Advertising vs. PR: What pays off?
A research study of the quintessential business dilemma has turned up some surprising answers.
Max Smith, Miami
I run a small company, and the recession is making me re-examine my advertising budget. I ran across claims that publicity may be much more cost-effective than advertising, but found no formal studies on it. I always thought PR was too expensive for small businesses, but in doing my research I posted my project on AllPublicists and got many low-cost offers from publicists. One firm, for example, doesn't charge anything unless they deliver results. However, most companies still put much more reliance on advertising than on PR. Is it because pay-for-results-only publicity such a new option, or am I missing something? Are there any studies on the subject?
By Kathleen Ryan O'Connor, CNNMoney.com contributor
Considering all the time and energy that has gone into pitching everything from snake oil to fabric softener, you would think someone would have answered the age-old question by now: What's better, advertising or public relations?
"It's a little bit of a complex question, actually," says David Michaelson, president of Echo Research and a leader in communications research. "The answer is, it depends on what you want to achieve. Advertising and PR have decidedly different benefits, and each contributes differently to your communication goals."
Michaelson and research partner Don Stacks, a public relations professor at the University of Miami, tackled this dilemma in a major study that began in 2004. So far, they've found was little difference in the results from advertising and PR, contrary to that conventional wisdom that public relations — ie, "free" publicity — is always better.
To conduct their research, Michaelson and Stacks had to find a scientifically rigorous way to measure each approach. They created the fictitious product "ZipChips." The snack was perfect. "It had no sodium, no calories, no fat, tasted great," Michaelson says. "What's not to like?"
They created a fake story about the chips in a mock-up of The New York Times, and also made a fake advertisement. Then they quizzed mall shoppers on their impressions.
"They tended to perform pretty much the same," Michaelson says. "At every single point of measure, when you found out about the very basic level of awareness and intent of purchase, there wasn't a lot of difference between the two."
There were a few areas of divergence. When it came to communicating depth of information, public relations was more effective. Ditto for the "relationship" between a product and person, and for inspiring thoughts about how it might fit into their lifestyle. But with advertising, the message was much easier to control. With PR, you not only can't guarantee placement, you have little say in what comes out on the other end.
So the researchers found that the simple answer is "there is no simple answer," Michaelson says. When you are dealing with choice between PR and advertising, the answer isn't one or the other, it's both.
Veteran publicist Michelle Tennant Nicholson agrees, and notes that effective doesn't have to mean expensive.
There's an old adage in the business, she says: "You pay for advertising and you pray for PR."
Rubbish. "It couldn’t be further from the truth, and a lot of small business owners are confused," says Nicholson, co-founder and co-owner of Wasabi Publicity in Asheville, N.C.
In her view, advertising generates sales while PR boosts your business's visibility and credibility. "PR is one element of many other aspects," she says. "I think people are getting a disservice if they're told, 'don't use advertising' or 'just use PR.'"
So can you drum up good publicity when every penny counts? The concept of paying only for results in public relations is not new, though delivering service exclusively over the Web is somewhat novel. But Nicholson says small business owners can do a lot to garner positive press for the best price of all: free.
Free sites such as PitchRate.com, which Nicholson helped found, and Help A Reporter Out narrow the gulf between you and the media. If you have an area of expertise or compelling personal story behind your business, sign up on those sites and put your shingle out. If it's relevant to a reporter or producer, they will contact you. And it's not just free until a story happens– it's completely free.
Give us your advice: Check out recent “Ask & Answer” questions.
From Tom Ellicott City MD As the owner of an Cave Media Group, Inc., I can tell you that PR is great if it works in your favor, for the time spent on your part. There are many forms of advertising that can help you cut costs as well as drive up your sales. The key is having someone that knows how to sort them out based on knowledge not speculation.
From Total Wellness Systems, Inc./Linden Mathurin Chicago, IL My Name is Linden Mathurin and I am the Owner/President of Total Wellness Systems, Inc. a fitness management company in Chicago; our primary service is personal training in-home and at our Studio. I have learned very early, from day one that you need to use all of you resources. Example, my Bank; I use my Bank to promote all the services that we offer but specifically personal training. They display fliers and posters in the local branches and offer a 50% discount to every new customer that is interested in using my services. The promotion runs for two months and the bank gets a happy customer "me" and a very good chance for my deposits to increase.
From Jennifer Woodard, Detroit, MI Max,
I would like to add a different take ont he public relations side of the issue. With the use of the internet public relations is being used not only as a branding tool, but also as a sales tool. It really depends on the product or service that you are looking to publicize. If you are selling online, you can use pr to draw potential buyers to your website and bring them into your sales funnel, where you help lead them along to become buyers. While this takes times, it allows you to build a relationship with potential buyers which pr is most commonly known for. Through the use of pr you can notify the public of specials you are running or any other information that is useful to current and potential buyers. While getting mentioned in a well-known print article is great, you can use pr to draw in people who are searching for what you sell through search engines and keyword usage.
Jenn
From Mike, Alpharetta GA In today's "wired" world, where 25% of online consumers in the US are using social networking sites and 25% of the US population read blogs on a consistant basis – now take into consideration that more than 75% of all americans have broadband internet access…
Why as a small business owner would you ever want to do direct mail? or spend money using print advertising?
I highly suggest that you read up on Web 2.0, as well as "groundswell" by Charlene Li & Josh Bernoff of Forrester Research. You can create your own advertising/marketing/pr campaign with free tools by using these type of tools.
Best Regards
Mike.
From willsmith123 Actually, if you precisely prove to have much debt, it can be rather difficult to be has bill consolidation with a rather low interest rate, and if you made not attention you could finish becoming to the top still different and different in the debt that when you in the beginning had started.
From Jon, Chicago, IL I will recommend using ePostMailer for all bulk email marketing needs. Its the best mailing list management software I have used so far.
From Shawne Duperon, Novi MI I actually think PR has more power… because when done right, the
reporter is actually endorsing your credibility, your product or your
service. How cool is that?
and..
When you get in a story on ABC, NBC, CBS, or Fox for instance, newsrooms
want to get the biggest bang for their buck, just like any other business. That means your story ends up on all the newscasts in a 24 hour cycle.
In Detroit, that translates into $5700 of paid advertising that was done for free. The game is to create relationships with your media or find
exquisite PR folk that already have established those fab connections
along with deep trust. Thanks for a great inquiry and fab research, Shawne Duperon, Media and Gossip expert
From Jim Bierman, PhD, Rancho Mirage CA PR has helped me get my message out. Radio hosts have contacted me through PitchRate, and now I'm reaching people directly.
I'm a psychologist and author of "Of Sound Mind to Marry; A Reality Check from the Marriage Counselor for Pre-Weds". During this wedding season, I'm trying to get the word out about how people can have successful marriages. Book sales will never support advertising. But through PR and radio, I've made contact with exactly those people who want to hear this message.
From Mike Harris, San Diego, CA The costs of PR and advertising have dropped dramatically in the last two years thanks to some amazing new internet tools and an influx of talent into the freelance pool. Check out tools like Vocus for PR and HubSpot for internet based marketing and lead generation. Just these two alone have cut my marketing costs in half while helping grow my management consulting practice appreciably.
From Stephan Jacob, Phoenix, AZ As a Senior Executive Producer and a Channel Director for VoiceAmerica.com, I am consistently amazed that people react to changes in the economy by eliminating their ad/pr budget.
I think the best advice I have heard on the subject come from Bruce Fairchild Barton, one of the founders of BBDO, a huge advertising company in NY; operating during the time of the Great Depression in the 30's.
Essentially Bruce was receiving some resistence from his clients with regard to advertising during this most turbulent economic time..kind of like now!
What he shared is this: "I understand your interest in wanting to reduce costs so that you can weather the current economic storm, but be careful what you target as a cost cutting measure…"
"Should you desire to eliminate your direct advertising/pr initiatives, there will still be two promotional programs operating that could have a far greater impact on your long term business than you realize."
"The first part is the promotional program that your competitors will launch. Once they relaize you are no longer advertising, they will be sure to let everyone know that this is a sign that you may be going out of business. Whether it is true or not, customers won't do business with a company that is facing financial collapse."
"The second phase is the court of public opinion. Rumors, conjecture, and more are generated by this powerful group.(Today, even more so with social networking, blogs, and etc avaialble.)
Once you have been dragged through this marketplace, its next to impossible to recover."
These weren't just idle words or creative marketing on Bruce Barton's part either.
Matter of fact, Bruce traced the history of those companies that continued to promote during that time versus the ones that did not. I am sure you know what the findings were..but here's the bottom line.
You can effectively trace the history of those companies to operating and thriving business today because they stayed the course in the promotional arena. Those that did not…well let's just say their path of exsistence was a lot shorter.
Have an awesome day..you certainly deserve it.
From Richard Royce I've been around the ad biz – as an entrepreneur and consultant for about 40 years now and I found you can do a little of both PR and advertising with some Bike Billboards. Inexpensive and different enough to get free press and a lot of attention because of the media itself. More info at http://www.bikebillboards.com
From Tony Smit, Austin TX PR is for essential for small non-profits and other social-type businesses that have restricted income and defined expenses.
What I am thinking about at this moment is a PSA – Public Service Announcement – that radio stations run for things like blood-donation drives and health fairs and the like.
From Seth Duncan, San Francisco, CA I would add that the benefits of PR and advertising not only depend on marketing goals, but also the type of products that are being marketed.
My company, Context Analytics, conducted a study last year that correlated brand value with both paid and unpaid media. In the study, we found that unpaid media was more closely associated with brand value than advertising for high-involvement brands (e.g., computers, automobiles, etc.). This suggests that, when buying a complicated and expensive product, input from experts and neutral third-parties tends will drive purchasing decisions more so than advertising. We generally found the reverse for low involvement brands (e.g., apparel, personal care products, products like "ZipChips"), where unpaid media accounted for very little brand value.
A good marketing plan will always involve an integration of PR and advertising activity, but the exact balance of PR and advertising in the marketing mix should be adjusted depending on how complicated the product is.
From Malcolm Petrook, New York City Comparing advertising with PR is comparing apples and oranges. PR is a management tool rarely used to push a "product," but used to change the opinions of various "publics." Full-page advertising in prime media is effective … if you can afford to do it regularly. You get more bang for your buck with PR plus the added influence of third-party endorsement.
I would be very suspicious of any PR firm that charges only for results. No PR executive can gaurantee results in the quality media of record, ie., the NYTimes, Wall Street Journal, Business Week, Forbes, etc. Probably firms that offer results-only payment are shooting at third-rate media, community papers and free give-aways.
Moreover, seeking PR counsel is the same as asking advice from a doctor or lawyer. They cannot gaurantee a cure or a win in court, but they are paid for their professional time.
From Michiel Gaasterland, Amsterdam, The Netherlands Yes tough question, yes hard to generalise, yes it depends on your objectives, etc.
I agree with everyone here who says PR is about building relationships.
And no, PR is not only about getting coverage in media.
The article on CNN is written with a mass-communication headset.
The infrastructure of the social web and search engines now allows us to build relationships directly with consumers and stakeholders.
Here's my blog post on the difference between 'Making noise or building relationships':
From Frank Blackwell UK A mixture of views. An interesting view using Rolls Royce as a good PR example, it has had its fair share of financial troubles!!!!
PR informs
Advertising sells
From José, Lisbon Portugal Hi Max and readers,
How many times we see a commercial several times and can't remember about what product it is until it gets to it ?
Are they effective ?
I don't think so.
In advertising one has to talk about creativity and image.
Creativity as in creating something that will trigger the viewer's attention and image as convincing the market that this product or this company is reliable.
These are two aspects that I consider important, not only in getting potential buyers during the campaign, but also after it.
I find also important that the customer should feel that he/she has the possibility to interact and express opinions about the product or service that you're presenting.
You can even induce intereraction by asking your potential customers to participate in opinion studies, or asking them what they'd like.
I will end with a word called meme, which by checking a dictionary will give you something like : "A unit of cultural information, such as a cultural practice or idea, that is transmitted verbally or by repeated action from one mind to another" .
This is most evident when brands contract known celebrities that will influence the market.
I wish you good luck to your business.
From John H., Albany NY Something to consider when trying to decide between the two is that generally, I think, a PR professional can fill in a bit more on the advertising side than the other way around. PR reps are trained to be out in front, disseminating the company's message and being the face of the company and can be especially effective if they have intimate knowledge of the organization that they work for or are hired by. They often bring the additional benefit of some level of graphic arts/design to go along with the crafting of a message which is in line with advertising. Generally, I wouldn't think of my ad designer as someone I'd want in front of a camera, nor the CEO for fear they'd put their size 12 feet in their mouthes in short order when talking to press who are jonesing for a lead.
From John H. Albany, NY Maybe, but when does that cross the line into "advertising?"
From Russell Johns, Warwick, UK To add to Tracy's last statement…'Advertising has to be consistent to be effective and if you don’t have an adequate budget, short campaigns or one-shot ads will be a waste of money'… and they will be missed if there is no resonance with your intended audience where overall awareness is low.
Successful, effective PR is 'generally' half the cost of an advertisement campaign and far more effective in building awareness of the brand through third party endorsement by your markets influencers. This has knock on benefits in marketing and followup advertisement (if the need is still felt).
From Steve W., Milwaukee, WI I have the privilige to lecture to a college clase in P.R. once a year. To set a baseline for their understanding of the craft, I ask the students to provide me with definitions for advertising and P.R. Rather than providing my own definition, the example I use is that of the Rolls Royce automobile. None of them has ever seen an ad for the Rolls Royce, yet each of them has a concept of the car's value proposition. That concept, I explain to them, is the result of the power of public relations.
From Madhulika Gupta, Mumbai, India I agree with the following views…
- effective does not have to be exensive
- the answer isn't one or the other, it's both
- advertising can generate sales while PR boosts your business’s credibility
However, what I would also like to add is that advertising is a manufacturer's/ marketer's claim, whereas PR brings about a third party view i.e the reporter's. So, when a business wants to state its claim, advertising is the answer; but when the business is looking for external endorsement, PR offers a credible way to do so.
In the end, one cannot replace the other, so using the right mix of both, at the right time, in the right media, and with the right messages will be found to be most effective when making an overall assessment of the succes of the business' communication.
From Wendy Marx, Trumbull, CT Thank you for your insightful article. I would disagree, however, that you can't control the message in PR. The web has upended the old PR model and PR professionals can become their own or client's publishers and control the message to a much greater degree than before.
From Brandon Watkins, Ann Arbor, MI Tracy from Asheville touched on this, but the biggest advantage of PR is the third-party validation you get from the article. It's almost like getting a testimonial for your product (assuming, of course, the article is positive). You always run the risk that the article won't be positive, and you can't control the language of how your product or service is presented. But in modern marketing/promotion I would argue that venues that offer social validation are a critical addition to advertising.
As to advertising, consistency is more important than the size of the ad. A business-card sized ad run consistently is more effective than a full-page ad run sporadically. You can also ask for discounts for buying several issues at a time of advertising. Don't give up on advertising, but skip big and/or colour ads and spread a small budget out with smaller, b&w ads. Combined with publicity (which includes both articles and opportunities to be quoted in articles about your industry) you will see the best results. You want a return-on-investment, but whether it's money or time you have to invest something, first.
From Amy Zucker, Indianapolis, Indiana PR offers many added-value benefits that advertising does not – especially in today's Web environment. I recommend PR to my clients with a limited budget because we can re-purpose press releases and media coverage for many other sales/marketing initiatives. For instance, our clients use media reprints as part of their sales kits and presentations. We e-mail our clients' prospects links to press coverage or press releases (about our clients)to stay top-of-mind, establish credibility and promote new products/services. We also optimize all press releases for search engines so our PR efforts actually generate qualified leads for our clients. You just can't re-use, re-purpose ads like you can PR materials and results.
From Tracy Adler, Asheville, NC I learned as a restaurant owner that paid advertising can be a tricky subject and its success often depends on the industry. Word of mouth is one of the most powerful forms of advertising you can get. Next would be media placements. The mention from a journalist goes further in the consumer’s mind than a paid advertisement boasting about your product. Thanks to the internet, it’s easy to get in front of the media. I've used http://www.PitchRate.com to land interviews and my sales have tripled. Advertising has to be consistent to be effective and if you don’t have an adequate budget, short campaigns or one-shot ads will be a waste of money.
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