CIMA and an entrepreneur answer your questions.
Max is better placed to argue the merits of PR versus advertising, so I'll leave that to him and jump in regarding how we measure effectiveness.
A company undertakes PR or advertising expecting it to contribute to a business objective, e.g. increasing penetration, market share or sales. So management accountants, PR professionals and marketers have this in common - we're all involved and interested in measuring the effectiveness of such expenditure.
However, it's easier (although still challenging) for us to help marketing assess the effectiveness of advertising as this controls when and how messages are conveyed. It's harder to predict how and when PR messages are picked up and disseminated, and more difficult to identify (let alone measure) outputs and evaluate their impact. For this reason I wouldn't suggest trying to directly measure the impact of PR on sales, but on specific metrics, such as customer perception of brand, then evaluate how that relates to buying intentions.
An organisation could measure PR by AVE (advertising value equivalency), by the number of white papers it publishes, speaking engagements undertaken by its senior management, how often its spokespeople are quoted, or if it is invited to sit on industry bodies or committees. It could evaluate PR by appraisingevents, analysing feedback or assessing how the CFO or CEO handled analysts' briefings or press conferences. Not all these will be relevant to all organisations - that's the point. An organisation should know what it wants to achieve before it can specify what it should measure.
PR professionals aren't fluffy creatives, they' rebusiness focused. And management accountants aren't dry analysts, but are used to dealing with non-financial information and designing their own solutions.
Louise Ross, CIMA technical expert.
PR absolutely can replace display advertising, particularly in the current climate - because a good PR campaign can and will achieve as great an impact as an advertising campaign that costs ten times as much.
Pimlico Plumbers is a good example. The business isn't very sexy or glamorous. Yet Pimlico Plumbers has achieved incredible growth, all through PR. It has got coverage everywhere. To get the same awareness through advertising would require ten times the budget.
If you think that you need a charismatic chief executive to pull off PR, you are wrong. At Pimlico Plumbers, boss Charlie Mullins is great with the media, but that is the result of coaching and training. It was exactly the same with Simon Cowell. In the early days Simon came to me and had no experience of television. He needed coaching. With a little help from me he's built up a [pounds sterling]300m empire worldwide. Anyone can be taught.
And in every firm there are personalities. I've just taken on a pawnbroker from the Midlands called Uncles. No stars there. It's just a family firm with three branches. I put them in touch with the BBC and next, spring there is a six-part series at prime time on BBC1 about the business. That has got to be worth millions.
PR is more valuable than display ads, because editorial is more credible and influential. We normally calculate the cost it would take to achieve the same coverage with advertising, and then double or treble it.
In my view, any business is suitable for PR. You just need creativity and vision to create a story.
Max Clifford is the founder and managing director of Max Clifford Associates.
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|Publication:||Financial Management (UK)|
|Date:||Feb 1, 2012|
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