Some of you, I am sure, have read The Wisdom of Crowds, a 2004 book by James Surowiecki, financial editor of The New Yorker.
It is a very inspiring book and, although hardly citing public relations, it is for us what one might call a ‘professional book’, in the sense that it clearly illustrates how by listening carefully to a specific public, an organizational decision whose consequences relate to that public and/or vice versa will generally improve in quality and accelerate the time of its implementation.
Which is the function we today assign to the ‘reflective role’ of strategic public relations.
In this week’s issue of the New Yorker, Surowiecki writes a highly thoughtful and interesting piece on how organizations -yesterday and today- differentiate themselves between those who select to ‘avoid sinking the boat’ and those who select to avoid ‘missing the boat’.
The author uses ‘advertising spent’ as a relevant indicator and brings many cases to support his thoughtful arguments..
Very good reading indeed.
I wonder if a similar indicator could not also relate to ‘public relations spent’ in a recession, and –if so- whether one may not add on a couple of other considerations which are directly related.
One legend goes that, contrary to advertising, public relations is anticyclic.
There have been various studies to prove this, but it is fair to say that there have also been other studies which prove the opposite.
Yet, one should consider:
a) public relations is normally more labour than capital intensive, therefore the immediate monetary spent is lower than that of traditional advertising;
b) public relations is normally more difficult to drop abruptly than advertising is. If not for other reasons, because of its normally fixed high labour costs, so it takes more time for the drop to occur and, by that time, according to the experience of the more recent crises, the economy recovers anyway.
Another legend also goes that marketing public relations efforts are ‘almost as good as.. but less expensive’ than advertising.
This is -mind you- a bold argument to sustain…
Most of us public relators don’t like AVE’s because we don’t think the system makes sense…
Yet, when we need to defend or to capitalize our professional turf, we use that argument as if it was objectively valid… And this is not a serious way to increase our share of the pie…
It is undoubtedly objective that, normally, marketing public relations is less expensive than advertising.
But it is highly subjective to say that public relations is ‘almost as good as.. advertising’.
As we know, in some cases it’s bottom line effects are even much better than advertising.
In others not.
I remember P&G’s studies which showed that one dollar spent in advertising returned on average 110 cents, while the same spent on marketing public relations returned on average 180 cents.
Very gratifying indeed, yet there is one big caveat: in such calculation, the vast difference between advertising spent and public relations spent considers the negative impact of advertising saturation.
Even admitting the validity of P&G’s calculations, it is clear that, on those basis, if P&G decided to invest in public relations ten times what they are investing today, the relative return would inevitably drop because of public relations saturation….
A third legend goes that corporate, financial, public affairs and other public relations efforts are, in many cases, inevitable and unavoidable. Even more so in a recession.
If it is true that public relations support organizations in consolidating their stakeholder relationships and corporate reputation and help cope with regulation of operational issues as markets inevitably intensify their strings to the use of public funds, then recession pr spent should in fact increase, as many of our colleagues seem to be experiencing.
What do you think?