« The Slippery Slope | Main | Enough Already »
January 13, 2006
Some Stereotypes Die Hard
Tom Foremski posted a story yesterday afternoon that attempts to make the case that the PR industry is in for a big fall.
Tom makes some keen observations, which are certainly corroborated by this firm's experiences, namely,
* PR has been growing in the last two years
* PR is looking to attract staff and there is shortage of mid-level experience professionals
* Companies want media attention
However he also states that "spending large sums of money on mainstream public relations is the equivalent to spending large sums of money on advertising in mainstream media; it is inefficient in driving revenues." He contends that "the ROI of being mentioned in a story in the Wall Street Journal...makes little difference to their bottom line. Press coverage might boost the egos of company senior executives but doesn't do much for overall sales."
Here are the fallacies in his line of argument (trying to be dispassionate here, debate style):
1) PR does not stimulate sales-Tom, you are just plain wrong on this one. Note that advance publicity for XBOX and Halo is credited by Microsoft for millions of dollars of sales, prior to any use of advertising. The recent campaign for Dove on Real Beauty is credited with a sales jump in the double digit range. Without engaging media to critique and evaluate products, and build the brand's credibility, advertising lacks the runway to expand awareness of the brand.
2) PR is the same as advertising--PR is a far more effective communications tool than advertising. P&G just completed a study of six global brands and concluded that PR was the most cost-effective means of generating sales (best ROI) ("Bottom line on PR: It works, says P&G,"-- Nov. 9, 2005). We're just tallying the findings from our seventh annual Trust Barometer which tracks nearly 2,000 opinion leaders' attitudes in 11 countries worldwide (which we will release on Jan. 23rd) and found that stories in media are rated as nine times more credible than advertisements.
3) PR is media relations--Yes Tom, you are right, but up to a point. PR is much more. Good public relations counselors help companies and organizations build critical relationships with key constituencies such as non-governmental organizations, influential consumers, empowered employees and academic experts. We help clients listen and inform company policy.
Today PR is not simply hyping the product. Word of month really means-companies engaging with audiences in the brand/product process so that they deliver something that's truly worth talking about.
4) PR will shrink as the number of media outlets declines--the number of media outlets is not diminishing. In fact, with the rise of cable and ultimately Internet television, there has never been more choice for broadcast. The digital radio players like Sirius have more than 100 channels with different niche audiences. The consumer magazine arena is thriving. You are generalizing from the specific--true enough, the number of business magazines is smaller and therefore the news hole is reduced. But there are other ways of getting to target audiences, including employee blogs, street experiences, podcasts, and push e-mail to opinion leaders.
5) PR will wither in the face of a search engine bonanza-I challenge your central proposition that web advertising, albeit it tailored by the search criteria, provides any more credibility than print or broadcast advertising. Media, bloggers and general consumer/peer reviewers provide people with substantive independent credible insights and information that you simply can't get from advertisements. PR facilitates peer-to-peer, horizontal communications, that is emerging along side the traditional top-down pyramid of influence.
PR is ideally suited to the world of co-creation and democratization of communications. Yes, PR will adapt from the mentality of pitching stories and hyping the content. Tom, you and I have a bet. I will wager that three years from now, there will be 25% more people employed in PR. If I lose, I will send you a year's supply of deli meat from the Carnegie Deli on Broadway. If I win...I will leave that one to you.
Technorati Tags:
pr, public relations, edelman,
Posted by Edelman at January 13, 2006 2:53 PM
Trackback Pings
TrackBack URL for this entry:
http://www.edelman.com/mt/mt-tb.cgi/61
Comments
thanks for your response to tom. i agree with all of your points, but think you missed one of the main weak points in tom's arguments. he makes the case for search engine advertising, essentially "vs. traditional advertising". but tom misses the larger point that ANY advertising (search engine, newsprint, heck, sponsored-smoke-signals) has diminished credibility - full stop.
people wont accept unilateral, always-positive messages (found in paid ads) from any insitution as a means of building trust. given the flood of information at all of our fingertips from countless resources, institutions can only build trust by becoming a trusted resource for ALL information about themselves - the good, the bad and the ugly.
Posted by: chris at January 14, 2006 8:54 AM
CD as usual right on
Trust Barometer shows a 9 to 1 advantage in belief in message in free media over paid
Posted by: Richard Edelman at January 17, 2006 4:48 PM
Richard, thank you for taking so much time to respond to my recent posts on the PR industry.
I never said PR does not stimulate sales, I said that the whole point of PR is to stimulate sales. But that for most companies, the ROI on PR is not very good. Fine, if you have a large brand such as Microsoft Xbox, it's easier to hit your mark, but for small startups and many others, the money they spend on PR could be better spent on new communications. And the new communications is communicating directly to your customers or potential customers.
Overall, what disappoints me about the PR industry is how it hangs on so tightly to the old ways of going about its business. We, in the media, are being forced to look for new ways of publishing, etc, but in PR, it is still business as usual. And I can't but help think that there is going to be a reckoning of sorts because both PR and Media have moved hand in hand in terms of their respective boom and bust cycles.
Yes, there is a lot said about the intangible benefits of PR, as if to say that it is something which cannot be measured, just take our word for it. Well, there is a lot of the marketing pie that is measurable these days, online advertising for example. Which means that as more and more of the intangible marketing spend is measurable, then the "intangible" PR part becomes measurable through subtraction. And it should be interesting to see how companies change their marketing spend in response.
Also: Yes, there are more media outlets, there is an enormous fragmentation going on. But that means applying traditional forms of PR to those niche media outlets becomes nearly impossible and extremely expensive. And, it isn't being done. I can't tell you how many times PR companies and large company communications departments ask me "How do we deal with the bloggers?"
I could tell you the answers . . . :-) However, those constant questions mean that the PR industry isn't dealing with the fragmentation, it is mostly stuck like a deer in the headlights, and we can continue that metaphor to its conculsion if you wish...:-)
"You can't get there from here" is a phrase that I use time and time again because it aptly demonstrated how people continue to defend their traditional business models in the face of overwhelming evidence that times are changing--and they are changing much faster than many think...
Posted by: Tom Foremski at January 28, 2006 5:37 PM
Yes, you are right that PR is much more than only press relations, unfortunately, the majority of so called PR-specialists know nothing about IR and R, for instance. I asked my colleagues (45 persons) and only 2 of them making smth other, not building press relations.
Posted by: Inna Alekseeva at January 29, 2006 7:46 AM
TF doing all my responses tonight just back from Davos
agree with your critique if you assume PR folks are just considering blogosphere as broader definition of media
and if PR types continue to pitch stories as they have to reporters
I see PR role as fundamentally changing
To one where PR folks listen to broad group of stakeholders
Where PR folks also are substantive as hell...really well informed on companies they represent and ready to talk about them and the products
Where PR folks are genuinely part of the conversation, adding value...not simply middlemen
Where PR folks offer serious counsel that alters corporate behavior
That is where I am taking my firm...and my people are making it happen
More when I see you in SValley
Posted by: Richard Edelman at February 2, 2006 10:25 AM
Inna,
To have a media that is believed by its readers/viewers, we have to keep the iron clad line between advertising and PR. You know that Imageland is our affiliate in your country. Ms. Moiseeva is eloquent on the subject.
Posted by: Richard Edelman at February 2, 2006 10:26 AM