Public Relations

Good public relations (PR) efforts can help a firm create rapport with its customers, promote what it has to offer, and supplement its sales efforts. PR puts a positive spin on news stories and is often perceived as more neutral and objective than other forms of promotion because much of the information is tailored to sound as if it has been created by an organization independent of the seller. PR materials include press releases, publicity, and news conferences. Companies also use PR to promote products and to supplement their sales efforts.

Many organizations that engage in PR have in-house PR departments, media relations groups, or investor relations groups. Other organizations sometimes hire external PR firms or advertising agencies to find and create PR opportunities for them. PR specialists must build relationships with people at different media outlets to help get their stories placed. Universities, hospitals, government organizations, and charitable organizations often hire PR people to help disseminate positive information about their services and to increase interest in what they do. As such, PR is part of a company’s promotion budget and their integrated marketing communications.

PR specialists also help political campaign managers generate positive information in the press. PR specialists can handle crisis communication and create a positive perception of situations when something bad happens to an organization or person. In foreign markets, PR agencies may help ensure product concepts are understood correctly. Getting all PR stories placed in desired media is not guaranteed. A lot of time and effort is spent getting to know people who can help publish or announce the information to the public.

Companies use a variety of tools for their PR purposes, including annual reports, brochures and magazines for both employees and the public, websites to show good things they’re doing, speeches, blogs, and podcasts. Some of the most commonly used PR tools include press releases and news conferences. Sponsorships, product placements, and social media also generate a lot of positive PR.

Press Releases

Part of a company’s PR efforts includes putting a positive spin on news stories. A press release is a news story written by an organization to promote a product, organization, or person. Consider how much better a story or a product recommendation is likely to be perceived when the receiver thinks the content is from an objective third party rather than an organization writing about itself. PR personnel frequently prepare press releases in the hopes that the news media will pick them up and disseminate the information to the public. However, there is no guarantee that the media will use a press release. Some of the PR opportunities companies may seek to highlight in their press releases include charity events, awards, new products, company reports, and things they are doing to improve the environment or local community.

Press releases and other PR activities can also be used for damage control purposes. Crisis communication is the process of countering the extreme negative effects a company experiences when it receives bad publicity. Domino’s Pizza was forced to engage in damage control after two of its employees created a video doing disgusting things to pizzas and then posting it to YouTube. If the publicity is particularly bad, as it was for Domino’s, a company might hold a press conference or prepare a speech for the top executive to give. For example, the president of Domino’s spoke on video to try to control the damage to Domino’s business. The company then posted video 10.10 on YouTube.

Video 10.10. Patrick Doyle, the president of Domino’s, responds on YouTube to a video created by two Domino’s employees, who were subsequently fired by the pizza chain (an example of crisis communication). Source: Dominos Pizza President Patrick Doyle Apologizes for Employees’ YouTube Prank on PublicApologyCentral.

Just as press releases can be used to promote the good things an organization or person does, press conferences can also be held when a company is simply seeking good PR. An organization might hold a press conference to announce that it has hired new, highly sought-after executives, that it is breaking ground on a new building, or to talk about its community service projects.

Sponsorships

Many of you have heard of the Staples Center (figure 10.11), where the Los Angeles Lakers play basketball. But imagine how many more people heard about the Staples Center following the announcement that Michael Jackson’s public memorial would take place there. All the news stories talking about tickets and information about the memorial provided “free” publicity for the centre and for the office supplies store, Staples, for which the centre is named. Staples paid $375 million for the naming rights of the centre, which was built in 1998 (“Crypto.com Arena,” 2009).^[2] Indeed, the chain has gotten a huge return on its sponsorship of the centre.

A sponsorship involves paying a fee to have your name associated with different things, such as the following:

• A particular venue (Roger’s Arena; BMO Field)
• A superstar’s apparel (Tiger Woods’ line of Nike hats and shirts)
• An event (the National Bank Open (tennis))
• A cause (Bell’s Let’s Talk Day (mental health))
• An educational workshop or information session
• A NASCAR vehicle (by Pfizer, the maker of Viagra; see figure 10.12)

Even though sponsorships are expensive, they are growing in popularity as corporations seek ways to strengthen their corporate image, increase their brand awareness, differentiate their products, and reach their target markets. Worldwide, corporations spent over $43 billion on sponsorships in 2008 (“Events Sponsorships,” 2008);^[3] however, the recession has taken a toll, and the new stadium for the Dallas Cowboys still doesn’t have a sponsor with naming rights. Over two-thirds of the sponsorships in North America are for sports, followed by entertainment (e.g., music and performing arts) and causes (e.g., the Susan G. Komen Race for the Cure and “alternative spring breaks” for college students). Other organizations and structures, such as buildings and bridges, may seek sponsorships as a means of generating revenue. Imagine how many people drive across the Brooklyn Bridge in New York or the Golden Gate Bridge in San Francisco and how much awareness an organization would get if they were allowed to pay to have their name on either of the bridges.

Cause-related marketing is one of the fastest-growing types of sponsorships. It occurs when a company supports a nonprofit organization in some way. For example, Tim Hortons sponsors camps for disadvantaged youth, and Bell Canada raises money for mental health awareness. Cause-related marketing can have a positive PR impact by strengthening the affinity people have for a company. However, companies can engage in marketing that intends to deceive or distract its consumers as you will learn in chapter 11.

Product Placements

Getting a company’s product included as part of a television show, movie, video game, special event, or book is called a product placement. When you watch movies or tv shows, you often see different Coca-Cola products being consumed. Apple placed products in twenty-four movies that reached number one between August 1, 2008 and August 1, 2009, while Ford products appeared twenty times and Budweiser products appeared twelve times (“2009 brandcameo,” 2009).^[4]

Video 10.11. How Coca-Cola ‘Places’ Products in Movies and TV by The Coca-Cola Co..

Typically, a company pays a fee to have one of its products placed. But sometimes the company pays nothing if the product is needed for a show in some way or as part of the plot. FedEx did not pay for product placement in the movie Cast Away (“Cast Away,” 2009).^[5] Product placement can improve a brand’s awareness and exposure and often increase its sales. Given the number of exposures an organization receives with product placement, the cost of a product placement can be less expensive than commercials might cost.

Although most product placements appear in television shows and movies, corporations are pursuing other options. For example, they are now placing products in online videos, computer games, and books. The number of product placements is expected to increase as consumers engage with entertainment via streaming services.