The Role of Public Relations in Today's Business Climate

Editor's note: In the world of integrated marketing, the lines between advertising, communications and public relations have become almost non-existent. Just what role does Public Relations play in the today's mix? To find the answer, we called on experts in the field. In order to get a good cross section of opinions, we asked both PR agency and corporate people to respond. Representing the PR agencies are Gwinavere Johnston from JohnstonWells Public Relations and Leanna Clark and Christin Crampton Day from Schenkein. From the corporate side is Glenn Morey, Morey Evans Advertising, for Business to Consumer and Jerry Donovan, Public Relations Consultant for Gates Rubber Company for the Business to Business opinion. The responses that follow leave no doubt why these people are experts in their field. Today's Business Climate and the Role of Public Relations By Gwinavere Johnston - JohnstonWells Public Relations As the corporate scandals of 2002 made abundantly clear, a company's reputation is paramount to its success, if not its survival. The fallout of corporate greed has broad implications, including some that hit home for average Americans in the form of unemployment and depleted retirement savings. As a result, corporate credibility is at an all-time low, and public mistrust has spilled over into investment markets. This creates a considerable need to restore public faith, and public relations professionals will play a vital role in leading the charge. Reputation and Why it Matters Reputation can account for a large portion of a company's market capitalization, and can be its most important long-term asset. It impacts an organization in a myriad of ways, including stock price, and the ability to attract and retain customers and employees. Corporate reputation is based on factors such as y y y y y y Quality of products or services, Earnings and business performance, Stability and fairness as an employer, Level of integrity in business practices, Degree of honesty and openness, and Involvement in local communities.

Today, with distrust of the corporate world at an all-time high, corporate credibility is an over-riding factor. Whether they like it or not, companies today are at the mercy of public constituencies. That means there is growing recognition of the need to foster a good reputation by developing positive relationships with various publics. How Corporate America Got Into Trouble Each of the companies caught up in scandal made the same mistake: failing to focus on the concerns of their publics. If publics are the groups a company relies on for success, it is dangerous to neglect them by y y y y y Focusing on share price to the detriment of quality and integrity, Forming boards that are not designed for strong corporate governance, Misleading shareholders, employees and others by not sharing the full story, Emphasizing what is legal, rather than what is ethical, and/or Jeopardizing employee jobs and savings through business misconduct.

How Companies Can Restore Trust There are formal definitions of the term "public relations," yet its meaning is self-evident; it is the management of relationships between an organization and the constituencies upon which it depends.

Quite literally, public relations is managing relations with various publics, a role that grows in importance as reputation becomes ever more critical to business success. Companies can restore trust in a number of ways, many involving traditional PR strategies, such as: y y y y y y Using integrity and fairness as criteria for all business decisions; Maintaining an emphasis on quality of products or services; Openly sharing truthful information with all publics; Actively seeking input from publics and being responsive to concerns; Renewing a commitment to local communities; and Creating forums to encourage dialogue with constituencies.

The bottom line is that companies must make it a priority to value the needs of all publics, and to forge good relationships with them. The cornerstone of a good relationship is trust, and trust is based on open and honest communication. Effective public relations tells a company's story in a way that is accurate, honest, and easy to understand, helping to establish a reputation for credibility. A good relationship also requires a willingness to listen, and true public relations is a two-way process. PR professionals recognize that to manage relationships, they must understand and respect public concerns and viewpoints. They must also go a step further, to serve as the public's advocate within an organization. In effect, corporate public relations professionals frequently play the role of an outsider. By questioning decisions and their impact on customers, the community, employees, and others, public relation professionals bring the public perspective to an organization, fostering its ability to be responsive to public concerns. In Summary A company's reputation, or the essence of how it is viewed by all of its publics, is the leading factor in its ability to achieve success. With this in mind, the battered image of the corporate world is no small matter. Restoring trust and helping companies to earn a reputation for credibility will require sound public relations leadership. Indeed, with corporate integrity central on the minds of average Americans, the role of public relations today is more critical than ever before. About Gwinavere Johnston As founder and CEO of JohnstonWells Public Relations, Johnston is nationally known as a pacesetter in public relations counseling. Since founding JohnstonWells more than 30 years ago, Johnston has played a leadership role in helping to enhance the public relations profession. She is a member of the Public Relations Society of America (PRSA) College of Fellows, is a past President of the Colorado chapter of PRSA, and is a founding member, and member of the board of directors, of the Council of Public Relations Firms. Johnston received the 1993 "Lifetime Achievement Award" from the PRSA Colorado chapter, and the "Athena Award" from the Colorado Women's Chamber of Commerce in 1999. The Role of Public Relations in Marketing a Consumer Brand By Glenn Morey / Morey Evans Advertising The strategic role of PR for consumer brands is critical to extending the impact and credibility of advertising. The questions we so often ask from a PR effort are: (1) what are you trying to achieve with your PR over the long run, and (2) how does it integrate with your marketing and communications plan? The most obvious strategic role for PR-a role that meets a communications objective that is difficult for conventional advertising to address-is to create community affinity while at the same time complementing consumer affinity for the brand. PR is uniquely capable of building relationships with communities (geographic, demographic, social, political, special interest, etc.) through events, sampling, causes, inkind support, and sponsorships, to name a few.

Second, we like to see PR or media relations deliver messages not normally addressed in conventional advertising. For example, good news about the client's business, new services or new level of commitment to service, how well the client is measuring up within its competitive set, the client's business heritage, or the client's involvement in the community. These types of messages are critical to creating a positive selling environment for our advertising. Equally important, it creates buzz for our client as a company. Third, we like to see PR reach audience segments beyond our core media targets. It's a big world out there for mainstream consumer brands. Mass audiences, like adults 18-54, simply cannot be economically reached. Therefore demographic, psychographic and lifestyle targeting is more important today than ever before. At Morey Evans our media targets are very well defined to those consumers who have the greatest propensity to buy our client's product or service. By the same token, however, a mainstream brand is still mainstream, meaning just about anyone is a possible customer. PR is an efficient way to broaden our reach to the mainstream public. Fourth, we like to see PR build momentum into the launch of a new ad campaign. This provides exposure between media flights and increases frequency of brand exposures during the duration of the advertising period. In the fight for brand awareness and top-of-mind consideration, there are few substitutes for pure frequency. And last, but certainly not least, we like to see PR reinforce, in the consumer's mind, those moments when a company chooses to put a stake in the ground: The launch of a new market, acquisition of another company, a new partnership, a product release, relevant differentiation, or new leadership with a new vision. All of which provide value to the consumer. It's important to note that, at Morey Evans, we do not claim to be PR practitioners. We will continue to focus on client growth by devoting our time to building brands through advertising, while at the same time encouraging PR as a necessary component to the communications plan. What we claim is that we are believers in PR, and that we have teamed with PR firms in Denver and from coast to coast with great success and effectiveness. We believe that a PR firm should be hand selected by the client, on the basis of category experience and ability to demonstrate a proven track record for the deliverables required. And we believe the client, then, has every right to demand true integration. Marketing communications is a team sport, and we're all measured by the wins we help create. For more information about Morey Evans Advertising please see our web site at www.moreyevans.com or contact Amy Holzfaster at (303) 296-8011 or aholzfaster@moreyevans.com. Glenn Morey is President of Morey Evans Advertising, a Denver-based agency with billings of $30 million, representing a broad range of clients including Vehix.com, Ricochet Networks, Qdoba Mexican Grill, Good Times Restaurants, Western Union's Bidpay, Deep Rock Water, netLibrary, Metro Brokers, and Pak Mail. Role of Public Relations To Help Regain Corporate Trust by Leanna Clark If business is to regain the trust it has lost due to questionable ethics and other business practices, it must provide public relations with a seat at the executive level management table rather than just relying on public relations when a crisis arises. Consumer confidence is at its lowest point in a decade, as evidenced by ongoing studies in 2002, by Schenkein's research partner Roper ASW. Corporate wrongdoing, stock market plunges, layoffs and depleted 401(k)s were cited as reasons for the erosion in corporate trust. Americans put the blame squarely on the shoulders of CEOs, who according to Roper, won't be "let off the hook" easily. Consumers view CEOs as the "bad guys," and blame their greed for the ensuing crises that have elicited

their anger. Clearly, we live in an environment where every company is under the microscope and negative business stories appear every day on the front page of our newspapers. There is nowhere to hide, and it is the unique skill set of public relations professionals that will be called upon to help business turn the tide. Those of us who have the ability to assist with targeted strategic counsel and messages that will resonate with the expectations of business stakeholders will be increasingly in demand. We will also be called upon to help executives who do not possess the skills required to operate in the limelight with coaching and media training to ensure their messages are delivered and received as intended. Research conducted by Jonathan Low and Pam Cohen Kalafut in their recently published book, "Invisible Advantage: How Intangibles are Driving Business Performance," overwhelmingly demonstrates that business institutional investors rely on much more than traditional economic indicators such as profit and loss. Interviews with buy-side investors, who control more than 80 percent of all stock that is purchased, pay significant attention to intangible assets such as culture, leadership, human capital, communications, brand and reputation. Public relations is uniquely equipped to manage these assets, setting the stage for an ever-increasing role in a variety of strategic areas beyond publicity. Using public relations to support marketing goals, including driving sales, is another area of growth for those of us who specialize in marketing PR. Schenkein developed measurement models over the last decade that clearly demonstrate that public relations is more powerful at influencing product interest and buying behavior than any other discipline. The third-party endorsement provided by positive media coverage that today's jaded consumers rely upon to help them make purchase decisions is more critical than ever. In some cases, we have been able to deliver almost 1:1 inquiry to sales from media coverage about new products when we have tracked results for our clients through dedicated 1-800 number calls. When publicity precedes other marketing, such as advertising, it can make consumers pay attention to an ad as much as three times faster than when advertising has no publicity support. Publicity has the powerful ability to deliver in-depth information that consumers demand, which is impossible to deliver in a 30-second television spot. As an essential component of the marketing mix, PR is vital in building credibility, relevance, trust and lasting relationships. To reach increasingly segmented audiences, marketing public relations is one of the most cost-effective approaches to sales success. Knowledge gained over 30 years has helped Schenkein gain recognition as one of the top 10 mid-sized public relations firms in America (The Holmes Report rankings). Schenkein has built long-standing relationships with regional and national clients, based on proprietary measurement techniques it has created to demonstrate the value of using public relations to help businesses achieve results that support their bottom line. Schenkein is part of Pinnacle Worldwide, an international organization of independent public relations firms with more than 60 offices throughout the world, and is also a member of the Council of PR Firms. Leanna Clark, Accredited in Public Relations (APR), and Christin Crampton Day, APR, are principals and co-owners of Schenkein. They currently oversee a staff of 30 that provides public relations and brandbuilding campaigns for clients such as Western Union, FirstData Corp. and Qwest. "How does PR fit into today's business climate?" By Jerry Donovan, Public Relations Consultant, The Gates Rubber Company Although bleak and uncertain, today's business climate can be a boom for PR strategists who are willing to change their time-honored tactics. Specifically, forget about the separation of advertising and editorial, and remember that the Internet is everywhere. While the figures are not final, American Business Media reports that ad page spending for 2002 was down by at least 16%. It's definitely been a buyers' market for agency media buyers and ad managers, and the trend should continue this year.

The outcome is that the trade press is offering many merchandising perks as incentives for advertising dollars. From a public relations standpoint, the perks may range from eighth-page editorial product announcements to third-page advertorials to E-newsletter sponsorships. For example, earlier this year, the BSM&R media buyer for the Gates account approached a major industrial trade magazine with a proposal for 12 monthly one-page ad insertions. Gates agreed to pay a small price increase and to place four additional ads in a sister publication for an additional $6,600. In return, the publisher guaranteed to run 12 months worth of advertorials with a space value of $40,000. Typically, advertorials appear opposite a full-page ad and are written to provide additional details and application information about the product or service featured in the ad. Because they appear to be staffwritten editorials, the message in the third-page insertions has a high level of credibility. In addition to promoting one's company in the print media, B2B public relations practioners should look into cyberspace - the Internet. It's everywhere, it's instantaneous - and it's increasingly the first place industry looks for breaking news. Your company Web site is an ideal medium for posting corporate news and production promotions that would be of interest to customer prospects. Just keep it "fresh" so that your audience will be inclined to visit the site often. You can also use your Web site to improve and sustain communications with the media. Several years ago, Gates set up a special "Editors" section that hosts news announcements and press kits. It also contains high-resolution photos, technical articles and a directory of Gates marketing and engineering experts who can be contacted for editorial input. After the site was launched, several editors were contacted for their responses to this PR tactic. Universally they replied, "This sure makes my job a lot easier." Also, use your Web site to process reader inquiries. Web pages can be set up with a registration process so that sales leads (information about customer prospects) can be captured. You get customers to your site by tagging magazine ads and advertorials with a specific URL. Readers are able to instantaneously visit a page or section that contains additional product information, a PDF of a brochure and the location of a nearby distributor. Want to be THE "information resource" for your industry? Then look like one. Almost all customer and stockholder information you publish on paper can be converted to a PDF or added to a site as text. This material includes annual reports, product catalogs and brochures, technical tips and white papers, and case histories. You don't have to be a Webmaster to post information to your site. Web designers can set up a system that gives you administrative access to a site and allows you to add content using Word processing-like editing tools. Media Web sites are another opportunity. Most B2B publications have their own sites where they duplicate much of the editorial content in their monthly magazines. They need advertisers and news material, and they also offer space on their sites as part of their merchandising incentive programs. You might be able to get a free button ad, banner ad or an advertorial insertion for free if you advertise on the site or in the magazine. B2B magazines are using another revenue generating medium - E-newsletters. Publishers solicit paid ads for their email publications, and they also need editorial material. Depending on the publication frequency of the E-newsletter, you often can count on seeing your product or corporate news delivered faster via an E-newsletter than in the monthly magazine. Again, many magazines offer their E-newsletters as part of their merchandising incentives for advertisers. And, many don't require an advertising connection. Publishers are just happy to have content - your news - for their E-newsletters that may be published daily, weekly or monthly. Finally, don't over look your own email capabilities. You create your PR messages on the computer. Your editors prepare your material for publication on their computers. Why not send your editorial material (and illustrations) from computer to computer via email? Reduce the paperwork for your editor (and yourself), and you may see your material in print, sooner than you expected. For many, many years, Gates has considered B2B public relations an important element of its marketing communications program. It allows Gates to reach vertical audiences in trade magazines that don't receive ad dollars. It has higher perceived credibility than paid advertising. And, it supports Gates position as being a leader not only with its products, but also with the information technology thasupports these products. From a business-to-business viewpoint, Gates belies that if a solid and well-executed PR program ignites the fme of interest, then advertisi will fan the fire.

Jerry Donovan is a public relations consultant for The Gates Rubber Company and works as a strategic partner for BSM&R, a full-service, integrated marketi communications agency specializing in B2B markets. During his nearly 30 years with Gates, Jerry was responsible for the company's employee publication, marketing communications and corporate public relations activities. He has won several awards from the Public Relations Society of America