Show me the money? A challenge for PR

For the last 50 or so years, advertising money has made the world go round.  Despite the fact that Viscount Leverhulme (or was it John Wanamaker – either way, both were early pioneers of advertising for their companies) is quoted as having said:

I know that half of my advertising budget is wasted, but I’m not sure which half

The fact that half of the spend was considered to be worthwhile was enough to compensate for the wasted millions – but not today.  And the result of a reduction in advertising is a major challenge for PR in more ways than one.

First look at the mainstream media, which has relied on companies’ advertising spend to fund journalism.  Although it is somewhat ironic that such money often enabled the media to turn a spotlight on company behaviour, the lure of big audiences, and a belief in the persuasive power of the broadcast and print media, kept the advertising income flowing.

And, with a powerful media scrutinising organisations as well as offering editorial opportunities, the need for PR as media relations expertise was clear.

But audiences have fragmented and reduced for much of the traditional media.  From a PR – and advertising – perspective, organisations have begun to question the value of mainstream media – and spread their risk online. 

But, with the ability to monitor the effective return on online activities, companies soon saw where the budget was being wasted.  Spend online in advertising on media websites hasn’t proved to be quite such an attractive proposition – and there are many other places and ways to spend marketing money online.

As a consequence, new revenue streams are required by traditional media brands if they are to survive.  Rupert Murdoch thinks the answer will be charging the public for access to online content.   But today’s generation has other ideas – as Spotify has shown the music industry.

As PR professionals (and readers of Flat Earth News), we are aware of how little content is created by many online and offline media sites and how much emerges from our own craftsmanship of media releases.

Arguably, the public doesn’t need to pay to access such “news” – which can be presented direct by organisations or obtained via “free” media (eg public funded broadcasters like the BBC or blogs and other “citizen media” channels, etc). 

It is also questionable whether all traditional media can continue to be seen as sufficiently credible – with its limited trust according to the latest Edelman research – to offer the third party endorsement that was of such value to PR practitioners.

In the UK, there is another revenue stream being exploited by traditional newspapers and magazines.  The NLA – newspaper licensing agency – and the CLA – copyright licensing agency – charge a substantial fee to organisations who access or copy media cuttings either in hard copy or digitally.  This brings in millions of pounds a year – much from public sector organisations. 

Rather bizarrely, the NLA has announced that it will also charge for “the use by businesses of newspaper web content” – which means they expect PR practitioners to pay for sending (or using a service to send) links to free online coverage.  Not surprisingly, Google’s aggregation of newspaper web content is not being targeted.

Interestingly a US media lawyer who has proposed pretty much the same system has been berated as failing to understand the economics of the Internet.

Another question about the role of money comes for PR practitioners engaged in social media activities.  First, how – and when – can the large sums paid for Facebook (which itself has just paid $50m for Friendfeed), YouTube, etc be expected to deliver a return on investment?  And, where is the revenue model for Twitter – does it just rely on being bought out at some point?

PR has traditionally distanced itself from advertising and the notion that it is involved in paying for any media influence results delivered.  But surely it is naive of us to ignore the current funding questions that underpin (or not) mainstream, online and social media?

PR’s future depends on shouting like Jerry Maguire: Show me the money – because without someone – private sector or government – funding the media,  how will we reach and engage with our publics?

Even if we don’t want to think about such ugly financial realities, what about considering the way that money is already “corrupting” the “free” conversation between organisations and social media influencers such as bloggers?

The way that sponsors and other brands used their spending power – or swag if nothing more sinister – to attempt to influence at BlogHer 09 raises questions about what is going on here.

Do we need to wake up and smell the coffee (whether on free vend or £5 for something that is largely foamed air, but has a strong brand)?  Isn’t it clear already that the money needed to support the online conversation wants something in return – and that fundamentally affects the credibility of those we are paying for attention.

But without our money, there’s no independence to gain that credibility, and a lack of resources to deliver quality editorial coverage. 

As Liza Minnelli and Joel Grey sang it’s all about: Money, money, money… money, money, money…

This is a major challenge for PR as we cannot continue the myth that we can achieve results through free communications activities/media relations.  And, if we don’t ensure organisations spend their marketing money more wisely, it will be more than budgets that are wasted. 

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2 Replies to “Show me the money? A challenge for PR

  1. Time is the big cost consideration today, especially with social media. One of the things that journalism and PR have in common is that to do them well involves time. Many PR consultancies and client companies are struggling with how they return the investment in the time that is required to really engage with social media – likewise, the 24:7 news agenda challenges media and PR in terms of time resource.

    My question is who pays? It used to be the advertisers who made most journalism viable, and the media’s credibility made the investment in PR time worthwhile.

    Without money to soap the wheels, the bubble seems to be bursting.

  2. Heather, This post rather makes my head swim, so I hope I can come up with something coherent. I don’t think it’s all about the money, but I think money or, more broadly, resources will always be an issue.

    I have always been skeptical of people touting the merits of “free” media because they are overlooking opportunity costs. Something may not be expensive, but there is always a cost, even if it is measured in time.

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