The Importance Of PR
I had a very interesting conversation over lunch with Abigail Johnson of Roeder-Johnson last week. Roeder-Johnson is a PR and strategic positioning firm that has done a lot of work with August Capital's companies and specializes in explaining difficult technologies to the media.
We were discussing the importance of PR and how, since PR has a difficult to prove ROI, it is becoming an unused tactic in these capital constrained times. Earlier this week, Abigail followed up on our discussion with a very well argued email and with her permission, I am posting it here:
After the unparalleled hype of the bubble in which communications and "publicity" were used as substitutes for good business strategies, the pendulum has swung too far away from companies defining, articulating and communicating their fundamental differentiation clearly. Most VC's and executives today believe that any focus on strategic communications is strictly optional. But this may be a mistake.
Early in my career I learned the adage "He who wins in a down market wins." This is true today on many levels, not the least of which is strategic communications.Let me explain: if a company is trying to define and lead a market, a down, quiet market is a great opportunity to take the time for the market education process that will inevitably be needed. Regardless of the state of the market, education will be needed. But in today's market, an interesting, new idea can get an unfair mindshare compared to the way it was a few years ago. And, if a special, potential leader doesn't do this, there is a good chance that they will go through their life as an also-ran.
What are the benefits of well-thought out and executed strategic communications? Those who lead the market ultimately can lower their cost of capital. This may manifest in many ways:
a. Better strategic partnerships
b. Better employees
c. Higher prices for products
d. Better valuations
e. Etc.What's involved in such strategic communications and market education?
Step One: Define the vision and the company's core differentiation
Step Two: Articulate these clearly
Step Three: Begin to seed the market to begin to get influencers to see the world from a new perspective
Step Four: Continue this process through education, announcements, strategic marketing activities, etc.
Step Five: Continue this process through education, announcements, strategic marketing activities, etc.
Step Six: Continue this process through education, announcements, strategic marketing activities, etc.
Notice that this is NOT publicity or hype. Though some of the tools used to accomplish this strategic communications probably include working with the press and analysts, the goal of this kind of effort is a long-term market understanding of a company's leadership.
My message is: it's time for you to help companies understand the opportunity they are facing and to seize the day to define their fundamental differentiation and strategic communications plan.
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Andrew Anker writes about the importance of PR. "... since PR has a difficult to prove ROI, it is becoming an unused tactic in these capital constrained times." A great point. And yet, getting "buzz" around your company and its products is as... Read More
I have always believed in PR investment as preferred among marketing spends. VentureBlog has a good article about why. VentureBlog: The Importance Of PR Read More
Hiding over in the bowels of VentureBlog's archives, there's a 2003 post from Andew Anker (largely quoting Abigail Johnson of Roeder-Johnson) that should be required reading for anyone selling communications services. My favorite snippet: Early in my c... Read More
Hiding over in the bowels of VentureBlog's archives, there's a 2003 post from Andew Anker (largely quoting Abigail Johnson of Roeder-Johnson) that should be required reading for anyone selling communications services. My favorite snippet: Early in my c... Read More
OK, OK, so the first post of the day was little depressing. Read More
I would love to dismiss the value of PR. In general "marcomm" gives me hives.
But then I look at Google, which seems to have spent about $0 on advertising. And which clearly has an amazing P.R. machine that got it great press in its ascendancy to #1 among search engines.
Great points Abigail -- articulately stated as always. I do think, however, that as long as PR continues to try to prove its value without an ROI measure, it remains in the second-tier of essential corporate activities in the minds of most C-level executives.
Abigail Johnson of Roeder-Johnson, like all company executives, is a salesperson for the product/service that she sells. Have you ever heard a company CEO say on TV, print or in email that the solutions they sell are not important? So take her advice with a grain of salt.
Do you think she would advice that hiring more sales people in a slow economy was critical to reach a targeted audience (not just large) was better than spending money on PR agencies that charge $10-$30K per month?
How does this apply to a small company? Two Million / year in revenue.
Business in question http://flagandbanner.com
For those of you who are skeptical, it's pretty understandable, because most PR is sold on a "hype" and quantity basis.
But some of us have been lucky enough to watch strategic communications work as a fundamental business tool alongside marketing, sales, engineering, finance, and operations. As I explained, when used this way strategic communications and positioning can fundamentally change the value of a company, by helping it lead and define a market.
This kind of communications works for most companies, regardless of size. The methodology for implementing the plan differs depending on the company's size and specific situation, but the need doesn't.
I could talk about this at some length, but would need a lot of space to address all the different questions. If you want to discuss your questions further, please feel free to contact me.
What ever happened to pay-for-performance PR? I recall that years' ago several firms agreed to be paid by the column-inch at some fraction of buying ads in the same space.