Is Sending Out a Press Release Really Worth the Money?

Is Sending Out a Press Release Really Worth the Money?

This press release will go everywhere, the rep says, to thousands of outlets, with a potential audience of nearly 100 million people. You don't quite understand them, but then you're not a PR person, and 100 million people is a lot of people. 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. 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." 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." 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. 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. 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. Some PR folks argue that releases provide trustworthy information for reporters.

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Is Sending Out a Press Release Really Worth the Money?

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.

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.”

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…

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