1 Principles of Marketing Seventeenth EditionChapter 15 Advertising and Public Relations Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.

2 Learning Objectives 15-1 Define the role of advertising in the promotion mix Describe the major decisions involved in developing an advertising program Define the role of public relations in the promotion mix Explain how companies use PR to communicate with their publics.

3 Learning Objective 1 Define the role of advertising in the promotion mix. Discussion Question What are the four important advertising decisions that marketers must make? Learning Objective 1 Summary Advertising—the use of paid media by a seller to inform, persuade, and remind buyers about its products or its organization— is an important promotion tool for engaging customers and communicating the value that marketers create for customers. American marketers spend more than $170 billion each year on advertising, and worldwide spending exceeds $518 billion. Advertising takes many forms and has many uses. Although advertising is employed mostly by business firms, a wide range of not-for-profit organizations, professionals, and social agencies also employ advertising to promote their causes to various target publics. PR—gaining favorable publicity and creating a favorable company image—is the least used of the major promotion tools, although it has great potential for building consumer awareness and preference.

4 Advertising Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Companies must do more than simply create customer value. They must also clearly and persuasively communicate that value to target customers. In this chapter, we take a closer look at two marketing communications tools: advertising and public relations. You already know a lot about advertising; you are exposed to it every day. But here we’ll look behind the scenes at how companies make advertising decisions. Although advertising is used mostly by business firms, a wide range of not-for-profit organizations, professionals, and social agencies also use advertising to promote their causes to various target publics. In fact, the 49th largest advertising spender is a not-for-profit organization—the U.S. government, which advertises in many ways. For example ,the Centers for Disease Control spent $48 million on the second year of an anti-smoking advertising campaign titled “Tips from a Former Smoker,” showing people who have paid dearly due to smoking-related diseases. Advertising is a good way to engage, inform, and persuade, whether the purpose is to sell Coca-Cola worldwide, help smokers kick the habit, or educate people in developing nations on how to lead healthier lives. For nearly 20 years, GEICO’s advertising and charismatic gecko have creatively and relentlessly driven home the brand’s value proposition: “15 minutes could save you 15 percent or more on car insurance.” Thanks in large part to an industry-changing, big-budget advertising program, featuring an enduring tagline and a likeable but unlikely spokeslizard, GEICO has muscled its way to the number-two position in its ultracompetitive industry.

5 Advertising Marketing management must make four important decisions when developing an advertising program (see Figure 15.1): setting advertising objectives, setting the advertising budget, developing an advertising strategy (message decisions and media decisions), and evaluating advertising campaigns.

6 Learning Objective 2 Describe the major decisions involved in developing an advertising program. Discussion Question Why has measuring advertising effectiveness become so important? What types of advertising results do marketers measure and what are the issues related to this assessment? Learning Objective 2 Summary Advertising decision making involves making decisions about the advertising objectives, budget, messages and media, and evaluation of the results. Advertisers should set clear target, task, and timing objectives, whether the aim is to inform, engage, persuade, or remind buyers. Advertising’s goal is to move consumers through the buyer-readiness stages discussed in Chapter 14. Some advertising is designed to move people to immediate action. However, many of the ads you see today focus on building or strengthening long-term customer engagement and relationships. The advertising budget depends on many factors. No matter what method is used, setting the advertising budget is no easy task. Advertising strategy consists of two major elements: creating advertising messages and content and selecting advertising media. The message decision calls for planning a message strategy and executing it effectively. Good messages and other content are especially important in today’s costly and cluttered advertising environment. Just to gain and hold attention, today’s messages must be better planned, more imaginative, more entertaining, and more rewarding to consumers. In fact, many marketers are now subscribing to a new merging of advertising and entertainment, dubbed Madison & Vine. The media decision involves defining reach, frequency, impact, and engagement goals; choosing major media types; selecting media vehicles; and choosing media timing. Message and media decisions must be closely coordinated for maximum campaign effectiveness. Finally, evaluation calls for evaluating the communication and sales effects of advertising before, during, and after ads are placed. Advertising accountability has become a hot issue for most companies. Increasingly, top management is asking: “What return are we getting on our advertising investment?” and “How do we know that we’re spending the right amount?” Other important advertising issues involve organizing for advertising and dealing with the complexities of international advertising.

7 Setting Advertising ObjectivesAn advertising objective is a specific communication task to be accomplished with a specific target audience during a specific time. Comparative advertising: Pepsi has long taken direct aim at rival Coca-Cola with comparative ads. “There are few things that grab our fans’ attention as much as seeing our beloved blue and that red next to each other,” says a Pepsi marketer. In developing an advertising program, the first step is to set advertising objectives. These objectives should be based on past decisions about the target market, positioning, and the marketing mix, which define the job that advertising must do in the total marketing program. The overall advertising objective is to help build customer relationships by communicating customer value. Advertising objectives can be classified by their primary purpose—to inform, persuade, or remind. Table 15.1 lists examples of each of these specific objectives.

8 Setting Advertising ObjectivesInformative advertising is used when introducing a new product category to build primary demand. Persuasive advertising is important with increased competition to build selective demand. Comparative advertising is when a company compares its brand with other brands. Reminder advertising is important with mature products to help maintain customer relationships and keep customers thinking about the product. Discussion Question When would an advertiser use each of these types of objectives? Informative advertising: Early producers of HDTVs first had to inform consumers of the image quality and size benefits of the new product. Persuasive advertising: Once HDTVs became established, Samsung began trying to persuade consumers that its brand offered the best quality for their money. Comparative advertising (or attack advertising) is used in almost every product category, ranging from sports drinks and fast food to car rentals, credit cards, wireless phone services, and even retail pricing. Reminder advertising: Expensive Coca-Cola television ads primarily build and maintain the Coca-Cola brand relationship rather than inform consumers or persuade them to buy it in the short run.

9 Setting Advertising ObjectivesAdvertising’s goal is to help move consumers through the buying process. Some advertising is designed to move people to immediate action. For example, a direct-response television ad by Weight Watchers urges consumers to pick up the phone and sign up right away, and a Best Buy newspaper insert for a weekend sale encourages immediate store visits. However, many ads focus on building or strengthening long-term customer relationships. For example, a Nike television ad in which well-known athletes work through extreme challenges in their Nike gear never directly asks for a sale. Instead, the goal is to somehow change the way the customers think or feel about the brand.

10 Setting the Advertising BudgetFactors to Consider Stage in product life cycle Market share Competition Some specific factors that should be considered when setting the advertising budget. A brand’s advertising budget often depends on its stage in the product life cycle. For example, new products typically need relatively large advertising budgets to build awareness and to gain consumer trial. In contrast, mature brands usually require lower budgets as a ratio to sales. Market share also impacts the amount of advertising needed: Because building the market or taking market share from competitors requires larger advertising spending than does simply maintaining current share, low-share brands usually need more advertising spending as a percentage of sales. Also, brands in a market with many competitors and high advertising clutter must be advertised more heavily to be noticed above the noise in the marketplace. Undifferentiated brands—those that closely resemble other brands in their product class (soft drinks, laundry detergents)—may require heavy advertising to set them apart. When the product differs greatly from competitors, advertising can be used to point out the differences to consumers. No matter what method is used, setting the advertising budget is no easy task. How does a company know if it is spending the right amount? Some critics charge that large consumer packaged-goods firms tend to spend too much on advertising and that business-to-business marketers generally underspend on advertising. Companies such as Coca-Cola and Kraft have built sophisticated statistical models to determine the relationship between promotional spending and brand sales, and to help determine the “optimal investment” across various media. Still, because so many factors affect advertising effectiveness, some controllable and others not, measuring the results of advertising spending remains an inexact science. In most cases, managers must rely on large doses of judgment along with more quantitative analysis when setting advertising budgets.

11 Developing Advertising StrategyAdvertising strategy is the strategy by which the company accomplishes its advertising objectives and consists of: Creating advertising messages Selecting advertising media An advertising strategy consists of two major elements: creating advertising messages and selecting advertising media. In the past, companies often viewed media planning as secondary to the message-creation process, which often caused friction between creatives and media planners. Soaring media costs, more-focused target marketing strategies, and the blizzard of new online, mobile, and social media have promoted the importance of the media-planning function. The decision about which media to use for an ad campaign is now sometimes more critical than the creative elements of the campaign. Also, brand content and messages are now often co-created through interactions with and among consumers. As a result, more and more advertisers are orchestrating a closer harmony between their messages and the media that deliver them.

12 Developing Advertising StrategyCreating the Advertising Message and Brand Content Advertising clutter: Today’s consumers, armed with an arsenal of weapons, can choose what they watch and don’t watch. Increasingly, they are choosing not to watch ads. No matter how big the budget, advertising can succeed only if it gains attention, engages consumers, and communicates well. Good advertising messages and content are especially important in today’s costly and cluttered advertising environment. Today, the average household receives about 180 channels, and consumers have more than 20,000 magazines from which to choose. Add in the countless radio stations and a continuous barrage of catalogs, direct mail, out-of-home media, , and online, mobile, and social media exposures, and consumers are being bombarded with ads and brand content at home, work, and all points in between. If all this clutter bothers some consumers, it also causes huge headaches for marketers. Take the situation facing network television ads are sandwiched in with a clutter of other commercials announcements, and network promotions. Such clutter in television and other ad media has created an increasingly hostile advertising environment.

13 Developing Advertising StrategyCreating the Advertising Message and Brand Content Merging advertising and entertainment: Madison & Vine—the intersection of Madison Avenue and Hollywood— represents the merging of advertising and entertainment. Native advertising—advertising or other brand-produced online content that looks in form and function like the other natural content surrounding it on a web or social media platform. Advertisers can no longer force-feed the same old cookie-cutter message content to captive consumers through traditional media. Unless ads provide information that is interesting, useful, or entertaining, many consumers will simply skip by them. To break through the clutter, many marketers have subscribed to a new merging of advertising and entertainment, dubbed “Madison & Vine” in an effort to create new avenues for reaching consumers with more engaging messages. This merging of advertising and entertainment takes one of two forms: advertainment or branded entertainment. The aim of advertainment is to make ads themselves so entertaining, or so useful, that people want to watch them. For example, the Super Bowl has become an annual advertainment showcase. And ads posted online before and after the big game draw tens of millions of views. These days, it’s not unusual to see an entertaining ad or other brand content on YouTube before you see it on TV. Moreover, beyond making their regular ads more engaging, advertisers are also creating new content forms that look less like ads and more like short films or shows. A related form of brand integration is so-called native advertising (also called sponsored content), Examples include Twitter’s promoted tweets, Facebook’s promoted stories, BuzzFeed’s sponsored posts, or Snapchat’s “brand story” ads, branded posts that appear in the app’s “Stories” feed.

14 Developing Advertising StrategyCreating the Advertising Message and Brand Content Message and content strategy: The first step in creating effective advertising content is to plan a message strategy—the general message that will be communicated to consumers. Identifies consumer benefits Follows from company’s broader positioning and customer value creation strategies Message and Content Strategy. The first step in creating effective advertising content is to plan a message strategy—the general message that will be communicated to consumers. The purpose of advertising is to get consumers to engage with or react to the product or company in a certain way. People will engage and react only if they believe they will benefit from doing so. Thus, developing an effective message strategy begins with identifying customer benefits that can be used as advertising appeals. Ideally, the message strategy will follow directly from the company’s broader positioning and customer value-creation strategies.

15 Developing Advertising StrategyCreating the Advertising Message and Brand Content The creative concept is the compelling “big idea” that will bring an advertising message strategy to life in a distinctive and memorable way. Characteristics of the appeals should be: Meaningful Believable Distinctive Message strategy statements tend to be plain, straightforward outlines of benefits and positioning points that the advertiser wants to stress. At this stage, simple message ideas become great ad campaigns. Usually, a copywriter and an art director will team up to generate many creative concepts, hoping that one of these concepts will turn out to be the big idea. The creative concept may emerge as a visualization, a phrase, or a combination of the two. The creative concept will guide the choice of specific appeals to be used in an advertising campaign. Advertising appeals should have three characteristics. First, they should be meaningful, pointing out benefits that make the product more desirable or interesting to consumers. Second, appeals must be believable. Consumers must believe that the product or service will deliver the promised benefits. Appeals should also be distinctive. They should tell how the product is better than competing brands. For example, the most meaningful benefit of using a body wash or fragrance is that it makes you feel cleaner or smell better. But Axe’s Anarchy brand for men and women sets itself apart by the extreme nature of the “Axe Effect” it promises to create.

16 Developing Advertising StrategyCreating the Advertising Message and Brand Content Message execution is when the advertiser turns the big idea into an actual ad execution that will capture the target market’s attention and interest. The creative team must find the best approach, style, tone, words, and format for executing the message. The advertiser now must turn the big idea into an actual ad execution that will capture the target market’s attention and interest. The creative team must find the best approach, style, tone, words, and format for executing the message. The message can be presented in various execution styles, shown on the next slide.

17 Developing Advertising StrategyMessage Execution Styles Slice of life Lifestyle Fantasy Mood or image Musical Personality symbol Technical expertise Scientific evidence Testimonial or endorsement The message can be presented in the following execution styles. Slice of life shows one or more “typical” people using the product in a normal setting. For example, a Silk Soymilk “Rise and Shine” ad shows a young professional starting the day with a healthier breakfast and high hopes. Lifestyle shows how a product fits in with a particular lifestyle. For example, an ad for Athleta active wear shows a woman in a complex yoga pose and states: “If your body is your temple, build it one piece at a time.” Fantasy creates a fantasy around the product or its use. For example, a Calvin Klein “Drive in to Fantasy” ad shows a woman floating blissfully above a surf-strewn beach at sunset in her Calvin Klein Nightwear. Mood or image builds a mood or image around the product or service, such as beauty, love, intrigue, serenity, or pride. Few claims are made about the product or service except through suggestion. For example, Dodge Ram Truck’s moving Super Bowl XLVII commercial—“To the Farmer in Us All”—added poignant pictures to radio-broadcast-legend Paul Harvey’s “So God Made a Farmer” speech, pulling down the number-two spot in USA Today’s Ad Meter ratings that year. Musical shows people or cartoon characters singing about the product. For example, the M&M’s “Love Ballad” ad, part of the Better with M campaign, featured Red singing Meat Loaf’s “I’d Do Anything for Love,” showcasing his commitment to actress Naya Rivera. Personality symbol creates a character that represents the product. The character might be animated (Mr. Clean, the GEICO Gecko, or the Michelin Man) or real (perky Progressive Insurance spokeswoman Flo, Allstate’s Mayhem, Ronald McDonald). Technical expertise shows the company’s expertise in making the product. Thus, natural foods maker Kashi shows its buyers carefully selecting ingredients for its products, and Jim Koch of the Boston Beer Company tells about his many years of experience in brewing Samuel Adams beer. Scientific evidence presents survey or scientific evidence that the brand is better or better liked than one or more other brands. For years, Crest toothpaste has used scientific evidence to convince buyers that Crest is better than other brands at fighting cavities. Testimonial evidence or endorsement features a highly believable or likable source endorsing the product. It could be ordinary people saying how much they like a given product. For example, Subway’s spokesman Jared is a customer who lost 245 pounds on a diet of Subway sandwiches. Or it might be a celebrity presenting the product such as Beyonce speaking for Pepsi.

18 Developing Advertising StrategyCreating the Advertising Message and Brand Content Message execution also includes: Tone Positive or negative Attention-getting words Format Illustration Headline Copy Novel formats can help an advertisement stand out. In this Sherwin-Williams ad, the eye-catching illustration delivers the bulk of the “Where will color take you?” message. The advertiser must choose a tone for the ad. For example, P&G always uses a positive tone: Its ads say something very positive about its products. Other advertisers now use edgy humor to break through the commercial clutter. Bud Light commercials are famous for this. The advertiser must use memorable and attention-getting words in the ad. For example, rather than claiming simply that its laundry detergent is “superconcentrated,” Method asks customers, “Are you jug addicted?” The solution: “Our patent-pending formula that’s so fricken’ concentrated, 50 loads fits in a teeny bottle With our help, you can get off the jugs and get clean.” Finally, format elements make a difference in an ad’s impact as well as in its cost. A small change in an ad’s design can make a big difference in its effect. In a print ad, the illustration is the first thing the reader notices—it must be strong enough to draw attention. Next, the headline must effectively entice the right people to read the copy. Finally, the copy—the main block of text in the ad—must be simple but strong and convincing. Moreover, these three elements must effectively work together to persuasively present customer value.

19 Developing Advertising StrategyCreating the Advertising Message and Brand Content Consumer-generated content: Consumers submit ad message ideas, videos, and other brand content. Incorporates the voice of the customer into brand messages Generates greater customer engagement Consumer-generated content: Taco Bell boosted digital and social media coverage of the introduction of its Fiery Doritos Locos Tacos with consumer-generated videos distributed through Twitter feeds, social networks, and online advertising buys. Taking advantage of today’s digital and social media technologies, many companies are now tapping consumers for marketing content, message ideas, or even actual ads and videos. Sometimes the results are outstanding; sometimes they are forgettable. Perhaps the best known consumer-generated content effort is the long-running annual “Crash the Super Bowl Challenge” held annually by PepsiCo’s Doritos brand. Doritos invites consumers to create their own 30-second video ads, and winners receive large cash awards and have their ads run during the Super Bowl. Discussion Question Ask the students to give examples of contests they have participated in.

20 Developing Advertising StrategySelecting Advertising Media The major steps in advertising media selection are: Determining reach, frequency, impact, and engagement Choosing among major media types Selecting specific media vehicles Choosing media timing The major steps in advertising media selection are (1) determining reach, frequency, impact, and engagement; (2) choosing among major media types; (3) selecting specific media vehicles; and (4) choosing media timing.

21 Developing Advertising StrategyReach is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time. Frequency is a measure of how many times the average person in the target market is exposed to the message. Impact is the qualitative value of a message exposure through a given medium. Engagement is a measure of things such as ratings, readership, listenership, and click-through rates. To select media, the advertiser must determine the reach and frequency needed to achieve the advertising objectives. Reach is what percentage of the target market the advertiser wants exposed to the advertisement during a specific time. Frequency is how many times the advertiser might want an average person exposed to the message three. Media impact seeks to determine, for example, whether the same message in one magazine may be more believable than in another . Advertisers wants to choose media that will engage consumers rather than simply reach them. In any medium, the relevance of ad content for its audience is often much more important than how many people it reaches

22 Developing Advertising StrategyMarketers have discovered a dazzling array of alternative media, like this heated Caribou Coffee bus shelter. As summarized in Table 15.2, the major media types are television, digital and social media, newspapers, direct mail, magazines, radio, and outdoor. Each medium has its advantages and its limitations. Media planners want to choose media that will effectively and efficiently present the advertising message to target customers. Thus, they must consider each medium’s impact, message effectiveness, and cost. As discussed in the previous chapter, it’s typically not a question of which one medium to use. Rather, the advertiser selects a mix of media and blends them into a fully integrated marketing communications campaign. The mix of media must be reexamined regularly. As mass-media costs rise, audiences shrink, and exciting new digital and social media emerge, many advertisers are finding new ways to reach consumers. They are supplementing the traditional mass media with more-specialized and highly targeted digital media that cost less, target more effectively, and engage consumers more fully. Today’s marketers want to assemble a full mix of paid, owned, earned, and shared media that create and deliver engaging brand content to target consumers. In addition to the explosion of online, mobile, and social media, cable and satellite television systems are thriving. Such systems allow narrow programming formats, such as all sports, all news, nutrition, arts, home improvement and gardening, cooking, travel, history, finance, and others that target select groups. Advertisers can take advantage of such narrowcasting to “rifle in” on special market segments rather than use the “shotgun” approach offered by network broadcasting. For example, ads for a Spanish language channel would run in only Hispanic neighborhoods. Another example may be that only pet owners would see ads from pet food companies. Finally, in their efforts to find less costly and more highly targeted ways to reach consumers, advertisers have discovered a dazzling collection of alternative media. These days, no matter where you go or what you do, you will probably run into some new form of advertising.

23 Developing Advertising StrategySelecting Advertising Media Selecting specific media vehicles involves decisions presenting the message effectively and efficiently to the target customer and must consider the message’s: Impact Effectiveness Cost Media planners must also choose the best media vehicles—specific media within each general media type. For example, television vehicles include Modern Family and ABC World News Tonight. Magazine vehicles include Time, Real Simple, and ESPN The Magazine. Online and mobile vehicles include Twitter, Facebook, Pinterest, and YouTube.

24 Developing Advertising StrategySelecting Advertising Media Deciding on media timing: When deciding on media timing, the planner must consider: Seasonality Pattern of the advertising Continuity—scheduling evenly within a given period Pulsing—scheduling unevenly within a given period Media timing: Today’s social media let advertisers respond to events in real time. Arby’s can we have our hat back?” tweet during the Grammy Awards earned the brand more than 75,000 retweets and 40,000 favorites. An advertiser must decide how to schedule the advertising over the course of a year. The firm can vary its advertising to follow the seasonal pattern, oppose the seasonal pattern, or be the same all year. Most firms do some seasonal advertising. The advertiser must also choose the pattern of the ads, continuity or pulsing. Thus, 52 ads could either be scheduled at one per week during the year or pulsed in several bursts. The idea behind pulsing is to advertise heavily for a short period to build awareness that carries over to the next advertising period. Those who favor pulsing feel that it can be used to achieve the same impact as a steady schedule but at a much lower cost. However, some media planners believe that although pulsing achieves minimal awareness, it sacrifices depth of advertising communications.

25 Evaluating Advertising Effectiveness and Return on Advertising InvestmentReturn on advertising investment is the net return on advertising investment divided by the costs of the advertising investment. Measuring advertising effectiveness and the return on advertising investment has become a hot issue for most companies. Top management at many companies are asking their marketing managers, “How do we know that we’re spending the right amount on advertising?” and “What return are we getting on our advertising investment?”

26 Evaluating Advertising Effectiveness and Return on Advertising InvestmentCommunication effects indicate whether the ad and media are communicating the ad message well and can be tested before or after the ad runs. Sales and profit effects compare past sales and profits with past expenditures or through experiments. Advertisers should regularly evaluate two types of advertising results: the communication effects and the sales and profit effects. Measuring the communication effects of an ad or ad campaign tells whether the ads and media are communicating the ad message well. Individual ads can be tested before or after they are run.. Pre- and post-evaluations of communication effects can be made for entire advertising campaigns as well. However, sales and profit effects of advertising are often much harder to measure. For example, what sales and profits are produced by an ad campaign that increases brand awareness by 20 percent and brand preference by 10 percent? Sales and profits are affected by many factors other than advertising—such as product features, price, and availability. One way to measure the sales and profit effects of advertising is to compare past sales and profits with past advertising expenditures or to use experiments to test the effects of different advertising spending levels. More complex experiments could be designed to include other variables, such as differences in the ads or media used. However, because so many factors affect advertising effectiveness, some controllable and others not, measuring the results of advertising spending remains an inexact science. Managers often must rely on large doses of judgment along with quantitative analysis when assessing advertising performance.

27 Other Advertising ConsiderationsOrganizing for advertising Agency vs. in-house International advertising decisions Standardization or Adaptation Organizing for Advertising Different companies organize in different ways to handle advertising. In small companies, advertising might be handled by someone in the sales department or large companies may have advertising departments whose job it is to set the advertising budget, work with the ad agency, and handle other advertising not done by the agency. However, most large companies use outside advertising agencies because they offer several advantages. An advertising agency is a marketing services firm that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs. Today’s agencies employ specialists who can often perform advertising tasks better than the company’s own staff can.. International Advertising Decisions International advertisers face many complexities not encountered by domestic advertisers. The most basic issue concerns the degree to which global advertising should be adapted to the unique characteristics of various country markets. Some advertisers have attempted to support their global brands with highly standardized worldwide advertising, with campaigns that work as well in Bangkok as they do in Baltimore. Standardization has drawbacks because it ignores the fact that country markets differ greatly in their cultures, demographics, and economic conditions. Thus, most international advertisers “think globally but act locally.” They develop global advertising strategies that make their worldwide efforts more efficient and consistent. Then they adapt their advertising programs to make them more responsive to consumer needs and expectations within local markets.

28 Learning Objective 3 Define the role of public relations in the promotion mix. Discussion Question What are the roles and functions of public relations within an organization? Learning Objective 3 Summary Public relations, or PR—gaining favorable publicity and creating a favorable company image—is the least used of the major promotion tools, although it has great potential for building consumer awareness and preference. PR is used to promote products, people, places, ideas, activities, organizations, and even nations. Companies use PR to build good relationships with consumers, investors, the media, and their communities. PR can have a strong impact on public awareness at a much lower cost than advertising can, and PR results can sometimes be spectacular. Although PR still captures only a small portion of the overall marketing budgets of many firms, it is playing an increasingly important brand-building role. In the digital, mobile, and social media age, the lines between advertising and PR are becoming more and more blurred.

29 Public Relations Public relations involves building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Another major mass-promotion tool, public relations, consists of activities designed to engage and build good relations with the company’s various publics. PR departments may perform any or all of the following functions:; Press relations or press agency Product publicity Public affairs Lobbying Investor relations Development

30 Public Relations Press relations or press agency involves the creation and placing of newsworthy information to attract attention to a person, product, or service. Product publicity involves publicizing specific products. Public affairs involves building and maintaining national or local community relations. Another major mass-promotion tool, public relations, consists of activities designed to engage and build good relations with the company’s various publics. PR departments may perform any or all of the following functions:; Press relations or press agency Product publicity Public affairs Lobbying Investor relations Development

31 Public Relations Lobbying involves building and maintaining relations with legislators and government officials to influence legislation and regulation. Investor relations involves maintaining relationships with shareholders and others in the financial community. Development involves public relations with donors or members of nonprofit organizations to gain financial or volunteer support. Lobbying: Building and maintaining relationships with legislators and government officials to influence legislation and regulation. Investor relations: Maintaining relationships with shareholders and others in the financial community. Development: Working with donors or members of nonprofit organizations to gain financial or volunteer support.

32 Public Relations The Role and Impact of PR Lower cost than advertisingStronger impact on public awareness than advertising Has power to engage consumers and make them part of the brand story Public relations can have a strong impact on public awareness at a much lower cost than advertising can. When using public relations, the company does not pay for the space or time in the media. Rather, it pays for a staff to develop and circulate information and manage events. If the company develops an interesting story or event, it could be picked up by several different media and have the same effect as advertising that would cost millions of dollars. When using public relations, the company does not pay for the space or time in the media. Rather, it pays for a staff to develop and circulate information and manage events. If the company develops an interesting story or event, it could be picked up by several different media and have the same effect as advertising that would cost millions of dollars. What’s more, public relations has the power to engage consumers and make them a part of the brand story and its telling.

33 Learning Objective 4 Explain how companies use PR to communicate with their publics. Discussion Question Discuss the tools used by public relations professionals. Is public relations free promotion for a company? Learning Objective 4 Summary Companies use PR to communicate with their publics by setting PR objectives, choosing PR messages and vehicles, implementing the PR plan, and evaluating PR results. To accomplish these goals, PR professionals use several tools, such as news and special events. They also prepare written, audiovisual, and corporate identity materials and contribute money and time to public service activities. The Internet has also become an increasingly important PR channel, as web sites, blogs, and social media are providing interesting new ways to reach more people.

34 Major Public Relations ToolsNews Speeches Special events Written materials Corporate identity materials Public service activities Buzz marketing Social networking Internet Public relations uses several tools. One of the major tools is news. PR professionals find or create favorable news about the company and its products or people. Sometimes news stories occur naturally; sometimes the PR person can suggest events or activities that would create news. Another common PR tool is special events, ranging from news conferences and speeches, brand tours, and sponsorships to laser light shows, multimedia presentations, or educational programs designed to reach and interest target publics. Public relations people also prepare written materials to reach and influence their target markets. These materials include annual reports, brochures, articles, and company newsletters and magazines. Corporate identity materials can also help create a corporate identity that the public immediately recognizes. Logos, stationery, brochures, signs, business forms, business cards, buildings, uniforms, and company cars and trucks all become marketing tools when they are attractive, distinctive, and memorable. Finally, companies can improve public goodwill by contributing money and time to public service activities. Web and social media are also important PR channels. Web sites, blogs, and social media such as YouTube, Facebook, Pinterest, Storify, and Twitter are providing new ways to reach and engage people. As noted, storytelling and engagement are core PR strengths, creating buzz marketing which plays well into the use of online and social media.

35 Copyright