Public relations can deliver the authenticity and distinctiveness to elevate a brand, bridging the trust gap in today’s world in ways that advertising cannot. Numerous studies over the years have suggested that public relations often may be more important to building and maintaining brand value than advertising, especially for purchasing decisions related to complex products and services.
Consumers are demanding greater transparency in nearly all aspects of public life: transactions in the financial services industry, executive compensation, government spending, even transparency for social networking websites. In this environment, the most effective messages likely will be those that are transmitted through trusted third parties or by word-of-mouth.
As third-party validation becomes more important, public relations also matters more to brand value. In a recent Nielsen report, researchers asked consumers what factors would increase confidence in the safety and soundness of their financial institution. Only 21 to 25 percent reported that consistently seeing internet and regular advertising would boost their confidence. Nearly 45 percent of consumers reported that reading positive news stories would increase their confidence.
A recent study by Content Analytics assessed how both earned media and advertising spend contribute to brand value. By looking at the relationship between brand value, the study found that media prominence accounts for 27 percent of the variation in a brand’s value compared to only 2.3 percent for advertising. For perspective, research using similar methodology has demonstrated that high SAT scores account for only 10 to 20 percent of the variation in whether or not the first-year college student will earn a high GPA.
In his book, Unleashing the Power of PR, Mark Weiner reported on AT&T’s marketing mix. In the model, he compared public relations to outbound telemarketing, direct marketing and advertising. The model revealed that positive media coverage of AT&T increased the success of other marketing efforts, but the effects were not reciprocal.
A key takeaway: the more complex purchasing decisions a product requires, the more likely it is that buyers will research the category and seek information that they can trust. The current cultural tensions and the economy only serve to amplify the importance of trust and marketing via third-party influencers and neutral venues. These third parties vary widely, from mainstream media to blog, to forums to friends, but consumers are going to rely more and more on trusted third parties for advice.
The bottom line: public relations can be just as effective, and often more cost-efficient, than advertising for building long-term brand value. How are you using public relations to build brand value, both short and long term? Let’s have a conversation.