PR pros have long sought to link their efforts to clients' return on investment. The planned campaign for the Aluminum Association, detailed in this magazine (September 29, 2003), is a recent example. Of course, PR, like other corporate expenditures, should increase sales and profitability. Yet, it is important to note that the business PR challenge is more complex than simply relating advertising to sales.In today's highly politicized world, a firm's profitability depends not only on its sales, but also on the severity of the regulatory environment in which it operates. In effect, business operates in two worlds: the private market (geared to attract Joan Consumer) and the political arena (which seeks Joan Citizen's support in fending off adverse regulatory or tax policies). A well-designed PR plan would both expand sales and enhance a firm's moral legitimacy. For various reasons, PR sometimes neglects this dual challenge. First, those within the firm responsible for the PR budget may have little knowledge or interest in the regulatory risks the firm faces. Also, the political vulnerability of a firm is determined less by the reputation of the agency itself than by that of its industrial sector. The oil-spill legislation triggered by the Exxon Valdez incident, for example, affected the bottom line of all oil companies. In the policy world, a firm can't avoid the free-rider problem. To help itself, it must also help its competitors. But, most importantly, the nature of the communication challenge is very different in the policy world than in the marketplace, where most PR skills and practices have evolved. Too often, PR efforts apply methods designed to increase sales to the task of influencing opinions. This is a mistake. Joan Consumer has every reason to acquire knowledge about a firm's products because an informed consumer makes better decisions. In contrast, Joan Citizen has far less reason to devote much time or energy to learning the intricacies of policy issues. After all, even informed citizens realize they have little effect on public-policy decisions. The result, as political scientists note, is a rationally ignorant population. Yet influencing public opinion is still crucial as it defines the political sphere in which each business operates. But too often, a firm faced with a problem will seek to educate consumers while apologizing for rather than legitimizing their situation. The "as soon as you understand the situation you'll be on our side" message rarely works in a world of rational ignorance. Apologetic ads with the "we know we did something wrong, but are working to fix it" line don't work any better. As focus- group research shows, such ads are more likely to unduly raise the saliency of business problems. Legitimizing ads, in contrast, focus on the benefits derived from a product. The mid-1990s' American Plastics Council (APC) campaign (a successful effort to fend off costly state and local regulations) epitomizes this approach. The APC ads, including one in which a baby bottle falls out of a mother's hands straight toward her baby, but then bounces, communicated the critical value message, "Thank God we have plastics!" This campaign legitimized plastics by dramatizing the message that this material makes the world a bit safer for those most vulnerable. Business once addressed this legitimizing challenge more effectively. In Creating the Corporate Soul: The Rise of Public Relations and Corporate Imagery in American Big Business, author Roland Marchand discusses how business responded to the muckraker threats of the late 19th century. Companies were rightly concerned over the assault on the legitimacy of private enterprise and responded with a major campaign to morally defend their industries. In time, that effort was largely successful. The notion of corporations as "merchants of death" in the aftermath of World War I was replaced by the industry being heralded as "arsenals of democracy" by the end of World War II. Unfortunately, business then became complacent and largely abandoned its investment in this PR/advertising strategy. Thus, businesses were unprepared to address the renewed assault triggered by the rise of the multinational corporation and the increasing influence of anti-market interest groups. Corporations still spend vast sums reaching Joan Consumer - more than half a trillion dollars globally. These messages also speak to Joan Citizen. PR's challenge is to ensure that this "citizen" message legitimizes the modern corporation. Creating the corporate soul is as important today as it was a century ago. Fred Smith is president of the Competitive Enterprise Institute in Washington, DC, and Jody Clarke is vice president.
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