From the Financial Times
12/10/10 11:46 AM
A good PR consultant is worth the moneyBy Luke Johnson
Published: December 7 2010 22:49 | Last updated: December 7 2010 22:49
“Professional poisoners of the public mind, exploiters of foolishness, fanaticism and self-interest.” This is how Ivy Lee and Edward Bernays, founding fathers of the public relations business, were described by a US Supreme Court judge in the early 20th century. The industry has come a long way since then and today every chief executive needs to understand PR and how to make the best use of it.
I learnt some decades ago, in my first enterprise – a student nightclub – that positive editorial attention generates revenues. But I also realised that PR is not advertising: journalists usually only cover items they think will interest their readers, viewers and listeners – and they will put their perspective on it. That means you and your PR adviser must generate real news stories, facts and interviews – with a hook. And do not expect unquestioning flattery. If you want to plant boring, self-congratulatory puff pieces, then buy an advert.
If you decide to embrace PR to promote your business – and I recommend every business does – then prepare to get involved personally. The media likes start-up entrepreneurs, so don’t be shy. Use an agency to gain access to the press, bloggers and so forth, but then tell the tale yourself, because no one can sell your product better.
Some smaller businesses say they cannot afford a few thousand pounds a month to hire external professionals, and so handle media relations in-house. Such sceptics also argue that hired hands never possess the same level of commitment that permanent staff will devote.
The danger with this policy is your team will not inject the fresh imagination into campaigns that outside experts can bring – and that really matters if you want publicity. At Channel 4, we had an outstanding PR department, but also took advice from consultants.
Having owned PR firms, I know it can be an attractive investment. Your clients are on contracts and pay by monthly retainer, so you are not subject to the feast and famine of advertising campaigns. Almost your only material outgoings are staff and premises. A consumer PR agency should generate 20 per cent net profit margins on revenue; a financial PR agency more like 30 per cent.
PR is one of the few segments of the marketing services industry that has benefited from the digital revolution. Most participants, including advertising agencies, media buying shops and design houses, have suffered, as spend on traditional media such as TV and press has been squeezed.
But fragmentation of outlets means the opportunities to place favourable comment are greater than ever. Meanwhile, new avenues of communication such as Facebook, Twitter, Digg and Foursquare are ever more vital: experienced PR input here can make a big difference, as we have discovered with companies like our restaurant chain Giraffe.
The growing importance of PR in business and society is exemplified by the power of kings of the trade such as Alan Parker at Brunswick and Roland Rudd at Finsbury. Both have incredible connections in the City, Wall Street, industry and politics.
The sector has moved on from spin to embrace communications with investors, regulators, politicians and other discreet audiences. Even our prime minister served as director of corporate affairs at television company Carlton for seven years.
Increasingly PR can be about keeping companies and individuals out of the media, and dealing with crises. This can be fantastically profitable work for the suppliers: I imagine BP forked out many millions of dollars over its Deepwater Horizon oil spill to try to defend its image.
Impressions are important. Recruiting help to navigate the complex world of online and traditional media, and “curate” your message, is probably a worthwhile expense for both large and small businesses – as long as you find the right adviser.
Make sure they know their stuff and understand you – and that you get sufficient follow-through from the person who impressed you at the pitch where they won your account. And be realistic about what PR can achieve – it can be useful, but it can’t do everything.