Now, it used to be an article of faith in the American business community that the slightest dip or tremor in the economy - unemployment up, the markets down, inflation up, housing or auto manufacturing down - meant a corresponding cut in advertising budgets and PR spending across the board.
Now, it used to be an article of faith in the American business
community that the slightest dip or tremor in the economy - unemployment
up, the markets down, inflation up, housing or auto manufacturing down -
meant a corresponding cut in advertising budgets and PR spending across
But as the new century begins (how long will it be before people refer
to the 1990s and the present decade as the ’turn of the century?’), we
are clueless, since the latest economic downturn was pre-Clinton, and
the Reagan recession is shrouded in the mists of antiquity. And with Mr.
Greenspan’s hand renewed at the tiller and companies becoming both fewer
and larger - the unimaginable dollars 350 billion merger of AOL and Time
Warner is causing barely a ripple - it begins to appear as though all
the old rules may be out the window.
But some data from the turn of the century (ah, those carefree, fin de
siecle days of the 90s) seem to suggest that the old order has changed
while we weren’t looking. Corporate executives now look on advertising
and PR as tools for more than hyping new products, increasing market
share, distracting customers from disasters or even reinforcing a
Thus a survey last year by Burson-Marsteller and this publication found
an overwhelming majority of CEOs now believes management of corporate
reputation affects stock price, previously thought to be responsive
almost entirely to old standbys like revenue, profit and the tangible
elements of the balance sheet.
Additional turn-of-the-century research by the Council of Public
Relations Firms seems to confirm this new emerging doctrine. Its polling
revealed that the Top 200 of Fortune’s ’Most Admired’ companies spent
twice as much on PR as companies with weaker reputations.
Does this mean corporate CEOs are getting smarter, or are they merely
discovering a new business (and communications) landscape? Probably
The new ’Age of Communications’ has turned more of us into investors and
has also provided everyone with tons of new information with which to
judge companies, products and brands. We pass on this information to
friends, colleagues, friendly merchants and, through the Internet,
countless strangers as well.
We not only know which cars sell more, for example, but which are
better, and now there may even be a connection between these pieces of
The next time the markets turn bearish and the numbers head south, we
can test the new theories. Right now, it looks as though reputation and
a good name are our best stock in trade.