Dayton Daily News
By Wendy Gray (special writer)
Public Relations has come a long way from the days of “Poison” Ivy Lee.
A former newspaperman, Lee was hired in 1914 by John D. Rockfeller to change the Standard Oil chairman’s image. Public feeling for Rockfeller had turned to revulsion after a strike at Rockfeller’s Colorado’s mines had been brutally suppressed, with women and children shot by National Guard troops.
Lee was largely successful in turning Rockfeller from robber baron into philanthropist in the public mind. But he also gave a distasteful start to the new field of public relations.
Today’s image-makers are part of a changing “marketing communications” industry that is fusing advertising and promotions with public relations. It is also playing an increasingly important role in company decisions.
Corporate public relations managers “are looked upon as truly functional part of top management,” said William Roberts, director of corporate communications at Philips Industries. “It used to be that public relations was a “yes person” in a corporation. That’s not true anymore.”
In Dayton, marketing communications consists of individual public relations and advertising agencies, as well similar departments inside major companies such as Philips, NCR Corp. or Mead Corp.
The competition is tough: More than 40 companies are listed in the Dayton yellow pages under “advertising agencies and counselors,” while 12 are listed as public relations consultants. And this doesn’t count in-house departments or agencies in other cities, especially New York and Chicago.
In recent years Dayton has seen an increase in the number of both advertising agencies and public relations firms. Advertising has been the stronger of the two in Dayton, say local experts, because of the large demand business-to-business communications.
Business-to-business marketing is much bigger than is business-to-consumer marketing in Dayton, says Dr. Herbert Brown, professor of marketing at Wright State University. This has benefitted direct marketers in Dayton, both in their telemarketing and direct marketing activities, said Brown, whose speciality is the study of direct marketing.
Direct response marketing was growing at a rate of 15 percent a year in the early 1980s, he said, and the business-to-business side of direct response marketing is today the industry’s fastest-growing sector.
Large corporations may have several departments involved in different aspects of marketing communications, as well as using private agencies. Some agencies find niches while others perform many functions.
Advertising companies may specialize in direct marketing, audio/video productions, graphic design for print ads, copywriting, newsletter production, or special event production or may encompass all these functions? Public relations firms may concentrate on a certain issue or industry, or special audience, such as investors. Many firms provides general business public relations and a some or all of these specialty functions.
The mission of these companies has changed subtly but definitely in recent years.
Marketing in America has always been a function of both style and substance. Successful companies have recognized consumers’ desires for both the sizzle and the steak. They’ve learned that consumers will pay for both, and they’ve become more and more sophisticated in identifying and meeting those desires.
But in an increasingly competitive and knowledgeable global marketplace, companies struggle not just to offer the right product but to get the right kind of attention fot that product.
In many cases, that means marketing not only a particular product, but also a corporate image. And it means marketing that image not only to customers, but to everyone who has an interest in the company.
Some companies have explicitly identified those different audiences. NCR Corp., for example, has designated a stakeholder relations staff which addresses customers, suppliers, employees, shareholders, communities, the public and the media.
Advertising – perhaps the most visible aspect of marketing communication – has come under pressure from several fronts:
- The consumer movement, which began in the 1960s, created more sophisticated and discerning consumers.
- A dramatic rise in the number of specialty publications – both for consumers and businesses – has fragmented the market for print advertising, while the growth of cable television has similarly fragmented the broadcast market
- Increased competition on a worldwide basis.
As a result, companies must “get it right the first time,” said Walter Ohlmann, president of Penny/Ohlmann/Neiman Inc, Dayton’s largest marketing communications firm.
“In the old days you could say, ‘let’s try this; if it doesn’t work we can try something else.’ You can’t do that anymore. By the time you’ve tried something else, your money’s gone,” he said.
The rationale for developing and placing advertising has also changed, Ohlmann said, from its earlier reliance on demographics, the method of targeting markets on the basis of sex, age, education, and other easily identifiable characteristics.
Instead, advertisers are relying more on “psychographics”, which identifies groups according to such hard-to-quantify features as values, lifestyle, opinions. Surveys, polls and focus groups can all be used to obtain this information.
Advertisers have moved increasingly to integrated programs carrying a specific message through all media, Ohlmann said. This technique is often used for image-building advertising campaigns.
First National Bank, for example, is conducting a multi-media campaign around the slogan, “Make it now. Make it real. Make it first,” a slogan which will be carried through to the bank’s statement stuffers and cash receipts as well.
Advertising is one means companies use to increase or maintain market share. Promotions – which can be built around such things as price incentives, coupons, and giveaways – are used for the same purpose.
Both ardvertising and promotion can be handled by an advertising agency, although some agencies specialize in a particular service.
Dayton has several dozen agencies which range in size from PON’s $22 million in annual billings and more than 50 employees to one or two person shops billing $1 million or less. Since most agencies are privately owned, no accurate figures exist for financial scope of the Dayton advertising market.
Advertising agencies can bill clients based on a percentage of the media placements they perform, and can benefit from margins thay charge for in-house services such as art design, or audio/visual productions. Overhead for these functions is high, however, prompting many agencies to subcontract for these services. Because of the range of services and pricing structures, printing is almost always purchased from outside vendor, Walter Ohlmann said.
Many advertising agencies, in addition to their advertising functions, also do public relations. One aspect of public relations is to obtain publicity for products.
As opposed to advertising, publicity is not paid for by an identified sponsor, says Dr. Rebecca Yates, professor of marketing at the University of Dayton.
An advertiser who buys television time for a commercial, for example, controls the content of the message. But the message of publicity because it comes from a third party, such as the media, is out of the control of the marketer.
Public relations specialists try to interest those third parties in their client’s product or service. A press release about the opening of a restaurant may lead to a newspaper story or television story, for example.
Mark Anthony, an associate of Piecuch Communications, a Dayton public relations firm, said that one study showed that 111 stories on the inside pages of one issue of the Wall Street Journal originated as press releases. The study, conducted by the Columbia Journalism Review, also said that of those stories, 70 percent ran virtually as they were received, Anthony said.
Public relations services from a regional agency may cost from $60 to $120 an hour, said Bill Piecuch, president of Piecuch Communications. Top people in the field can command $200 to $250 an hour, industry watchers say.
Public relations has become more sophisticated and demanding in recent years, according to Dr. Thomas Skill, associate professor of communications at the University of Dayton.
Thirty years ago, PR people were perceived as “good party throwers”, he said. Today public relations is a management function, and a component of strategic planning.
Bill Piecuch illustrates the function of public relations using a picture of two partially-over-lapping circles. One circle represents the company as it really is, and the other represents the public’s perception of the company. It is the role of public relations to bring those two circles closer together, by working with company management and image portrayed, he says.
“Crisis communications management” is a growing public relations specialty.
Given enough time, any company can expect something important to go wrong, and the way the situation is handled can be critical.
Experts say an example of excellent crisis communications was Johnson and Johnson’s handling of the Tylenol poisonings several years ago. The company’s quick action to publically address the issue and withdraw the product helped the J&J retain a good image despite the problem.
Exxon’s handling of the Valdez oil spill, on the other hand, is cited as an example of communications disaster. The company’s defensiveness and slow reaction to the crisis created substantial public ill.
Competition, a shrinking labor supply, and the availability of information from mass media sources have contributed to making corporations aware of the need to create a positive image, communications experts say.
And while corporate PR staffs have been downsized in recent years, independent agencies have grown nationwide.
Public Relations Journal, a trade magazine, in its May 1989 issue reported that the top 50 PR firms have increased their billings 149 percent to $876 million from the 1983 level of $352 million.
Two of the firms surveyed for this story, Piecuch communications and Winslow Chappell Inc., have opened in the past 18 months, and representatives of those firms say they expect the field to continue to grow. Total public relations agency billings this year will probably reach $1.5 to $2.0 billion, said Bob Chappell of Winslow Chappell.
The downsized corporate relations staffs prompted some of the turn to outside agencies, said Chappell’s partner, Frank Winslow. But those firms with in-house corporate communications staffs sometimes turn to independent agencies he said. “All of us need outside help, even if it’s just ‘trying on’ an idea,” he said.
And part of the growth is due to an increased awareness by executives of the importance of marketing communications.
While advertising effectiveness can be measured in terms of increased sales, it’s tougher to quantify the results of public relations. But more companies are coming to see the value of integrating PR and advertising into one strategy, experts say.
In addition, companies’ communications strategies have been hurt when people the various communications departments did not talk to one another “as candidly or as often as they should have”, says Dr. Ben M. Enis, professor of marketing at the University of Southern California. Now companies seem to be saying “We ought to have one message and people should have access to it”.
In all, advertising and public relations are both marketing functions, Enis says. And both have to meet the purpose of marketing. “it’s like the old saying that you can lead a horse to water but you can’t make him drink. The trick is to make him thirsty enough so he wants to drink.”