Dot-coms worldwide put faith in PR over advertising

NEW YORK: Dot-coms across the globe are holding tight to the belief that - unlike brick-and-mortar companies - their marketing needs are better satisfied by public relations than advertising, according to the results of an international survey released last week.

NEW YORK: Dot-coms across the globe are holding tight to the belief that - unlike brick-and-mortar companies - their marketing needs are better satisfied by public relations than advertising, according to the results of an international survey released last week.

NEW YORK: Dot-coms across the globe are holding tight to the belief that - unlike brick-and-mortar companies - their marketing needs are better satisfied by public relations than advertising, according to the results of an international survey released last week.

The survey, conducted by Global Financial Communications Network (GFC/Net) - a consortium of 11 public relations agencies in major worldwide markets - showed that 57% of respondents believe that PR is more critical to their success than it is for traditional companies.

Their choice rested on a widely expressed belief that PR is the most cost-effective way to achieve the credibility a Web-based business needs.

They also credited PR with being the more effective way of reaching the widest possible audience.

Ironically, PR practitioners in the dot-com space largely took issue with the findings. Said Richard Laermer, CEO of RLM PR, a self-proclaimed '100% Internet' agency, 'I do not believe that PR is the cure-all. You have to be nutty to believe that.'

In fact, Laermer indicated that his many years serving dot-coms have left him with a diminished view of just how much power PR holds when it comes to their success. 'A lot of the start-ups come to me saying they don't need a marketing director, they don't have a marketing plan, all they need is 'buzz.'' He went on to insist that if dot-coms believe they can survive without the three-pronged approach of PR, direct marketing and advertising, they were fooling themselves.

On the specific issue of whether PR is inherently more important for dot-coms than brick-and-mortars, Michael Gordon, VP of corporate communications at Kozmo.com, a company that ended its own stormy relationship with RLM earlier this year and has since expanded its in-house team, disagreed.

'PR is always more cost effective than advertising, especially for a start-up. I just think there are more start-ups in the dot-com world right now.'

But Laermer disagreed. 'Anybody who thinks there isn't a difference isn't paying attention. We'll put together a (dot-com PR) plan for 60 days. And in 60 days everything can change. If you can't work as fast as the Internet then you're in trouble. And that's the difference.'

However, the survey, conducted in August of this year among 75 different Web-based companies in more than a dozen countries, also revealed that dot-com executives widely believed that PR agencies were undereducated when it came to the Internet and would benefit from a better understanding of how their companies did business.

Forty-nine percent, however, said they had at one time decided to increase their PR budget as part of an ongoing communication program, and 65% said they saw a direct relationship between press coverage and site traffic.



COUNTRY-BY-COUNTRY RESULTS

Belgium: Spends the least on PR for dot-com launches and the most on advertising.



France: Feels strongly that PR is more important for dot-coms than for traditional companies



Germany: Prefers external PR to in-house, though spends comparatively little on PR overall Hong Kong: Ninety percent of communication budget spent on PR, though 20 % of dot-coms believe PR agencies are badly equipped to serve them Italy: Has the highest percentage of using external PR agencies. Most continue PR programs after launch

Source: GFC/Net



Singapore: Uses in-house more than other countries. 60% think PR agencies are fairly badly equipped for dot-coms



Spain: The only country in which some (30%) companies did not use PR.

20 % of sample did not answer, showing lack of awareness



Switzerland: Has the highest proportion of companies who would decrease the post-launch PR budget considerably



United Kingdom: Uses 36% of communication budget for PR launch, rising significantly post-launch



United States: The most satisfied with how PR services contributed to success of the launch. Mainly external PR used.



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