Work with your PR agency to leverage and amplify your advocates, or even create them.
3. Plan a regular cadence of PR activity throughout the year.
Marketers have the wrong perception that if you get one big, national media hit, you’re set for the year. Just like in music, a one-hit wonder isn’t as enduring as a bunch of smaller hits that lead up to and follow a tentpole moment.
When our client Droyd, a manufacturer of children’s rideables, came to us at the end of 2022, we kicked our partnership off with a sustainable PR approach to introduce their current products (and eventually new ones) to the market.
Building awareness: In Q4 2022 we began building basic media relations to get both attention and product reviews. This grew into strategic coverage in trade publications to help build urgency in the retail community as well as national TV hits right before the holidays. This got Droyd in front of the eyes of millions of consumers in outlets like CNET, BuzzFeed, and more.
Staying always-on: In between new product announcements, we continued our proactive pitching with evergreen angles. Through trendjacking and social listening, we secured placements in product roundups and holiday gift guides, along with turning focus to award submissions to keep coverage flowing.
Maximizing efforts: In 2023, we’ve amplified these efforts. Droyd partnered with industry experts and participated in media events like the Holiday Gift Guide Show, Toy Fair, and our franchise event Carve-X (An interactive experience where our clients’ products were displayed the way they’d be used at home). As we approach the holidays, we’ve locked down paid national TV opportunities.
As a result of this sustainable outreach, Droyd nailed down national retail distribution in Target, among millions of impressions. Without a great product and a layered approach to reaching the target audience, this result wouldn’t have been possible.
You also don’t want to put all of your eggs in one basket. Plan for multiple tentpole moments — and plan for how you’re going to fill the space between them. Take time every month to review progress and look for opportunities to maximize the impact of the last big hit or work up toward the next one.
4. Leave room to be opportunistic.
Speaking of opportunities, your PR budget should leave space for flexibility.
Some of the most exciting opportunities are unexpected — a speaking role opens up when a speaker drops out three weeks before an event that was fully booked three months ago, or a morning show has a last-minute opening to feature a product. Set aside 10% of your budget as a pool of “opportunistic” dollars to give yourself the flexibility to take advantage of them.
5. Trust your partners.
Turn to your agency partner for advice on budgeting for PR. Agencies (good ones at least) bring perspective from working with many different types of organizations, and they can help you think strategically and creatively about how to make the most of your budget.
They’ll help you understand what’s newsworthy, identify “white space” that your competitors haven’t touched yet, and integrate PR into the rest of your marketing plan. Remember, your agency speaks from experience: take their recommendations to heart.
No definitive guideline on budget will make sense for every organization. Your PR budget should depend on your industry, your goals, and your audience, as well as your prior efforts. Make it a priority to measure and analyze this year’s initiatives regularly so you can make more informed decisions about what to invest in next year.