Chapter 11 – Public Relations, Sponsorships, and Direct Promotion
- Understand the concept of public relations and why organizations allocate part of their promotional budgets to it.
- Understand what the different types of public relations tools are.
- Explain how companies use different public relations tools to their advantage.
Public relations (PR) are the activities in which companies engage to create a positive image for a company, product, service, or a person or to address criticism. Press releases, a commonly used PR tool, are designed to generate publicity, but there is no guarantee that the edited media will use them in the stories they write. Edited media includes vehicles such as newspapers, magazines, television and radio. Bloggers and influencers are also groups that must be convinced to use a company’s press release. The ability to distribute information directly is one of the reasons that the internet has been such a powerful communication tool for companies. Using their website and branded social media accounts, companies can communicate with their stakeholders directly.‡
Good public relations efforts can help a company create rapport with its customers, promote what it has to offer, and supplement its sales efforts. PR puts a positive spin on news stories and is often perceived as more neutral and objective than other forms of promotion. When placed with edited media, the information is often perceived as if it has been created independently of the brand when published. Public relations materials include print or digital press releases, publicity, and news conferences. Companies also use PR to promote products and to supplement their sales efforts.
Many companies that engage in public relations have in-house PR departments, media relations groups, or investor relations groups. Other companies sometimes hire external PR companies or advertising agencies to find and create public relations opportunities for them. PR specialists must build relationships with people at different media outlets to help get their stories placed. Universities, hospitals, government companies, and charitable companies often hire PR people to help disseminate positive information about their services and to increase interest in what they do. As such, PR is part of a company’s promotion budget and their integrated marketing communications. PR specialists are also part of political campaigns to generate positive information and to manage negative information. PR specialists can handle crisis communication and put a positive view on situations when something bad happens to a company. In foreign markets, PR agencies may help ensure product concepts are understood correctly.
Other than press releases, companies use a variety of tools for their public relations purposes, including annual reports, brochures and magazines for both employees and the public, websites, YouTube channels and LinkedIn to show good things they are doing, speeches, blogs, and podcasts. Sponsorships, product placements, and social media also generate a lot of positive PR.‡
Part of a company’s public relations efforts includes putting a positive spin on news stories. A press release is a news story written by a company to promote a product, company, or person. Consider how much better a story or a product recommendation is likely to be perceived when the receiver thinks the content is from an objective third party rather than a company writing about itself. Public relations personnel frequently prepare press releases in hopes that the news media will pick them up and disseminate the information to the public.
Getting PR stories placed in the edited media such as television and newspapers is not guaranteed. The internet was a welcome ‘work around’ for companies. They can place the information on their own website, their branded social media such as YouTube channels, Facebook groups, or LinkedIn without having to go through intermediaries such as television and newspapers. Even Facebook has its own YouTube Channel. After the Cambridge Analytica scandal, Facebook posted a number of videos highlighting the way they use algorithms and software in a socially responsible way to manage posted content in order to prevent hate speech and fake news. More recently they have posted a series of videos debunking erroneous information about COVID and vaccination, with the intent to deflect criticism. ‡
Read the following two examples of press releases. The first story sounds like it was written by a news company, but it was created by Apple and their PR team to highlight the introduction of the new iPhone 3G.
Apple Introduces the New iPhone 3G – Twice as Fast at Half the Price
SAN FRANCISCO—June 9, 2008—Apple® today introduced the new iPhone™ 3G, combining all the revolutionary features of iPhone with 3G networking that is twice as fast* as the first generation iPhone, built-in GPS for expanded location-based mobile services, and iPhone 2.0 software which includes support for Microsoft Exchange ActiveSync and runs the hundreds of third party applications already built with the recently released iPhone SDK. In the US the new iPhone 3G is priced at a stunning $199 for the 8GB model, and just $299 for the 16GB model.** iPhone 3G will be available in more than 70 countries later this year, beginning with customer availability in 22 countries, Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, UK and the US—on July 11.
*Based on 3G and EDGE testing. Actual speeds vary by site conditions.
**Based on iPhone 3G (8GB) and first generation iPhone (8GB) purchases. Requires new two year AT&T rate plan, sold separately1.
Apple, Inc., “Apple Introduces the New iPhone 3G,” http://www.apple.com/pr/library/ 2008/06/09iphone.html
The second press release provide an example of how a company such as Stubb’s Bar-B-Q team up with Mobile Loaves & Fishes, a charity that helps feed the hungry, homeless and poor people and restock food banks around the country. These stories may be used as written or rewritten to become part of longer stories.
Stubb’s Teams Up with Mobile Loaves & Fishes to Launch “Feed the World Tour”
Tuesday, May 26, 5 p.m. @ Wooldridge Park
AUSTIN—Stubb’s Legendary Kitchen will kick off its 12-city “Feed the World Tour” this Tuesday, May 26 at 5 p.m. in Wooldridge Square Park, 9th and Guadalupe Streets, by serving chopped beef sandwiches with famous Stubb’s barbecue sauce to homeless and working poor people from one of Mobile Loaves & Fishes’ special catering trucks, which serve people in six cities every day.
Kurt Koegler, president of Stubb’s Legendary Kitchen, will join Alan Graham, Mobile Loaves’ founder/president, and volunteers from the company and MLF volunteers to serve the sandwiches and distribute Stubb’s T-shirts. The Austin- based company chose Mobile Loaves as its partner to kick off the “Feed the World Tour,” which is named for the stated mission of Texas Bar-B-Q legend, C.B. “Stubb” Stubblefield, who said: “I was born hungry I want to feed the world.”
After leaving Austin, the tour will swing through the Southeast, up the East Coast and into Washington, D.C. where the Stubb’s team will compete at the annual BBQ Battle on Pennsylvania Avenue. In each city, Stubb’s Legendary Kitchen and company president Koegler will barbecue for the homeless and help restock depleted food banks.
“Stubb was a cook but more than that, a lover of people. The values that guided his life still guide the company that bears his name. Stubb’s life truly is in every bottle of sauce and marinade we make. All of us at Stubb’s are thrilled to be working with Mobile Loaves and bringing all of Stubb’s Love and Happiness to those who all too often need it most” said Koegler. The economy has placed greater demand on companies like Mobile Loaves and local food banks, so we couldn’t think of a better time to show our support,” Koegler said. “Stubb’s greatest joy was feeding the people who came from all around for a taste of his famous barbecue, and it is an honor for us to fulfill his mission with our Feed the World Tour . We’re honored to be selected as Stubb’s charity partner for the kick-off of this awesome tour,” Graham said. “As someone who once was poor and hungry, C.B. ‘Stubb’ Stubblefield is smiling in heaven to know that his creation is helping feed brothers and sisters on the street here in Austin and around the country. We look forward to connecting Stubb’s with people on the streets here and in the other cities we serve.”
PR activities can also be used for damage control purposes. Crisis communication is the process of countering the extreme negative effects a company gets when it receives bad publicity. In 2013, Lululemon had a problem with its yoga pants stretching to the point of being see-through when in use. Chip Wilson, founder and President at the time, disagreed with the criticism and went on the offensive to defend his company. Watch the video the company released featuring Lululemon Founder, Chip Wilson here.‡
Wilson made the situation worse with the result that women boycotted the brand and its stock price fell (Phillips, 2013). Wilson was asked to step down as Chairman in 2013 and then from the Lululemon board in 2015. Due to the fact the company had no crisis management plan, it took until 2016 and major effort at all levels of the company to repair the damage caused by Wilson. ‡
PR efforts have wide ranging applications, a critical one being when companies expand into foreign markets. Companies that move into foreign markets may be perceived negatively by locals because little is known about the company. In India, the reputation of companies is very important to workers and their families. As a result, U.S. employers recruiting in the tech industry in India often have to work hard to make their brands and products known so people will want to work for them. The companies do so via various PR efforts.
Another area wherein PR efforts may be necessary is when companies want to create awareness of the positive internal decisions they make. A company might hold a press conference to announce that it has hired new, highly sought-after executives, that it is breaking ground on a new building, or to talk about its community service projects. It may also be a way to signal that they are working on a new product or service. They may be seeking alliances, motivating the development of complementary products or encouraging their competitors to react with their own announcement before they are ready (Robertson et al., 1995). ‡
The functions of PR are not necessarily restricted to for-profit organizations. Any establishment that wants to create positive awareness or get in front of a crisis may use PR. For example, the Canadian government uses press conferences to communicate the work they are doing for citizens. In this way, they are letting citizens know what good things they are doing in the hopes that they will vote for the sitting government. Press releases can thus be used to signal to businesses and to other governments, future legislative intentions and funding available that will be used to accomplish the government’s key objectives. ‡