EDITORIAL COMMENT: P&G stock slump is a lesson in PR

It’s baffling to ponder what might be going on behind the scenes at Procter & Gamble. After worse-than-expected results, its share price slid precipitously. Some say this is just further proof that fickle brokers are abandoning the bricks-and-mortar companies in favor of loss-incurring but visionary dot-com stocks. However, if you look at our Media Watch (p17), it’s clear that there is more to this story than fashion. It’s a communication issue.

It’s baffling to ponder what might be going on behind the scenes at Procter & Gamble. After worse-than-expected results, its share price slid precipitously. Some say this is just further proof that fickle brokers are abandoning the bricks-and-mortar companies in favor of loss-incurring but visionary dot-com stocks. However, if you look at our Media Watch (p17), it’s clear that there is more to this story than fashion. It’s a communication issue.

It’s baffling to ponder what might be going on behind the scenes at

Procter & Gamble. After worse-than-expected results, its share price

slid precipitously. Some say this is just further proof that fickle

brokers are abandoning the bricks-and-mortar companies in favor of

loss-incurring but visionary dot-com stocks. However, if you look at our

Media Watch (p17), it’s clear that there is more to this story than

fashion. It’s a communication issue.



P&G’s earnings weren’t bad. It didn’t record a staggering loss - the

earnings simply weren’t as good as expected. But it did fail to manage

expectations well, and to Wall Street, that’s unforgivable. At a Merrill

Lynch consumer conference a week before the results were announced, P&G

said that financials were on track.



Since the start of the year, the company has also made some suggestions

that expansion might come from healthcare acquisitions, which again has

not been well met, allowing analysts to speculate that the company has

lost its direction. These are, of course, business decisions. But why is

the company bothering to employ a corporate communications department if

it isn’t telling management how things will play with the

stakeholders?



PR is not just about communications. It’s also about listening. It’s

about being the eyes and ears of management: listening to what

employers, consumers and journalists will say and feeding that back so

management knows how its decisions will play.



Of course, it could be that the management is simply not listening to

its corporate communications department. But when we contacted P&G, its

response was that ’they would not comment on PR for the foreseeable

future.’ Aside from denying that the P&G logo is a satanic symbol, is

that really all they have to say?



Agency Web sites miss the point We thought it would be fun and

instructive to see how the Web sites of the top PR agencies stacked up

(p21). Our findings pointed to an old problem: agencies are too focused

on catch-all capabilities and not enough on identity building. In an era

when chemistry counts, these sites don’t do enough to showcase the

agencies’ personalities and creative capacities. As one of the judges

said, ’It comes back to their ability to communicate what they do and

entice me to go further into their site. If they can’t sell themselves,

how are they going to sell my product to the press?’



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