Why PR is Imporant in an Economic Downturn
By racetalk
By George
As marketing departments across big and small companies plan for 2009 budgets, we’ve gotten several requests from clients asking us to help them justify public relations costs to board members and C-level executives.
It’s an easy task.
The core answer is that PR drives business value – at a lower cost than any other marketing function.
For example, we work for a consumer technology company and recently ran an aggressive issues-response campaign that resulted in our client appearing in the New York Times, FOX-TV, Wall Street Journal, and dozens of other trade and online publications.
The results? An increase in Web traffic by 1,000 percent and a sales spike during the media blitz of 6X. This one week of results paid for their monthly retainer to Racepoint for the year – ten times over. Needless, to say, the client was delighted.
In a financial downturn, PR and marketing become even more crucial. Here’s Media Executive Erik Sorenson writing for CNBC:
“Less marketing equals lower revenues, which means more cutbacks. Cut your marketing spend again and you risk even lower revenues. Now you’re forced to cut more costs–-and probably people–but you’re doing it from a lower base, ever closer to the brink.”
Good PR helps spreads those important marketing messages to the masses and to targeted constituent groups (customers, prospects, and even employees). Smart companies will understand that competitors often cut back on marketing and PR during financial downturns and that gives these smart companies a better chance of dominating the market – and defining the trends and issues, and the problems and solutions.
When you’re competitors aren’t talking – you should be.
Todd Defren at Shift PR recently listed five reasons why a PR firm provides value in times of economic uncertainty. It’s a very good list. Here are four more reasons:
- PR Can Create Markets. In this day and age where Joe the Plumber can go from obscurity to an overnight sensation – the power of publicity should be evident. This power doesn’t only work for individuals – but for ideas, products and companies. Good ideas can spread like epidemics when properly messaged and seeded. In recent technology news, look at what One Laptop Per Child did for affordable laptops, what EqualLogic did for iSCSI storage solutions (both Racepoint clients), and what VMWare did for virtualization. All of these campaigns were spearheaded with aggressive communication plans.
- PR Can Help Open New Markets: Marketing in another country can be a daunting and expensive proposition. Tapping into your PR agency’s foreign and domestic operations and strategic partnerships is an excellent and cost-effect way to soften a market for a company’s products and services. It’s an effective way to test marketing messages and massage marketing strategies before investing in more costly marketing programs such as advertising or trade shows. It also provides instant legitimacy in a new market and provides salespeople with impartial and independent collateral.
- PR Agencies Give Access to a Strategic Network: PR agencies have large networks of clients and partners that can often be a goldmine of potential partners and customers for a client. Racepoint often sets up business meetings between clients, introduces clients to our venture capital partners, and provides access to our family of next-generation marketing companies (from Digital Influence Group to Ringleader Digital). PR firms can be a valuable resource beyond the day-to-day communications work they perform.
- PR Agencies Add Depth: A PR agency can become a de facto extension to a marketing and communication department. Companies get a dedicated staff (of between 4-10 people depending on budget) that specialize in the company’s market. But companies can also tap into the expertise that exists through the PR agency – able to get advice and perspective from senior executives with different areas of specialty (from media training to digital marketing) from the entire PR firm.
1 comment October 17th, 2008
