Download Chapters 11 and 12: Public Relations and Advertising

Chapters 11 and 12: Public Relations and Advertising
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Defining Public Relations
Public relations is often seen in a negative light. PR
professionals are often referred to as “flacks”.
Nearly every organization uses PR, although some use other
terms because of the negative perception.
PR can be publicity, research, public affairs, media relations,
promotions, and merchandising.
PR defends companies or people who have fun afoul of the
public.
Two positive examples are the Tylenol episode and MADD.
PR is about “communication” and “management”.
Public Relations and Its Audiences
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Virtually all of us consume PR in some form on a daily
basis.
PR professionals interact with:
Employees of an organization.
Stockholders.
Communities.
Media.
Government.
Investment Community.
Customers.
Scope and Nature of the Public Relations Industry
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200,000 people work in PR in the U.S. and nearly
every major company has a PR department.
There are over 4,000 PR firms and the largest
employs 2,000 people.
They generated $3.7 billion in revenue in 2005.
There are full-service firms and specialty firms.
Public Relations Activities
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Community Relations: tries to maintain goodwill for the company in
which it exists.
Counseling: offer advice to management on how to present a
message to the public.
Development/fund-raising: helps demonstrate the need for
contributions.
Employee/member relations: maintenance of high morale and
motivation.
Financial relations: enhancement of communication between investorowned companies and shareholders.
Government affairs: lobbying.
Industry relations: dealing with competitors and suppliers and at
times with the government.
Public Relations Activities
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Issues Management: designed to shape public opinion on an issue.
Media Relations: helps clients understand and get materials to the
media.
Marketing communication: designed to sell a product, service, or
idea. Advertising becomes PR when it is used to shape opinion or sell
an idea. Also, PR cannot control how its words or images are used.
Minority Relations/Multicultural Affairs: directed towards specific
groups.
Public Affairs: dealing with the power centers and leaders of whom
a client must interact.
Special Events and public participation: “happenings” or events that
stimulate interest in a person, product, or idea.
Research: determine the attitudes and behaviors of their various
publics.
Trends and Convergence
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Globalization and Specialization.
The increasing number of media outlets used in a
campaign, including the Internet.
The use of video news releases.
Integrated marketing communications (IMC): the
combination of PR, marketing, advertising, and
promotion.
Viral Marketing: targeting specific Internet users and
then letting them spread word of mouth.
The use of the Internet by non-profits to counter the
budgets of large PR firms and corporations.
Trust in Public Relations
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85% of Americans think that PR takes advantage of the
media to present misleading information favorable to
their clients.
79% think PR firms only are interested in disseminating
information that helps their client make money.
The number of PR professionals exceeds the number of
journalists.
Estimates are 50—90% of the stories we read in the
paper or see on TV are totally or in part PR material.
Consumers must make themselves aware of the sources
of information and the process by which it is produced.
Advertising
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U.S. Advertisers spend $500 billion a year—half of
the world’s total.
Americans consume 5,000 commercial messages a
day (only 500—2,000 just 30 years ago).
Advertisers are using “ambient advertising” and
“360 marketing” to get ads into non-traditional
places.
Advertising and TV
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TV introduced the “unique selling proposition” (USP):
how a product is different from other brands that
are just like it.
Critics believe that the USP promotes not the value
or quality or even information about a product but
how the product is set apart.
Advertising and Its Audiences
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The average person spends more than one year just
watching TV commercials.
Defenses of Advertising:
Advertising supports our economy, new products, and
fosters growth and jobs.
People use ads to make informed buying decisions.
Ad revenues make possible “free” mass media.
Advertising increases national productivity and
standard of living as people work harder to obtain
these goods.
Advertising and Its Audiences
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Complaints of Advertising:
Most advertising is void of useful information about the
product.
Consumers do not buy products but lifestyles.
Many nations have media systems without heavy
advertiser support.
Advertising contributes to a consumer culture.
Advertising is intrusive.
Advertising is deceptive.
Advertising exploits children.
Advertising demeans and corrupts culture.
The Scope and Nature of the
Advertising Agency
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In 2006 U.S. advertisers spent more than $292 billion to reach Americans
and more than $604 billion to reach world consumers.
The Advertising Agency:
There are approximately 6,000 ad agencies in the U.S. that employ
500,000 people.
Fewer than 500 earn more than $1 million.
Types of advertising:
Institutional or Corporate Advertising
Trade or Professional Advertising
Retail Advertising
Promotional Retail Advertising
Industrial Advertising
National Consumer Advertising
Direct Market Advertising
Trends and Convergence in Advertising
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In the summer of 2005 the world’s largest advertiser,
Proctor and Gamble, announced it would cut $300
million from its TV ad budget.
The production of advertising has been altered by
computers.
The amount of money companies spend on advertising
on the Internet between 2005 and 2009 is expected to
nearly double to more than $22.3 billion.
Rather than simple brand exposure, companies now
want accountability: performance-based advertising
asks the consumer to make some action (click on a link).
Trends and Convergence in Advertising
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New creativity: product placement, online advergames, ambient
advertising, short online films.
Prosumers: proactive consumers who reject most traditional
advertising and use multiple sources.
Audience fragmentation among mediums and along cultural lines is
another challenge for advertisers.
Psychograpic segmentation: appealing to consumer groups with
similar lifestyles, attitudes, values, and behavior patterns.
Globalization
6 out of the top 10 ad agencies are foreign-owned.
80% of the world’s population lives in developing countries.