Reading the media nowadays, every day we hear more stories about companies slashing marketing budgets, putting projects on hold and laying off people.

However, there is a very sound business case to be made for keeping (or even increasing) marketing/PR spending during an economic downturn, and here are three reasons why:

Reason #1:   In business school, I remember a lecture a professor gave that was at the time counterintuitive, but now makes perfect sense.  He said that when times get tough, companies should not be making perfunctory cuts across the board of 10% to please investors or to improve their bottom line (net income).  While companies may be focusing on their bottom line by cutting marketing budgets, they are not paying attention to the top line (revenues).   And many of their smart competitors will take advantage of this situation by not cutting, and thereby gaining share of voice and increased revenue.

Reason #2:  Paid advertising (i.e. media space) is very expensive, and especially in times of economic uncertainty, there is a more cost-effective way to reach your target audience - public relations.  Public relations doesn't use paid advertising space so it is much less expensive and can also carry much more credibility among target audiences precisely because it isn't paid.

Reason #3:   In a recession, customers will hold back on spending until they feel things are turning around.  This will shrink the market - but the only winners during this time will be those companies that either happen to sell a product that does well in an economic downturn (e.g. alcohol, lipstick), those who make a unique product that people really want or need (e.g. the iPhone, Lipitor), or, in most cases, those companies that build loyalty with customers by building relationships with them and by providing value.  Relationship-building is an integral part of public relations and without it, your customers will forget why they love you. And that will directly impact sales.

 

At the dawn of our new Obama Nation, the US is finally integrating into the "melting pot" we always described ourselves to be.  It is predicted by the U.S. Census Bureau that by 2050 the nation's Hispanic and Asian populations will triple and non-Hispanic whites would, for the first time in our country's history, represent less than one-half of the total population. 

Mainstream will no longer be the values and traditions of the white elite.  We can no longer segment our communications efforts by separating them into "mainstream" media efforts and "niche/minority" publicity strategies.  Multi-cultural communications cannot be turned on like a switch, mid-way through a major launch initiative or executed post-launch.  As an industry, we need to evolve into one that integrates multi-ethnic issues and trends from the beginning of our brainstorms.  In time, "ethnic majority" populations will transform our country into a multicultural nation and we, as communicators, need to make haste to become sensitive to this new vision of America now.

This past July, REVERBERATE! Marketing Communications attended and exhibited at UNITY 2008 on behalf of one of our clients.  UNITY 2008 is considered to be the "Olympics" of journalists of color.  It takes place every four years and close to 10,000 journalists attended.  All the national TV news networks, newswires and news publications had a presence there. The convention is so impressive that even Obama made an appearance, along with news rock stars like Soledad O'Brian and Wolf Blitzer.

 As is reflective of the trends in the general census, we noted that the majority of journalists that attended our luncheon panel represented "mainstream" media organizations. There were a few reporters from "niche minority" news outlets from the likes of BET, Jet, Ebony, and Telemundo, but the remainder (70%) generally represented mainstream media including The New York Times, ABC News, Reuters, Time and Newsweek, ESPN.  One TV producer we spoke with said, "This is the direction we are going. We want multi-cultural faces on the air.  Although behind the scenes it may not look that way now, this is the way we are moving." 

In fact the media is already working towards increasing diversity behind the scenes in their newsrooms.   UNITY in conjunction with national news and journalism organizations has embarked on the "Ten by 2010"project. The objective of the program is to grow diversity in the media industry through increasing the number of senior managers of color across newsrooms in the US.  The goal is to secure commitments from ten media companies by 2010.  "Ten by 2010"has already received commitments from three top media companies including the New York  Times, Gannett, and Schurz.  

To reach multicultural journalists and multicultural audiences, we must consider not just targeting them through specific niche media outlets, but through major market and national media channels.  We must move to be ahead of the game-- journalists of color and multicultural audiences are a large part of mainstream media, and will be ever more so in the future.   Therefore, sensitivity around potential issues such as racism, sexism, socio-economics and health disparities, must be addressed in the design of any communications program.  This will go a long way towards earning trust and respect from the media and multicultural audiences, increased receptivity to our news pitches, and greater penetration of our clients' messages.

It’s quite common for potential clients, when interviewing PR firms, to ask them how strong are their media contacts.  The assumption is that if we have friends in the media, then surely they will write about our clients.  Right? 

Well, not exactly. 

In fact, many journalists tell us that if we come to them with a story idea that is too commercial or that just isn’t news, they will turn it down.  In fact, if we keep going to them with this type of non-story, we will lose our credibility and strain the friendship.

On the other hand, if we have a good news angle and we have never spoken to a particular reporter before, there’s a good chance that he/she might write about it. 

This is where the creativity and strategy comes in.

So - a better question for potential clients to ask PR firms is "show me how you DIDN'T have media contacts and you achieved significant media coverage," or "show me how your strategy and creativity led to more media coverage."

For instance, if a client is launching a product, and there are already dozens of similar products on the market, we work with the client to understand what is different about their product, and then create tactics to not only create excitement, but also to reinforce the core difference of that product.

If there is no news, then we have to create news, by latching onto a trend, utilizing market research, throwing a high-profile event, etc. 

In the end, clients who spend more energy on understanding how the agency deploys media creativity and strategy get a better agency -- AND better results!

Stop the PR and spin being used to baffle and confuse clients that the size of the agency is an effective tool to compare agencies and potential outcomes!  Most people who read this will be outraged, as vast sums of energy, time, money and rationale have been spent to craft and define how to separate agencies -- namely, self-serving terms such as: large, multinational vs. medium vs. the most colorful descriptor - "the boutique".