Procurement teams are playing a bigger role in how companies manage PR agency relationships. Templated rate comparisons, reverse auctions, and cost-plus pricing — tools built for sourcing commodities — are increasingly applied to PR engagements. Our position is that these tools weren’t built for what PR agencies deliver and applying them without adaptation creates risk for both sides.
Rigor and fair process benefit everyone, but it’s critical to know where standard sourcing practices help a PR engagement and where they undermine it.
Extended Payment Terms Function as Agency-Financed Credit
Large corporate buyers increasingly request payment terms of 90 to 120 days or more. Framed as standard procurement practice, this shifts a real financing cost onto the agency. Payroll is due every two weeks regardless of when invoices clear, so extended terms mean an agency is effectively lending money to its own client — tying up capital that would otherwise fund talent and client work. Our guidance treats payment terms as a distinct commercial issue, separate from scope and fees, and encourages agencies to set clear standards before accepting terms that strain their business.
Cost-Plus Pricing Doesn’t Map to How PR Firms Operate
Cost-plus (labor-based) compensation — building fees from disclosed, “built-up” hourly rates by staff level — is common in other professional services categories but structurally mismatched to PR. PR firms run leaner staffing and carry higher indirect costs relative to revenue, and fees are typically their only revenue source. Cost-plus models create pressure to discount junior time and inflate senior rates, pushing agencies toward less senior involvement — the opposite of what clients are paying for.
Reverse Auctions Commoditize Work That Isn’t a Commodity
Reverse auctions — competitive processes where suppliers bid prices progressively downward — are increasingly used in marketing procurement. They work well for interchangeable, price-comparable goods and services. PR counsel isn’t that. When a reverse auction follows a strategic RFP, the basis for selection shifts from differentiated thinking to price compression, disadvantaging the agencies most likely to deliver strong outcomes.
Fair RFPs Require a Few Structural Basics
Beyond pricing mechanics, our guidance addresses structural gaps that create unfair conditions: RFPs issued without a budget, briefs lacking the context agencies need to think strategically, undisclosed evaluation criteria, pricing negotiations introduced after the strategic work is done, and open-ended holds on pricing and teams after submission. Addressing them produces stronger proposals and a more defensible process for the client as well.
What This Means in Practice
Procurement and PR share the same end goal: agency relationships that deliver real value and hold up over time. Getting there means adapting sourcing practices to fit what’s being bought — strategic counsel and creative work, not interchangeable inventory.
The PR Council has developed detailed guidance for member agencies navigating these conversations, including frameworks for raising these issues productively with procurement and client counterparts. Learn more about PR Council membership →
The PR Council is an industry association supporting PR agencies through advocacy, education, and resources that help members articulate and defend their value.
