Our good friend Todd posted a very good piece on how PR helps raise venture capital. In it, he quotes a survey from BIGfrontier Communications that has the following statistics:

Startup companies that engage in PR campaigns are 30% more successful in getting funding within one to three months than those that don’t.

Forty-four percent of the respondents who used PR outreach received funding in the one-to-three-month time period versus 14% of those that did not.

Seventy-eight percent of respondents who said PR helped in their funding efforts are planning to use some of their VC dollars for additional PR.

Ironically, the survey also found that only 18% of the 300 startups surveyed had a PR program in place during the funding process.

So it begs the question why dont startups employ PR as a marketing strategy early as they can? Or why dont they hire a PR agency quicker?

Running a startup myself and having a background in Marketing, I can tell you my main reasons are the following:

1. PR is not easy. Putting an ad campaign on Google for paid adwords is dead simple. Buying a target email list is relatively easy. Putting together an email campaign (or a poorly conceived spam campaign) is easier. Attending a trade show and putting together a booth to attract customers is easier than having to build relationships with reporters and bloggers. PR depends on people. Other marketing forms are dependent on money and processes. Entrepreneurs who have a background in technology prefer working with things that are predictable (since everything else about the startup is unpredictable).

2. PR takes time. That’s the one thing entrepreneurs and smaller companies dont have enough of. Yes, everything takes time and there’s a return on time (ROT, not ROI) and PR does provide a great return on time. Only if you have done it before can you navigate the landscape. Most first time entrepreneurs have not.

3. Hiring a PR agency is “expensive”. The average quote from any good PR agency you’d get for even a 2-5 person startup is $10,000 a month in Silicon Valley. I can do a Google ad words campaign with less than $100 budget per month. Here’s the funny part: If that becomes $300 budget daily, that’s as much as PR. But its in bite-sized chunks.

4. PR requires specialists. The first marketing hire is paid to “put together a website, manage a trade show booth”. There are not enough qualified PR individual consultants to help smaller companies with smaller budgets.

5. PR is not tied to the lead generation process or the board level agenda. PR generates awareness and that’s not easily accountable. In my board meeting every month, I get asked about my lead generation funnel. Never have I been asked to show the recent press clips about the company.

Finally, making your mark through the noisy world right now is tough. There are innumerable startups in any given field and there’s way too much noise with multiple companies providing the same message and solutions. Given that reality, how is spending on PR justified if you are going to be yet another startup in the crowd?

Having identfied the reasons why entrepreneurs dont invest in PR, we’ll follow this up with possible solutions for how the PR world can adapt to the challenge in a future post.

If you are a Web 2.0 or a social software startup trying to either launch a product or your company, getting relevant Buzz or Press is absolutely important. Long known to be the most cost effective means to generate awareness among potential users, PR gives you the sense of “arrival”. Notice I said cost effective NOT least expensive.

If you have been in the market over the last 2-3 months you already know that the best Web 2.0 PR folks, like Jeremy Pepper or Brian Solis (Disclaimer: Brian’s a cofounder at BuzzGain) are either already taken, or they are very expensive (most charge $10,000 minimum per month, or freelancers who charge $5000 / month). So if you have read about Do It Yourself PR and think that might be the best way to save some cash, the question becomes who (all) do you target to get good coverage.

The usual answer I hear is TechCrunch. They are no doubt the best, but you cant put all your eggs in the TechCrunch basket. Make a good target list just like you would for potential investors or customers.

It does not take a rocket scientist to figure out these folks should be on your list (In no particular order).

1. ReadWriteWeb

2. Mashable

3. Chris Brogan

4. Scobleizer

5. Jake McKee

6. Jeremiah Owyang

7. Webware

8. Louis Gray (Disclaimer: Louis is associated with BuzzGain)

9. Giga Om

10. VentureBeat

The best case situation is to brief them all. But if you dont have time, (which is strange, but not out of the ordinary) then how would you select which ones to focus on? Also remember each of these folks likes exclusives, so it does not hurt to focus on a subset each time.

If you follow the simple rule of thumb that you shoud focus on the ones with the most traffic to their site, I contend you will not have achieved your purpose – which is to get the MOST number of people to effectively have a chance to learn about your offering.

So what metrics do we apply? As we talked about blog authority and influence before, there are a whole host of other criteria, but here are the 3 that I would consider the most important.

1. Sentiment: Of the lot, ReadWriteWeb, Mashable and Chris are the most positive. Their article sentiment ratio is around 50-65% – very high and even with things that are not great, they accentuate the positive.

2. Outlinks: The number of links back to your site will give you a chance to convert awareness from PR into “potential leads” or prospects. The best link to post ratio (# of links per post) come from Louis, VentureBeat and GigaOm.

3. Engagement: Thanks to tagging, bookmarking, sharing Google feeds, tweeting, etc. you have the potential to reach a larger audience than visitors to your blog. So this extended audience should be counted into the overall metric for an individual’s reach. For extended reach Scobleizer, Chris and Louis are the best. Not only do they have a great number of followers on Twitter, friendfeed, delicious, etc., but their users are more engaged, clicking on links sent by these three than others.

So, if you had to make a call on exclusives, no doubt, focus on Rafe Needleman, Om Malik, Michael Arrington. Your best bang for the buck (for actual users) might come from some of these others.

There are over 50 social bookmarking websiteswhich primarily perform the function of allowing users to bookmark, share and annotate the web. We track 10 of them includingDelicious, Ma.gnolia.com,StumbleUpon, Diigo,Backflip, Blogmarks,Clipmarks, Furl, Simpyand Buddymarks.

We wanted to capture the value and difference of these sites not as a user of social bookmarks, but more from the standpoint of generating viral behavior and target specific audiences. To that end we also wanted to make some recommendations on which sites provide you specific value and hence might be a better use of your time to target and nurture the users of.

The value these bookmarking sites provide includes:

1. Traffic increase: If you get StumbledUpon expect a significant traffic increase within a short period (bursty) followed by a lull.

2. Relevance and link priority: As users tag your blog post or web page, they add their own filters, which help you understand a) your brand perception and b) your relavance with that communities sphere of influence

3. Ability to understand and create your early adopter base. For our solution, it was relatively easy to find out the users who bookmarked the content, hence were very interested in the relevant solution and would be keen on learning more when the beta was available. We built our entire list of 1033 beta users to provide us feedback on our product based on who bookmarked us and who they recommended us to.

Here are the recommendations:

1. Most # of users: Delicious and StumbleUpon are way ahead of the pack. StumbleUpon users tend to be more casual users and the traffic you’ll get will be fast and swift. Delicious traffic is more like a simmering pot, but depending on your content can get you

2. Topic focus: If you are an enterprise software company, Diigo and Backflip have the most users with content relevant for that space. ForMusic, Furl and BackFlip do a great job, and for Lifestyle topics Blogmarks is the most extensive. Its probably a function of the initial users and their likes / dislikes, but the content relevance for those topics is the most in those sites. Health related topics makes Delicious and Clipmarks the best. Finance related topics are most frequent onFurl.

3. Speed of propogation (Virality): Although Delicious has the most users, StumbleUpon, Furl and Diigo have the fastest velocity to user traction.

What do you think? Which ones do you use and why?

Page 23 of Jeff Jarvis’s summary presentation on What Would Google Do?, the title of his new book provides the following suggestions for PR professionals – They are hopeless.

Jeff makes a provocative perspective on how to change industries and initiatives from how to think the Google way and improve newspapers, government and other industries (including Coke!), so this assertion that PR is hopeless is pretty damming. I wonder why more people have not talked about this aspect.

Love to hear your thoughts as a PR professional. Are you counting yourself in the hopeless category? Are you actively looking to change your profession? Or is Jeff just plain wrong?