you need read the two article and write a one page reflection, each article in one paragraph. The first one is in this link ,and

Business Horizons (2006) 49, 247-256

Available online at www.sciencedirect.com

SCIENCE d•_ DIRECT'

INDIANA UNIVE7RSIFY

School of Business

ELSEVIER www.elsevier.com/locate/bushor

Public relations comes of age

David Robinson

Haas School of Business, University of California, Berkeley, CA 94720-1900, USA

KEYWORDS Promotion; Public relations; Stunt marketing; Placement

Abstract

Public relations (PR) is an important component of a firm's Integrated Marketing Communications strategy. Once populated by such passive acts as issuing press releases and responding to press inquiries, the field has "come of age" and developed into an active part of the firm's promotional activities. Today's PR employs such techniques as event sponsorship, stunt marketing, charitable activities, and placement (the paid appearance of a firm's products within entertainment content). This paper defines contemporary PR practice and develops rules for successful implementation of these modern approaches to promotion. c 2005 Kelley School of Business, Indiana University. All rights reserved.

1. Beyond disaster management

Once upon a time, public relations (PR) was synon- ymous with "disaster management." This, however, is no longer the case, and the emergence of a number of innovative techniques makes it timely for managers to reconsider PR as a full-fledged part of their firms' marketing communications strategies. In the familiar Marketing Mix (for the sake of simplicity, referred to as the Four P's of Marketing), mangers are encour- aged to group their decision making into the areas of Product, Price, Place (a mnemonic for –channel of distribution"), and Promotion (see Fig. 1).

Promotion includes any activity a firm uses to communicate with customers. It is useful to further define a "Promotional Mix" (Armstrong E Kotler, 2004, p. 399) of five elements: mass media adver- tising, direct promotion, personal selling, sales

E-mail address: [email protected]

promotion, and public relations. Thinking about these five elements separately encourages market- ers to consider a broader range of promotional activities than simply spending more money on "•-advertising." Indeed, mass media advertising (TV and print advertisements and internet banners) is just the tip of the promotional iceberg. Direct promotion encompasses material mailed directly to customers and prospects, and recently has come to include e-mail. Personal selling using a profes- sional sales force or the salespeople of retail channel members is typical for high-ticket consumer dura- bles such as cars and household appliances, and is essential for most business-to-business capital goods such as airplanes and manufacturing machinery. Sales promotion (a temporary change in the price/ quantity offer, such as "buy one, get one free") is ubiquitous in consumer packaged goods purchased in grocery stores and is very effective at generating short-term increases in unit sates, often at the

0007-6813/S – see front matter c 2005 Kelley School of Business, Indiana University. All rights reserved. doi: 10.1016/j.bushor.2005.09.005

D. Robinson

SThe MarketingMx

Product I a Price Sell Promotions

Integrated Marketing Commufications

Figure I The five elements of the promotional mix.

expense of current period profitability and sales in future time periods. Public relations, the fifth element, has often been considered as an after- thought. However, successful marketing managers no longer wait for disaster to strike before consult- ing with their PR counsel. Beyond traditional adver- tising, modern public relations embraces a cornucopia of legitimate techniques to promote a firm, its brands, and its products.

A strategic approach to marketing begins with an understanding that strategy always involves making choices. Successful firms focus their resources as much by choosing which market opportunities to avoid as which to target. Similarly, a managerial approach to the Promotional Mix that is truly strategic will be one that makes choices among the many possibilities. For example, very early in the product life cycle, the firm's promotional objective may be to generate interest in the category rather than generate sales per se. Different promotional techniques achieve different promotional results: awareness, brand recognition, brand preference, product choice, customer loyalty, and so on. In managing the Promotional Mix, it is critical that at[ elements of a firm's communication strategy be coordinated. A familiar example of a failure in this area involves a hapless customer visiting a retail store in response to an advertisement, only to find that the sales staff knows nothing about the advertised sale price offer. Strategic thinking involves making sure that activity in one of the five elements is harmoniously coordinated with the others, a tenet of Integrated Marketing Communi- cations (Schultz, Tannenbaum, 8t Lauterborn, 1993).

2. More effective than advertising? The limitations on mass media advertising are well known. The readership of daily newspapers is

shrinking (Angwin Et Hallinan, 2005), especially among those generations whose members grew up accessing information from the Internet. Advances in digital composition have made it very easy to start new magazines; in fact, the National Directory of Magazines lists more than 10,000 non-scientific periodical titles. While this enables advertising to be narrowly targeted to niche audiences (Godin, 1999), it makes reaching new customers all the more difficult. For example, although advertising can be directed toward people who crochet, it is hard to access those who might be interested in taking up crocheting as a hobby.

No longer can television networks deliver audi- ences of 85% of all viewing households, as Ed Sullivan commanded in the 1950s. Cable and satellite TV have led to the fragmentation of media. With more channels from which to choose, fewer viewers are tuned in to each at any one time (Leonard, 2004). Even worse, from an advertiser's point of view, the most desirable customers may not be watching television at all, choosing to spend their leisure time online, gaming, or watching commerciat-free program- ming. Digital video recorders permit consumers to effectively "zap" commercials by skipping ahead. As those media that do carry advertise- ments become increasingly cluttered (Kotler a Armstrong, 1996), the impact of each mass media advertising expenditure is diminished.

Traditional public relations activities (see Box 1) were characterized by rather passive relations with members of the press. PR professionals nurtured good relationships with reporters, hoped to be called for a quote when there was a good story to be told, and issued press releases describing product launches and staff promotions. Today, marketing managers have a much broader array of PR activities

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Public relations comes of age 249

Box 1

that can be used as a proactive part of the Promotional Mix.

3. The scope of modern public relations

Prior to the emergence of modern PR activities, marketing academics used to define public relations as any non-paid communication between the firm and its public constituencies. However, most mod- ern marketing managers would take issue with the term "unpaid," as external public relations counsel is likely to charge substantial fees and many worth- while PR activities (such as event sponsorship) require expenditures of millions of dollars. This leads to a rather artless, though accurate, contem- porary definition of public relations as the part of the Promotional Mix that involves communication (other than paid mass media advertising and direct promotion) between the firm and its public constit- uencies. Public relations activities seek to promote word of mouth and increase media mentions of the firm and its product.

The long-term goal of any successful public relations activity is to encourage positive consumer perceptions of the firm, its brands, and its products. Through a myriad of PR activities that will be described below, the effect of a successful PR campaign can be identified via two intermediate results: word of mouth and media mentions. These two vectors are interrelated (e.g., positive print articles result in friends talking, friends talking suggest story ideas to reporters), and the specific effect of the various tactics will impact whether a greater emphasis is placed on word of mouth or media mentions as the intermediate result.

3.1. Word of mouth

Word of mouth is the promotional dream of most marketers. In this phenomenon, consumers tell each other about a firm's product(s), with the most

Traditional public relations activities

"o Issuing press releases "o Fact finding for press inquiries "o Coordinating spokespeople to respond to

the press "o Providing public speakers "o Factory tours "o Lobbying "* Investor relations "o Organizing publicity events, such as grand

opening ceremonies

satisfied customers serving as voluntary ambassa- dors for the brand. Word of mouth is particularly effective as a promotional communication because each message comes from a trusted source: a friend, family member, or acquaintance.

Not too long ago, a marketing manager whose work I respect said, "There's not too much we can do about word of mouth. We figure if it happens, that's great." Not everyone shares this view, how- ever. In an influential article on the subject, Dye (2000) defined word of mouth as a legitimate promotional goal and suggested several techniques to help generate it, including creating artificial shortages of in-demand products in order to pro- duce what she termed -buzz." The recently formed Word of Mouth Marketing Association (www.wom- ma.org) seeks to promote best practices in the field amongst its members. Kaikati and Kaikati (2004) recently reviewed a number of "stealth marketing" techniques (such as paying people to talk up the brand) that have been employed to directly pro- mote word of mouth. Word of mouth is particularly desirable as the intermediate goal if there is a narrow group of customers for a product or if the firm is trying to seek the attention of opinion leaders and early adopters. Consider a scenario in which a firm developed a new product to aid autistic children. While media mentions on morning TV news programs would be nice, this would be over-reaching, as most families watching the shows would be uninterested in purchasing the product. Instead, a more strategic approach would be to focus on developing word of mouth within autism parent associations and support groups.

In the realm of modern PR, there is a broad set of legitimate public relations activities that, if suc- cessful, will naturally promote word of mouth. These activities are also capable of promoting a related benefit: media mentions.

3.2. Media mentions

For more than a decade, every Thursday the Wall Street Journal has published a column, "Personal Technology," written by reporter Walter Mossberg. Each week, Mr. Mossberg reviews new technology gadgets on the market, and does not hesitate to mention when a bright idea lacks the execution to be ready for broad consumer adoption. Conversely, when he deems a product "best for most non-tech users," it is guaranteed to be a hit. No technology marketer could spend any amount of money on advertising that would be remotely as effective as Mossberg's endorsement.

This is just one example of the power of what are technically referred to as "editorial mentions." An

Public relations comes of age 249

D. Robinson

editorial mention is defined as any positive refer- marketing approach, while an established firm ence to the firm in the text of an article or on a seeking to adjust its image in a particular local radio or television program. For example, when CBS community might better choose a strategic cam- technology correspondent Larry Magid calls in to a paign of charitable donations. radio show and mentions that he is using Vonage T " VoIP telephony, many consumers who have been 4. 1. Event sponsorship

considering this new communications device will be Almost every major sporting event in the United motivated to subscribe. The good news for market- States now has a commercial sponsor. The Buick ers is that just as much as they crave positive Open golf tournament, the Tostitos Fiesta Bowl editorial mentions, content providers are constant- (football), and the SAP Open tennis tournament ly looking for something to discuss, and there's a are just a few examples of annual sporting events considerable cachet in being the first to discover a that provide corporate partners with name rec- hot new product. ognition. Commercial sponsors receive multiple

Like word of mouth, media mentions do not just mentions of the corporate name on signage and in happen. There is an active give-and-take process press and broadcast reports. Additionally, the between members of the media, who are seeking sponsor is perceived in a generally favorable new stories and new angles on old stories, and context, as attending sporting events is a leisure commercial firms, which are looking for positive activity and everyone shares in the joy of the mentions of their products. In traditional PR, a firm winner. might issue a press release featuring a written Not all sporting event sponsorship expenditures description of a product and send it to as many will necessarily have a positive promotional effect media contacts as possible. Today, this would be (see Box 2). For example, more than 70,000 runners considered a rather passive approach to achieving take part in the annual Bay to Breakers race in San media mentions. The modern approach contends Francisco. The event is a combination of a serious that both word of mouth and media mentions are road race involving top-class athletes and a com- the result of a broad range of specific, proactive munity parade featuring people in bizarre costumes public relations activities, who run or walk. In 2002, the official race t-shirt

was printed with the names of more than two dozen

4. Modern public relations activities corporate sponsors, including rivals Bank of Amer- ica and Wells Fargo. While some might make the

Although conventional public relations activities competitive argument that it is better to compete can still serve a purpose, the new wave of PR directly than risk being the odd firm out, it is hard activities can be grouped into four general catego- to see how the overall reputation of either bank ries: event sponsorship, stunt marketing, charita- was improved by whatever fee they paid for the ble donations, and placement (see Fig. 2). name recognition. This dilemma will not prove to

As with any promotional technique, only some be problematic in the future, though: the event of these activities will be appropriate for each now has a lead sponsor and is known as the promotional need. For example, the launch of a Albertsons Bay to Breakers race, after the grocery breakthrough product is a good match to a stunt store chain.

I Pu,bIic •__• Press Release, – Rela ions Speeches and interviews

Stunt Marketing

Charitable Donations

Product Placement

Editorial Mentions or outh

Figure 2 Public relations activities.

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Public relations comes of age

Box 2

The contrast between an incidental mention on a cluttered t-shirt and marquee billing leads to some practical recommendations for sports event spon- sorship. First and foremost, the event a firm chooses to sponsor should be related to the firm's strategic goals. For example, the Round the World Sailing Race used to be sponsored by British brewer Whitbread, but recently took on the sponsorship of a Ford car division and is now known as the Volvo Ocean Race. While Whitbread's strategic mission was not necessarily a match for the event (sailors and those who would like to own ocean-faring yachts are not especially beer drinkers, and beer drinking is not a typical nautical activity), Volvo benefits from associations of individualism, cour- age, and endurance, and also has a marine engine division. Marketing managers should be especially suspicious of proposed sponsorships that happen to match the personal hobbies of the Chief Executive Officer. Just because the CEO likes watching or playing tennis does not mean that the firm's strategic goals align with the sponsorship of a tennis tournament.

As part of the managerial decision for sponsor- ship, firms compare the multi-million dollar price tag for marquee sponsorship with the equivalent advertising cost of achieving the same number of exposures to target customers. Typically, the ad- vertising cost is six to 10 times the cost of sponsorship. Even so, sponsorship deserves a crit- ical appraisal. While it is true that sponsorship's cost per exposure is less than that of advertising, it is not clear what a company gains from a mere mention of its name in a positive context. Without additional tie-in promotion, mention of the firm's

Effective event sponsorship

"* Have a strategic plan and choose events that match the firm's promotional goals

"* Calculate the return on investment, com- pare with alternatives

"o Avoid clutter: "We'd also like to thank…" "* Negotiate tie-ins up front ", Make a contract for the naming rights "o Make a long-term, multi-year commitment

with options to renew sponsorship "o Coordinate mass media advertising "* Conduct internal promotion to engage

members of the firm "* Be alert for hijacking of the event's image "• Plan for the downside (an ineffective event

or unfortunate incident) "* Monitor effectiveness with tracking studies

name does not communicate any product benefits or give consumers a reason to buy. Although not all promotional budgets will accommodate the multi- ple millions required to be a marquee sponsor, a mere listing as a corporate sponsor in a long list is probably not worth much, and the donation should match.

In return for a substantial financial commitment, firms that engage in sports event sponsorship receive a commitment that signage, press releases, and announcer commentaries will all include the firm's name. Sponsors will also typically negotiate for the rights to peripheral advertising (e.g., spots within broadcasts, billboards adjacent to the stadium) to prevent the possible highjacking of the event by a rival firm. Once a company has identified an event that is a good match for its strategy, it is prudent to execute a multi-year sponsorship agreement with rights to renewal. On the other hand, a case can be made that long-term sponsorships can become taken for granted (see Texaco example), so continuing sponsorship should be critically compared with other possible uses of the promotional budget. Furthermore, ongoing sponsorships should be evaluated over time to confirm that the event continues to match the firm's interests.

Firms that make good use of event sponsorship will use an Integrated Marketing Communications approach and guarantee that contemporaneous mass media advertising ties in to the event. There are many opportunities to engage the firm's own employees, particularly sales force members, in contests for which the prize is a trip to the event. The maximum effect of sports event sponsorship will occur when the other elements of the Promotional Mix fill in communi- cation gaps and advocate specific product fea- tures and brand associations.

In the realm of sports event sponsorship, the now-frequent practice of corporate purchase of stadium naming rights deserves examination. Al- though firms vie against each other for the opportunity to spend millions of dollars to name a sports venue, the positive benefit of this expendi- ture is hardly apparent. Naming San Francisco's baseball stadium "Pac Bell Park" probably did little to heighten the reputation or name recognition of Pacific Bell, the area's dominant local telephone carrier. Although fans enjoyed the new stadium and the local team did well, these factors likely lead to no measurable marketing payoff. Additionally, after the 2003 season, Pac Bell Park was renamed -SBC Park" in honor of parent company SBC, which further diminished any promotional effectiveness for Pacific Bell.

251

252 D. Robinson

Many naming rights deals have backfired when the naming company foundered; for example, Enron Field in Houston, TX (now named for Minute-Maid) and Adelphia Coliseum in Nashville, TN (now know simply as "The Coliseum"). Presum- ably, the attraction to naming rights is that it gives a firm a local presence and announces the firm has achieved a certain level of success. This would account for 3Corn's purchase of the naming rights to San Francisco's famously frigid Candlestick Park. Consumers had little understanding of the name, and the naming rights alone did not convey product benefits. After 3Corn's naming rights expired, the facility was renamed "Monster Park," not after the well-known online jobs bulletin board, but in honor of the company that produces Monster Cables. It's likely the firm's $6 million expenditure will do little for the sales of cables; indeed, any positive name recognition will probably be linked to Monster.com. In sum, stadium naming rights can be considered in the universe of sponsorship, but most often will reward corporate vanity more than corporate strategy.

In addition to sporting events, firms can consider sponsoring cultural and civic events, each with their own potential positive associations. For example, American Express has many years of commitment to ballet performances such as the American Ballet Theatre. Seemingly, ballet patrons are a good match to the type of customer American Express seeks to attract. As is the case for sports sponsorships, firms will gain little benefit from throwing money into the pot with many other corporate donors, and should insist on naming rights, signage, and other recognition while coor- dinating mass media advertising and employee participation. While a long-running commitment makes sense, there is a danger of being taken for granted. Consider the case of Texaco, which sponsored live broadcasts of the Metropolitan Opera every year from 1940 to 2004. While this patronage undoubtedly contributed to Texaco's corporate image with the very small segment of its customers who listen to the opera, it is unlikely that sales of its gasoline were in any way dimin- ished when it abandoned the sponsorship.

Civic events are the newest opportunity for sponsorship. With insurance and security costs on the rise, civic groups have a new willingness to sell full naming rights. For example, Southwest Airlines progressed from being a donor to being the marquee sponsor of what is now called "The Southwest Airlines Chinese New Year Parade and Festival" in San Francisco. On the surface, this is a good fit if Southwest seeks to improve its image in the city or with Chinese Americans, but most likely

has benefits in reminding consumers outside Cal- ifornia that San Francisco is an exciting tourist destination and Southwest can fly you there.

As attractive as event sponsorship may be, a couple of notes of caution are in order. First, a firm that spends good money to sponsor an event should commit to tracking studies to make sure the event is viewed favorably and that the firm has achieved its promotional goals (e.g., aware- ness or positive image). Second, before commit- ting to a sponsorship, the firm should analyze potential risks. For an arts organization, there's always the possibility that the institution will run out of funds and be forced to cancel a season. In civic and sports events involving large crowds, there is always the possibility of unknowable tragedies such as fan riots or acts of terrorism. Although such occurrences are rare, they should be foreseen and mitigation strategies should be prepared. In a final note regarding event sponsor- ship, we can add the additional element of experiences to the consideration of events (Kotler E Keller, 2006).Several firms include experiences as part of their Promotional Mix by substantially expanding the scope of their factory tours (Kerwin, 2004).

4.2. Stunt marketing

An alternative to sponsoring an existing event is to create a pseudo-event for the sole purpose of attracting press coverage; in other words, a "stunt." For example, each Fourth of July, Nathan's Coney Island Hot Dogs stages a hot dog eating contest that achieves international media exposure (especially since the winner of this uniquely American extravagance has, for the last 5 years, been a Japanese National, Takeru Kobayashi). In advocating stunt marketing as a legitimate tool in the promoter's tool kit, one has to be aware that most professional marketers' reactions to stunts include the good, the bad, and the downright ugly. The latter category includes "What would you do to win this car?" promotions run by local radio stations, which prompt contestants to do crazy things like eat light bulbs, tar and feather them- selves, and worse (Box 3).

However, plenty of good examples of stunt marketing exist (see Esfahani, 2005). In November 1999, CarOrder.com spent more than $1 million to pay the tolls and subway fares of New York Com- muters in a "random act of kindness" campaign. The company's expenditure was a fraction of what it would have cost to achieve name awareness via mass media advertising, and the story was picked up nationally and internationally by a broad range of media. In another story trumpeted by media around

D. Robinson252

Public relations comes of age

Box 3

the globe, British hotel chain Travelodge offered free rooms on Christmas Eve in 2004 to any couple named Mary and Joseph (Reuters, 2004).

Although stunts achieve break-through aware- ness, they, like other modern PR tools, are limited in scope in that they do not provide an opportunity to convey complex information about product bene- fits. For that reason, stunts are best suited to the early part of a product life cycle. To be newsworthy, a stunt must be something unexpected, and this requires constant innovation. For example, when Ben and Jerry's began its westward expansion toward becoming a national brand, the firm created a stunt that involved arriving at randomly chosen companies and serving free ice cream to the staff. Though newsworthy in its day, free ice cream would probably no longer be exciting enough to qualify as "filler" on the local TV news.

In addition to matching the promotional task (awareness), a stunt should attract people in the target group (e.g., commuters were a good match for CarOrder.com). An ideal stunt is one that achieves some reasonable social purpose, typically giving something away to a group of people who are appreciative. Stunts that are merely self-serving have a tendency to backfire on the firm's image. For example, when Snapple (a maker of fruit drinks) attempted to set the record for the world's largest popsicle, it ended up flooding New York's Union Square with a not-sufficiently-frozen, sticky goo. Similarly, in Chicago, IBM was accused of vandalism when it hired an agency to stencil "'Peace, Love, and Linux" on city sidewalks.

In sum, stunt marketing comes with risks, but can be considered a breakthrough activity capable of promoting word of mouth and media mentions. The tactic should be used infrequently and be fully integrated with a much broader promotional campaign.

4.3. Charitable donations

Almost all corporations donate money to charitable causes. In many firms, this activity falls under the office of the President or an arms-length founda-

The perfect stunt

* Grabs attention by something novel o Achieves some good social purpose o Provokes a positive emotional response,

such as curiosity or laughter o Reaches the target audience * Comes early in the product life cycle o Is simple and elegant

tion. Through charitable giving, the firm hopes to be a good corporate citizen and promote its image in the community. While generous, this often leads to fragmented, unstrategic giving and a wasted legitimate opportunity for promotion (Grow, 2005). A firm that gives $5000 to a breast cancer awareness drive and another $5000 to support a pediatric AIDS walk might better focus on one event or the other, where the attendees, volunteers, and committed charity members best match the target group for the firm's products (Box 4).

Too often, charitable giving is scattershot and reactive to a plea. The result is that the firm's name is listed without embellishment in a long list of corporate sponsors. Epstein (2005) notes the shift to more concentrated (and often more generous) giving that better matches a firm's strategic goals. For example, McGraw-Hill has increased donations to programs that teach finan- cial literacy, a good match for the firm that owns the Standard and Poor's indexes. Similarly, food producer Betty Crocker is heavily involved with an annual nation-wide bake sale that raises money for a hunger eradication program.

One good example of a long-term charitable commitment is American Express's support of the Statue of Liberty and Ellis Island. The company's ties to the landmarks date back to 1885, when the firm participated in the initial fundraising for the statue's pedestal. In 1983, American Express launched a campaign to help fund renovations and safety improvements, whereby the company pledged to donate a certain amount each time a card member used his or her card, or a new customer applied for a card. During this campaign, American Express saw card use escalate by 28% and new card applications increase by 18% (Steckel, Simons, Simons, E Tanen, 1999).

Critics see the targeted approach to philanthropy as too nakedly self-serving to do much for a firm's image (Epstein, 2005). However, this approach often attracts bigger donations from corporations than

Box 4

Strategic charitable giving * Focus the firm's donations in a few areas * Involve more than money: encourage em-

ployee participation "o Match the recipient charity to the firm's

promotional objectives "* Consider inventing a charitable cause "o Make name recognition contractual * Follow up and audit, if necessary o Schedule regular reviews of effectiveness

253

D. Robinson

would be generated by a standard shakedown of all the likely donors in a community. Additionally, critics point out that many small yet worthy causes may be overlooked by strategic corporate giving. This criticism is not as damning as it appears. Any reasonable charity understands that not every donor will give to every cause. If small charities are unappealing to corporations, they may be a better match to personal or religious philanthropy. Firms should be sensitive to this issue and to the potential for reputation backlash if they move to targeting bigger donations more narrowly. The firm's staff can encourage smatter charities to affiliate with a bi

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