FROM THE ARCHIVE: PR must seize opportunity offered by diminishing dominance of ads

--- Originally published February 17, 2003 --- The PR business endured two very difficult years in 2001 and 2002. Ad executives, in particular Martin Sorrell of WPP, blamed their PR units for dragging down their holding companies' results. This is perhaps a natural reaction to the undue expectations of PR firms, which in the late '90s enjoyed five years of vast growth fueled by spending on the tech sector and investor relations.

--- Originally published February 17, 2003 --- The PR business endured two very difficult years in 2001 and 2002. Ad executives, in particular Martin Sorrell of WPP, blamed their PR units for dragging down their holding companies' results. This is perhaps a natural reaction to the undue expectations of PR firms, which in the late '90s enjoyed five years of vast growth fueled by spending on the tech sector and investor relations.

Now many companies are loathe to speak up on issues vital to their future, whether obesity or global warming, preferring to let their trade associations spar with opponents from government or NGOs. These actions are exactly the opposite of what smart companies should do. We're in the midst of a crisis of confidence, in which consumers, investors, employees, and voters have all been disappointed. Our company's recent US and European survey on trust indicates a void waiting to be filled, with NGOs such as Amnesty International, Greenpeace and others ranking as the most trusted brands in Europe, and very close to the most trusted in the US. Companies can't buy reputation. They must earn it through ethical behavior toward employees, transparency in financial reporting, and listening to customers. Now is the time for the PR industry to take the lead in the communications mix for brands and for corporate reputation. Jeff Bezos, chairman of Amazon, has cancelled his $50 million ad budget in favor of low prices and "word of mouth" promotion (read PR). Established brands are recognizing continued benefits from a differentiated product that gains credibility because its message is carried in a voluntary, meaningful, substantive, and spontaneous fashion by customers and employees. PR firms should stop competing only against each other and recognize the available opportunity to take share of voice away from advertising. Edelman's four-country study on trust shows an eight-to-one advantage on trust for a message reported in the news media over an ad, and a ten-to-one advantage in credibility for news magazine article over a product ad. If companies are to move from a "buy it" to a "be it" approach, there needs to be a change in corporate behavior, not just a shift in the communications mix. Companies must engage with traditional critics, like NGOs, because they bring a devoted constituency and real expertise to issues. DeBeers, the diamond producer, has worked with a small NGO, Global Witness, to develop an approach to keeping conflict diamonds from the market. This has subsequently been adopted by major importing nations as the Kimberly Protocol, turning a problem into a reputation enhancer. At the same time, companies must recognize that the mantra for reputation management in the '90s, the "outside in" method of becoming a great company by boosting the stock price, is now obsolete. Today a company builds its reputation from "inside out" by establishing dialogue with end users and by being open with employees. Shell Oil has now adopted the "paradox of transparency" approach. It no longer keeps important information from employees or communities. It now finds strength in telling its audiences what it knows and what questions remain through ongoing dialogue. Companies must also realize that consumers and employees have new expectations. They don't demand perfection, but do understand that companies continuously learn and adapt their products and services. The local subsidiary must be given the latitude to interpret and respond to cultural differences without jeopardizing the company's core values. At the same time, the private sector must not cede ground to government or NGOs by refusing to participate in debate. The age of ad dominance is over, victim of the infinite number of communication channels, the ability to channel surf, and TiVo. PR must grab the mantle of leadership in communications, and appeal to today's skeptical but interested audience on the basis of fact, not imagery. We must persuade clients that our new vision of communications is actually far less risky than the one they've traditionally embraced, in which frequency of delivery and control of message have been emphasized as key advantages. Trust is built through information delivered continuously by those who have earned a position of respect and with whom one can have a conversation. In the end, great brands and strong corporate reputation will accrue to those who take the chance of true engagement.
  • Richard Edelman is president and CEO of Edelman.

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