PR Draws Budget From Marketing

by lisa ~ November 23, 2009

Nov. 23, 2009 - Hollywood movie studios are slashing marketing staffs and discovering the power of PR. “As studios cut ‘paid media’ (newspaper ads, television spots and billboards) they are leaning more heavily on armies of publicists generating what they call ‘earned media,’ free coverage in magazines, newspapers, TV outlets and blogs,” wrote Brooks Barnes in yesterday’s New York Times.

Not every PR team can take a gaggle of reporters on a junket to Bora Bora. But while Universal Pictures spent twice as much on its promotion of “Couples Retreat,” it “generated at least four times as much media coverage,” according to The New York Times.

Other big print advertisers are coming to the conclusion that PR can be a better “spend” than marketing. Just last week, Victoria’s Secret announced in PRWeek that it had also reallocated budget from marketing to PR. Where are its dollars going? Social media, of course. Instead of magazine advertising, it’s now redirecting funds to support its Facebook page and YouTube channel.

In my experience, financial services companies have long known that the value of earned media far outweighs paid media. And corporate communications teams for publicly traded companies understand that favorable PR can do far more to boost stock prices than ads in business or trade publications.

But for consumer brands, the return on investment from PR versus marketing is fuzzier. Plus the breadth of possible media coverage varies dramatically.

If budgets for 2010-2011 have not yet been set, companies should put into place a mechanism to measure the return on investment from both PR and marketing. That benchmark can guide them in future budget discussions.

Lisa Tibbitts is the principal of Tibbitts Creative, a public relations and marketing service that emphasizes corporate communications. She has an extensive background in financial services and an MBA in marketing. Follow her on Twitter: http://twitter.com/FinancialPR.

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