Experts: PR's more effective in branding than advertising.Many U.S. companies are following a growing trend to hire public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most firms to develop their brands rather than investing in advertising campaigns, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. public relations industry experts. Citing the success of Amazon.com, eBay, Starbucks and Red Bull beverages, Laura Love Laura Love is an American musician born in Lincoln, Nebraska, United States. She describes herself as a "light skinned Black" woman. Laura Love had a difficult childhood, raised by a mother with schizophrenia and in foster homes. , president of Groundfloor Media, said consumers respond more favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to a third-party view of a product than they do to advertising. Despite the insurance industry's conservative culture, it could benefit from this change in marketing strategy, she said. According to its fourth semiannual Semiannual An event that occurs twice in a calendar year. Notes: A bond with semiannual coupons would issue payment once every six months. See also: Annual, Bond, Coupon Bond Trust Barometer survey of 850 U.S. and European opinion leaders, Edelman, a U.S. public relations firm, reports those surveyed are more likely to believe information that they get from articles or news coverage than information in corporate or product advertising. "Building successful companies and brands isn't about selling. It's about building trust and understanding through open, interactive and information-rich relationships," according to the survey. Amazon's success as one of the first online marketers was such an enticing story to the media that all the coverage threw the company into the national spotlight. "At one point, more stories were being written about Amazon than Bill Clinton. That coverage led to Amazon's brand recognition--not advertising," Love said. The same thoughts are echoed in the book "The Fall of Advertising and the Rise of PR," by Al Ries Al Ries is a marketing professional and author. He is also the co-founder and chairman of the Atlanta-based consulting firm Ries & Ries with his partner and daughter, Laura Ries. and Laura Ries Laura Ries is a best-selling author and co-founder of the consulting firm Ries & Ries with her father, Al Ries. Laura attended Northwestern University in Evanston, Illinois where she graduated “with highest distinction” from Northwestern’s School of Speech . The authors say advertising has no legitimate role to play in brand building and that it should be used to protect the brand once it's established. Love also points out that due to the growth in advertising, consumers are becoming turned off to ads and even purchasing products such as TiVo, so they don't have to deal with them. At the same time, the amount of advertising continues to rise--with Robert J. Coen, director of forecasting at Universal McCann reporting that U.S. ad spending in 2004 will increase 6.5% over 2003's figures. The cost of advertising is rising, also. Love reports in 1972, per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. spending on advertising was $110 and rose to $865 in 2002. "It's much less expensive to begin a grassroots campaign than spend millions on ad buys," Love said. Companies can purchase PR coverage for about $5,000 to $20,000 a month, according to Love, with prices rising to $50,000 to $100,000 a month when integrated with television and print exposure. If insurers decide to switch to using press releases to build their brands, Love suggests they begin by identifying their unique benefits that set them apart from the competition--or their wow factor. One example is to develop a public relations campaign showcasing a real life experience and how the insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. helped to change the life of a customer. Reasons to Believe Public relations firm Edelman discovered respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. to its Trust Barometer survey are more likely to believe information from news coverage than information heard or read in advertisements.
U.S. Europe
I believe information that I 86% 83%
get from articles or news
stories more than I believe
information that I get from
advertisements.
I believe information 12% 9%
that I get from
advertisements more
than I believe
information that I get
from articles or news
stories.
Neither 1% 7%
Source: Edelman's Trust Barometer survey
Note: Table made from bar graph.
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