THINK Public Relations Wilcox/Cameron/Reber/Shin

Ch 4: Today’s Practice: Departments and Firms

Overview Public relations departments The trend toward outsourcing Public relations firms

Public Relation Departments Importance of PR to today’s organizations PR pros seen as strategic communication managers. PR offers 184% ROI. CEOs want communication that is strategic, research-based, and two-way.

Public Relations Departments Organizational factors determine the role of public relations Large vs. small firms Management perceptions C-suite attitudes/reporting issues (C-suite: CEO, CFO, COO / ‘c-level executives) 2012 report noted that 60% of the respondents strongly agreed that the public relations function is well received in the C-Suite and that members of the public relations/communications department are invited to attend senior-level strategy meetings.

Public Relations Departments Organizational factors determine the role of public relations: Capabilities of the public relations executive One study: Factors that determine whether corporate public relations practitioners have influence in the company: (a) Perception of value by top management (b) Practitioners taking on the managerial role c) Reporting to the CEO (d) Years of professional experience

Public Relations Departments How public relations departments are organized Leader titles Reporting hierarchy Size of departments

Public Relations Departments’ Organization The head executive of a public relations or similarly named department typically has one of three titles: manager, director, or vice president. A vice president of corporate communications may have direct responsibility for the additional activities of advertising and marketing communications. Common divisions found in large corporations Media relations, investor relations, consumer affairs, government relations, community relations, marketing communications, and employee communications

Line and Staff Functions Line manager Delegates, sets goals, hires, influences others’ work Staff people’s functions, in contrast: Little direct authority Indirectly influence others’ work through suggestions, recommendations, advice PR is a staff function. Access to management PR influence is linked to access to top management. Recommendations to management help in formulating policy.

What Do You Think? How does the influence of line and staff functions differ? This question will stimulate discussion of the differences between line and staff functions.

Levels of influence Management experts state that staff functions in an organization operate at various levels of influence and authority. At the lowest level, the staff function may be simply advisory: line management has no obligation to take recommendations or even request them. What else?  This question will stimulate discussion of the differences between line and staff functions.

Levels of Influence Advisory: Management has no obligation to request or act on recommendations Purely advisory practitioners are often ineffective. Compulsory-advisory: Management is required to listen to public relations’ perspective before acting. Concurring authority: PR and others must agree on an action.

Example When the public relations department serves in a purely advisory role, it often is not effective. The Susan G. Komen for the Cure foundation, the nation’s leading breast cancer advocacy group, learned this lesson in 2012 the hard way. It created a storm of protest when word got out that its board of directors had decided to stop giving grants to Planned Parenthood to provide poor women with breast cancer screenings.

The Challenge of Being a Spokesperson One duty of a public relations practitioner is to serve as an organization’s official spokesperson. What a spokesperson tells the media is not considered a personal opinion, but rather management’s official response or stance to a situation or event. Lauren Fernandez, a public relations professional and blogger, says, “As PR professionals, we represent a client, brand, and organization.” :

The Challenge of Being a Spokesperson The challenge comes when a spokesperson may personally disagree with what he or she is asked to say on behalf of the organization. Or, in some cases, a public relations professional may be asked to give information to the media that he or she knows is untrue or deliberately misleading. Chapter 4 has some examples to read about…

Sources of Friction in PR Legal Differences on public statements -- Legal staff members are always concerned about the possible effect of any public statement on current or potential litigation --- BUT --- Lawyers often frustrate public relations personnel by taking the attitude that any public statement can potentially be used against the organization in a lawsuit.

Sources of Friction in PR Human Resources Differences regarding employee communications -- Turf battles can erupt between human resources and public relations over who is responsible for employee communications. Human resources personnel believe that they should control the flow of information; public relations administrators counter by stating that satisfactory external communications cannot be achieved unless effective employee relations are conducted simultaneously.

Sources of Friction Advertising vs. PR within the corporation Competing for resources Philosophical differences Marketing Focuses on one public: current or prospective customers Marketing personnel, like advertising staff, tend to think exclusively of customers or potential buyers as key publics. In contrast, PR practitioners define publics in a broader sense—as any group that can affect the operations of the organization.

The Trend toward Outsourcing Almost 90 percent of Fortune 500 companies use outside PR counsel in varying degrees. The need for additional “arms and legs” -- Instead of relying exclusively on an in-house department or using just one firm, today’s major corporations now use multiple firms for various projects. To obtain a unique perspective and market insight

Most Frequently Outsourced Activities Writing and communications Media relations Publicity Strategy and planning Event planning

So that was all about PR within corporations… What about PR firms?

Public Relations Firms Firms have regional, national, and global reach. PR Firms can complement in-house expertise. PR Firms offer diverse services. Rapid growth of PR firms Emphasis on the counseling aspect Firms range in size from one or two-person operations to global giants such as Edelman, which employs over 5,800 (see text difference) professionals in 14 U.S. offices and over 65 offices around the world. (2017 figures)

Global Reach Firms and their offices or affiliates are situated in most of the world’s major cities and capitals. Substantial revenues from international operations

2016 Top PR Firms 1. Edelman, New York, NY -- $874,968,000 +2.4 (5,903 empl.) 2. W2O Group, San Francisco, CA -- $122,715,000 +33.0 (472 empl.) 3. APCO Worldwide, Washington, DC -- $120,622,100 +1.0 (672 empl.) 4. Finn Partners, New York, NY -- $76,706,000 +7.3 (485 empl.) 5. ICR, New York, NY -- $55,663,450 -1.0 (158 empl.)

Text list of Top 5 Edelman Fleishman-Hillard Waggener Edstrom Ruder Finn Finn Partners listed on previous page launched in 2011 by Ruder Finn International? Ruder Finn headquarters is in Beijing APCO Worldwide

Public Relations Firms The rise of communication conglomerates Many firms are owned by communication conglomerates and thereby can offer integrated services (i.e., PR and advertising expertise) through affiliates. The reason for acquisition of PR firms Natural evolutionary step of integration Economic interest

Changes… Public relations firms are beginning to discard the term public relations as part of their official names. Ex. Fenton Communications describes itself as a “public interest communications firm.” Increasingly, public relations firms are emphasizing the counseling aspect of their services, although most of their revenues come from implementing tactical aspects, such as writing news releases and organizing special events or media tours.

Public Relations Firms Structure of a counseling firm Depends on size of firm Small firm may only have owner and one or two associates. Large firms have an extended hierarchy.

What Do You Think? What are the pros and cons of employing a public relations firm? Pros and cons This question will stimulate discussion of advantages and disadvantages of using outside firms.

Public Relations Firms Pros and cons of using a public relations firm Advantages Objectivity Skills and expertise Extensive resources Offices throughout the country Problem-solving skills Credibility Disadvantages Superficial knowledge Part-time commitment Need for long briefing Internal resentment Need for direction Need for information and confidence High costs

Fees and Charges Basic hourly fee, plus out-of-pocket expenses Most widely used among large firms Retainer fee Fixed project fee Pay for placement Seldom used

Services Provided by PR Firms Marketing Communications. Promote products and services through such tools as news releases, feature stories, special events, brochures, and media tours. Executive Speech Training. Coach top executives on public affairs activities, including personal appearances. Research and Evaluation. Conduct scientific surveys to measure public attitudes and perceptions.

Services Provided by Public Relations Firms Research and Evaluation. Conduct scientific surveys to measure public attitudes and perceptions. Crisis Communication. Counsel management on what to say and do in the event of an emergency, such as an oil spill or a product recall. .

Services Provided by PR Firms Media Analysis. Examine appropriate media in order to target specific messages to key audiences. Community Relations. Counsel management on achieving official and public support for projects such as new building construction or factory expansion. Events Management. Plan and conduct news conferences, anniversary celebrations, rallies, symposia, and national conferences. Public Affairs. Prepare materials and testimony for government hearings and regulatory bodies; prepare background briefings.

Services Provided by PR Firms Media Analysis. Examine appropriate media in order to target specific messages to key audiences. Community Relations. Counsel management on achieving official and public support for projects such as new building construction or factory expansion.

Services Provided by PR Firms Events Management. Plan and conduct news conferences, anniversary celebrations, rallies, symposia, and national conferences. Public Affairs. Prepare materials and testimony for government hearings and regulatory bodies; prepare background briefings. What is OUR ‘PR team’ doing? 

What is OUR ‘PR team’ doing? Marketing Communications Events Management This week – we need a plan and assignments: ‘Managers’ define the plan and give each team member specific work to do by next Thursday Includes assigning different PR tasks: NED, Homecoming, East Texan, KKOM, etc.

An IABC survey of CEOs showed, regarding the value of public relations, that it pays nearly a _____ percent return on investment. 200

Small-scale organizations of low complexity usually have public relations working in roles that are primarily: technical.

Many practitioners self-select technician roles because they: lack knowledge in research, environmental scanning, problem solving, and management.

They relegated public relations to a purely advisory role. In the Susan G. Komen for the Cure-Planned Parenthood case, the Komen board made what major public relations error? They relegated public relations to a purely advisory role.

at least three times a person’s salary. The standard industry practice among public relations firms is to bill clients: at least three times a person’s salary.

What are some of the major sources of friction for the public relations function within an organization? Human resources, Legal Marketing …

The trend toward purchasing expert communication services from outside the organization is referred to as: outsourcing

A person who formulates recommendations and advises management in an organization is fulfilling a _____ function. staff

If a benefits brochure prepared by the personnel department must have approval from the PR department before production, the PR department is described as having a ____ authority. Concurring

Today’s public relations firms offer all of the following EXCEPT: A) executive speech training. B) research and evaluation. C) legal counsel. D) events management. E) crisis communication. Legal counsel

Clients often criticize public relations firms for having what? superficial grasp of the client’s problems.

What do we think of as the ideal relationship between marketing and public relations? Public relations is a distinct discipline, and must be practiced separately.

Other names used for public relations departments include _____ corporate relations. public affairs. marketing communications. community relations …

Branding and corporate reputation _____ is a service many public relations agency provide that is designed to establish company brands and promote reputation. Branding and corporate reputation

What are some of the are multinational communication conglomerates? Omnicom, WPP, Interpublic, Publicis …

The most reputable Fortune 500 corporations tend to think of public relations as a _____ tool. strategic management