“If I was down to my last dollar, I’d spend it on public relations.” – Bill Gates
As unlikely as it is that Bill Gates would ever be down to his last million dollars, let alone a single George Washington, the fact remains that it’s a powerful endorsement of the power of PR.
Still, when the economy is tight and corporations yank hard to get their belts down to that last notch, PR is usually one of the first few items on the budget that’s frozen or cut completely. To bean counters, it’s an easy choice. Because it’s impossible to track the impact of PR in strict accounting terms they consider it difficult to quantify PR expenditures. To the numbers guys, if something fails to leave a footprint on the spreadsheet, it is expendable.
However, the usual result of a cut in PR is an “inexplicable” drop in sales and sales leads which can make a company practically invisible to consumers and business-to-business customers alike.
Add to that the fact that the print and broadcast coverage almost always comes with an online media counterpart repurposing their stories, PR delivers the double-whammy of free press AND search engine fodder. So, when you cut the PR budget along with the advertising budget, it’s like tossing the baby, the bathwater and the bathtub.
Even in lean times, public relations still provides the highest value and greater return on investment than any other marketing tactic, including promotions and advertising. To increase that value, there are a number of “performance-based” PR agencies that mitigate the risk of their clients and only get paid when they deliver solid placements.
Retainer-based firms operate on the principle of making their “best efforts” to get your company press. With these firms, you’re paying more for their time than for press. With performance-based agencies, you actually pay only for press, not for intangibles like time and effort. They deliver for you, or they don’t get paid.
Part of the issue facing corporations is the lack of understanding of the difference between PR and advertising. If the soul of advertising is repetition – which generally cost into the tens of thousands to run an effective campaign – the heart of PR is that clients will likely pay one-tenth or less of the cost of an advertising campaign.
Further, the PR delivers a larger punch because it focuses on the placement of articles and broadcast spots in free media. Moreover, these placements carry the third-party verification factor of being in the news sections (not advertising) of the outlets in which they appear. This means that readers and viewers respect the placements more than advertising because they carry the tacit credibility of the outlets that carry them. In other words, if the editors of these outlets deem the company or client worthy of news coverage, then there must be something special about them.
Gates was one of the few software geniuses of his era who also understood the differences between advertising and public relations, and was able to maximize both to his company’s favor. But with performance-based PR agencies, companies don’t need a Gates-sized bankroll to capitalize on the power of PR. In fact, they can start with about $3,500 for a standard national radio campaign.
At the end of the day, companies can’t survive the lean times without a steady stream of customers coming to their doorsteps, and PR can deliver them without busting the bank.