PR versus advertising - the battle rages on

I put together these words for Marketing Magazine - a new take on a perennial debate...

US merchant, religious leader, political figure and "father" of advertising, John Wanamaker, is often quoted as saying "Half the money I spend on advertising is wasted; the trouble is I don't know which half."

I think John would be scratching his head today - as are many communicators - when asked to justify a modern communications mix. In the past, the leap of faith that dictates that noise in the "free" media and buying ads equates to marketing success has kept many a marketeer employed. But the current global unpleasantness has put every dollar, ringgit, or renimbi under scrutiny that we haven't seen since the post dot com crash days. 

Today we face CEOs who, over the past few decades, have become accustomed to measuring PR and advertising success in the same way you assess fish at a wet market - by the kilogram (of press clippings and ads). Their complimentary marketing programs floated in harmony, mysteriously above and below a magical line.

These same CEOs are now being also being asked to comprehend Facebook groups and Xiaonei pages, tweets with twitter, discussion forums and BBSs, and being told to blog until they can blog no more. 

And when, as is common in these difficult times, they ask what the return on this increasingly complex investment is, all the smoke and mirrors in the world won't protect the un-informed marketing manager.

In an attempt to help our clients answer some of these questions, my company, Text 100, did some digging. Realizing that an unfortunate by-product of tougher economic times is a reduction in marketing spend, we tried to figure out the role that public relations plays in building brand value. How? By assessing the statistical relationship between media prominence (measuring prominence of mentions in unpaid media) and brand value for the 100 companies in Interbrand's 2008 Best Global Brands report.

While I'm not a statistician (and have no desire to throw gasoline on the advertising versus PR fire), the results were interesting on several levels. Overall, we found that how often a company appeared in the press accounted for over a quarter of its brand value. The survey (fact sheet here) determined that the more complex the product, the smaller the role advertising played in its brand value. Net-net, a sizable amount of brand value, particularly for high involvement industries, is tied into media coverage.  

So...PR is good for complex products and makes a difference. But just how good is it? A recent Neilson AIG study concluded that advertising builds confidence in financial brands in crisis. In essence, they determined that those financial institutions that spend more on advertising will maintain more consumer confidence than those that pull back.

Not rocket science. But check out this data, buried under a sub head in the press release. "When asked what factors would increase confidence in the safety and soundness of their financial institution, respondents cited:

- Seeing regular advertising for that institution (25%)

- Receiving regular mail or e-mail offers from that institution (25%)

- Regularly seeing internet offers/advertising from that institution (21%)

- Reading positive stories in the press about that institution (44%)" 

Read that last bullet again. It clearly states that reading positive stories in the press bolsters much more confidence than seeing regular advertising. 

Defence exhibit number three, your honour. TNS study on brands in the digital world provided a couple of choice factoids. When asked what types of digital media have you seen being used, respondents cited dedicated websites, sponsored content, banner ads, popup ads and email as their top five. But when it came down to what people actually trusted, only manufacturers' websites appeared in to rate highly. 

The ad spend went into channels that weren't trusted. Recommendations from friends and family, independent reviews in publications, expert product reviews from websites, product labels on packaging and consumer reviews from websites were Asia's most trusted channels. So, if you rightly assume that trust is a big part of purchase decisions, then channels that fall under the PR domain are the place to spend your money. 

So, is it PR = good, advertising = bad? No, I don't think so. But I think in a time of greater scrutiny, any decision needs to be measured on its ability to create or boost stakeholder confidence. We're talking to the most media savvy generation in history. Advertising will always play a critical role in creating and changing perception. But if you want to create confidence and community, the PR spend seems to fall into the half not wasted.

- Jeremy