Link Shown Between Startups Who Use PR and Successful Funding

A new study published in the most recent PRWeek magazine once again provides stats proving that public relations is the most beneficial marketing tool for new businesses.

A survey conducted by BIGfrontier Communications Group of Chicago showed that startups who used public relations were 30 percent more successful in getting funding within one to three months than companies that did not. In all, 44 percent of companies who used PR received funding within one to three months of their launch, compared to 14 percent of companies who did not.

Despite the advantages PR is shown to have for startups, however, only 18 of 300 surveyed by the group undertook a public relations program during their funding search.

The survey was conducted between September and November 2008 via polling on social networks and direct solicitations through e-mail to CEOs and CMOs.

Now Is PR's Time to Shine

While it's undoubtedly going to be a tough road for the next 12 months or so for public relations and most anything connected to marketing budgets, there are important distinctions that can be made about PR that could help the profession stand out from other tactics.

Conventional wisdom is that all companies cut their marketing budget during a downturn and that will inevitably lead to a tough time for PR firms. While that's certainly true to an extent for those who rely on major corporations, there are a lot of businesses that continue to grow in a downturn -- particularly those who have an efficiency proposition.

This downturn gives public relations practitioners a great opportunity to let people across small and mid-sized businesses know that PR can be an affordable way to market one's goods or services and that a well-executed PR plan offers efficiencies in comparison to other types of marketing. One of the reasons ad firms are especially hard hit in a downturn is because their model relies on commissions from a total ad spend. Thus, when ad budgets go down, their revenues fall. In contrast, a good PR plan often doesn't rely on the purchase of any expensive supplemental service or product, which means that PR firms have the flexibility to work with a wider range of budgets.

While few people in their right mind would tell you this is a rosy time in the PR and marketing world, it does present a great opportunity for PR practitioners to trumpet PR's advantages and to put them to work for the entrepreneurial companies that will likely lead us out of the downturn.

A Reflection

About a year ago, I was in an office at a mid-sized public relations firm in Manhattan having a conversation with two agency principles that hinged, in part, on the outlook for the business and the economy in general.

I remembered them being quite surprised when I indicated that in 12 to 18 months, things were going to get quite ugly from an economic standpoint once people were no longer able to take equity out of their homes to fund a lifestyle that had grown larger than their take-home pay. The response I got was one of surprise and, at least to some degree, disbelief.

I say that not to prove that I'm an economic soothsayer. In fact, I have no special talents in that area other than those I acquired from my work as a financial journalist for about a decade that include being able to read company financial statements and understanding various economic indicators. My thesis was built entirely on the fact that spending was outpacing wage growth and the spending increase was largely built on home-equity bets.

To bring this back to public relations, I urge all practitioners, financial or not, to gain a better understanding of the economy and what it means to their business. Often we as an industry are very guilty of chasing the latest booming trend only to be burned to a crisp when it goes south. By understanding the economy, practitioners can get a better grasp on which trends are sustainable and worthy of an investment of time or energy.

Loic LeMeur Again Shakes Up Social-Media World

Loic LeMeur, the entrepreneur behind the video community seesmic again made news across the social-media world this week when confronted with rumors about his company's decision to layoff staffers in this difficult economic environment.

Those who follow PR blogs may remember LeMeur's rant about the uselessness of PR, chronicled here. Basically, LeMeur took a shot at PR, saying the whole industry essentially peddled a false claim that there was a "secret" to effective PR and that no outside consultant could do as effective a job at representing a company as its CEO. He went on to say that PR is no science and it's no longer complicated since social media platforms allow companies to manage their reputation directly.

Unfortunately for him, he found out that the situation might be a little more complicated than that following an announcement that his firm was laying off seven people. While that's not exactly newsworthy in this environment, what was interesting was the firestorm of comments that were unleashed following the announcement, including one disgruntled reader who accused the company of failing to have a business model and LeMeur of grandstanding and pursuing personal engagements more than ensuring seesmic's survival.

Of course, there will always be disgruntled individuals in the wake of an action like that taken by LeMeur; the key issue is how you confront the issue itself. On that front, LeMeur took a bold move by addressing the issue head-on and not letting rumors continue to surface. The wrath he encountered probably changed his attitude a bit about the ease with which public perception can be managed; hopefully he understands now that managing public perception isn't as simple as he first laid it out to be.

PR's Image Problem Continues

Anyone who practices in the industry knows that public relations has an image problem. One place you wouldn't expect it to crop up is the annual conference of the Public Relations Society of America.

Penelope Trunk, a career columnist for The Boston Globe reportedly had attendees squirming in their seats after saying "You guys know how to spin anything.... we should all be as good with spin as you are."

While PRSA Chairman Jeff Julin interrupted Trunk to say that spin isn't something practiced by PR professionals and that the true practice of public relations involves building relationships, the sad fact of the matter is Trunk's speech -- at a PR association industry event nonetheless -- shows what a poor job the industry does in explaining to people what it is we do.

Sure there are other professions, such as lawyers, that often fall victim to many negative associations, but because the public as a whole understands what they do much better, they also assume that most of the apples in the barrel are good ones. Not so with PR unfortunately; most people think the average PR person spends his/her time explaining the misconduct of the latest celebrity gone crazy or trying to make a guilty party or company look innocent.

Hopefully after hearing these words, PR practitioners will put themselves on a mission to explain what they do and how it's valuable. It's amazing to me that The Society for Human Resource Management is a heck of a lot better at doing PR for its organization than the organization that represents public relations. Anyone who's watched a primetime show or a Sunday morning program with a highly sought-after demographic has likely saw their ads.

In this time of economic downturn, those who can explain what they do and why it's valuable will succeed. Those who can't will fall far, far behind and potentially even witness failure. It's time for everyone in the industry -- especially the PRSA -- to take the mantle and start defending the profession.