Better Marketing Value for Less Money
It is highly unlikely, now, that Bill Gates could lose all of his money, but here is what he said he would do with his last dollar. “If I was down to my last dollar, I’d spend it on public relations.”
Those fifteen simple words are as ringing an endorsement of the power of PR as you’re ever likely to hear.
As powerful as PR is, as the economy contracts, and budgets shrink, the bean counters that know nothing about the power of PR will see it as one of the first things to cut. Companies do it all the time, because it is an easy line item to slash. It will make them feel better for a short time – until the effects of losing the PR start to bite. And when it bites, it will be hard.
PR isn’t always easy to track and measure, but you can be sure it is doing its work, because shortly after you stop it, the phone stops ringing and the website traffic starts to fall.
The is the time the company experiences an “inexplicable” drop in sales leads, as the company becomes practically invisible to consumers and business-to-business customers alike. After the sales leads stop, so do the sales. Then the bean counters cuts the sales staff and the game will soon be over.
The discontinuation of PR results in a double whammy, because along with the loss of print and broadcast coverage, the PR was feeding website traffic too. It wasn’t just content on the company’s website, but also all of the TV and radio stations and their websites, but all of the blogs that pick up all of those mentions of the company all over the internet. PR generates additional press AND search engine fodder, PR expert Marsha Friedman says.
Friedman says “When you cut the PR budget along with the advertising budget, it’s like tossing the baby, the bathwater and the bathtub.”
No matter whether times are good or bad, the marketing tactic that provides the highest value and the greatest return on investment is public relations.
There are two main models that PR agencies use. Retainer-based PR agencies operate on the principle of “best efforts” to get press coverage for your company. Performance-based PR agencies mitigate the risk because they only get paid when they deliver solid placements.
Many companies do not understand the difference between PR and advertising. Advertising depends on repetition, and that can often cost tens of thousands to run an effective campaign. Once the advertising campaign is completed, the display stops dead. With PR, the stories continue on, sometimes for many years, and the costs are likely one-tenth or less of the cost of an ad campaign.
The reason PR delivers a bigger bang for the buck is that it focuses on article placement and broadcast spots in free media. Also the company borrows credibility from the organizations that own the media sites, thereby gaining third-party validation because it is in the news sections, rather than an annoying ad that is competing for the reader’s attention when they are reading an unrelated story. Effectively, this means readers and viewers respect the placement much more than with advertising.
If I was down to my last dollar, I’d spend it on public relations – Bill Gates
Bill Gates was also one of the few software geniuses of his era who understood the differences between advertising and public relations, and he balanced the interplay between both to benefit his company.
The real beauty of a performance-based PR agency is that a Bill Gates-sized bankroll isn’t needed to capitalize on the power of PR. In fact, a standard national radio campaign can start from around $3,500.
To sum up, companies can’t expect to survive lean times without a steady stream of leads and customers coming to their door, and PR can deliver both without breaking the bank.
Thanks to Marsha Friedman, the CEO of Event Management Services, Inc., a performance-based public relations firm headquartered in Clearwater, FL for the raw data for this story.