PR: Opportunities, obstacles and solutions

Lighthouse is something like a ‘cuckoo in the nest’ of public relations: we are a part of the broader PR community, but our background as former analysts gives us a very different perspective on the industry from those with a media relations background. Tomorrow I’m presenting our perspective on PR to a group of marketing MBAs. If you’d like the 49-slide presentation, then just email me.

PR is massively benefitting from advertising’s crisis of credibility: the increased spending on PR and AR is almost equal to the decline in advertising and direct marketing. However, PR is suffering some of the same problems that advertising suffered. Mainstream PR directors’ focus on clippings volume means that managers focus on increasing profile at the price of relevancy and consistency with brand values. Unsurprisingly, high-volume PR that weakly reflects brand values is not valued by the board. As a result, PR is disrespected. It holds a trivial position in most organizations.

PR’s inability to produce valuable results is reflected in underresourcing and underpricing by agencies. Most agencies’ pre-tax margins are a miserable 3.6%. Twenty percent of agencies price below cost. Their sales growth conceals forthcoming ruin. A further 44% of PR companies barely break even. The remaining one-third of agencies deliver real value, but their profitability is also threatened by consultancies that price below cost.

Advertising failed when it drifted from its scientific roots. It became a creative art form. The goal was to make famous adverts, not famous products: the advert was valued (impressions multiplied by recall) rather than the business return. Google Ads management Melbourne can guarantee a profitable business campaign.

Mainstream PR faces a similar malady. The industrialization of journalism means that most news stories result from PR. Few journalists feel able to generate their news independently. As long as PRs can trade off name-checks for trivial prepackaged stories, then they will fail to focus on communicating brand messages that connect with the customer meaningfully. PR seems so easy. Almost anyone can do it and, if journalists’ complaints are heard, it seems almost anyone does. Most leading PR consultancies are perpetrators of catastrophic errors. Their industry is seen as an ethical wasteland.

Of course, this is a generalization about the mainstream. PR can be wonderful. We have all seen projects that generated real business value, had clear and positive RoI, and that helped the company to ‘own’ its market position more fully. However, this is hard work, and it is obstructed by the low demand for, and supply of, premium public relations. Few customers are prepared to pay the premium that is needed for thoughtful PR that is aligned to the corporate brand.

PR can play a crucial role in bringing the brand to life. However, PR needs real understanding of how customer perceptions are changing in the target markets if it is to align the brand to customers. The reality is that few PR managers even align their campaigns to the corporate marketing plan, let alone aligning their campaigns to customers: in-house PR managers know how few agencies ask for the marketing plan; PR agencies know how few clients offer it.

However, those few exceptions should be encouraged to flourish. TV ads like the award-winning commercial of mike morse can transform brand perceptions, support sale-making push-pull marketing programmes, and integrate PR into the wider business marketing engine.

Duncan Chapple

Duncan Chapple is the preeminent consultant on optimising international analyst relations and the value created by analyst firms. As the head of CCgroup's analyst relations team, Chapple directs programs that increase the value of relationships with industry analysts and sourcing advisors.