Does Public Relations Affect the Bottom Line? Study Shows CEOs Think So

By Campbell, Catherine B. | Public Relations Journal, October 1993 | Go to article overview

Does Public Relations Affect the Bottom Line? Study Shows CEOs Think So


Campbell, Catherine B., Public Relations Journal


Measuring the bottom-line impact of public relations is a mystery to this sampling of CEOs, although they readily acknowledge its importance. CEOs frequently confuse public relations with marketing, and few include a public relations strategist in top management circles.

Although CEOs and other corporate leaders acknowledge the importance of public relations, they do not seem to understand how to translate that support into the structure and dynamics of their own organizations. In a recent study, CEOs were focused on the issues facing their companies but unsure of the most effective strategy for confronting those issues.

A majority of the CEOs questioned felt public relations did have a bottom-line impact. However, they had difficulty defining exactly how public relations contributes to the bottom line.

One CEO said, "You never know too much |about the results of public relations efforts~; you only know if you haven't spent enough."

Those in the study were also readily able to tell the difference between "effective public relations" strategies or tactics and those that were ineffective or poor. Corporate leaders interviewed were able to cite many examples of public relations disasters and public relations successes. In particular, crises like the Exxon Valdez and the savings and loan troubles were viewed as wake-up calls by the heads of U.S. corporations to manage their businesses more in keeping with public expectations.

One CEO called public relations the "insurance" for his bottom line. Effective public relations is the ultimate protection for his company and his shareholders. He learned this lesson from Johnson & Johnson's Tylenol experience. He said that if J&J had not recalled its product, it ultimately would have destroyed an asset of the company because the brand name of Tylenol would have been ruined.

More and more CEOs accept many of the same principles of sound business operation as do public relations practitioners, the study showed. However, the support that CEOs think they give to public relations often falls short of including public relations theory and practice in the strategic management of the company.

In general, the research somewhat mirrors Winokur and Kinkead's informal research ("How Public Relations Fits into Corporate Strategy," PR Journal, May 1993). They generally found that CEOs had good things to say about the importance of public relations in today's organizations. However, this study uncovered several underlying factors in the mind-sets of CEOs that tend to keep public relations professionals out of the boardroom.

Many CEOs in the study considered public relations and marketing the same discipline. This is a troubling finding, especially when it is widely recognized that the CEO's personal views often dictate the type of public relations practiced by the organization.

The 18 CEOs interviewed do not represent a projectable sample of all of today's corporate leaders. But respondents did represent a cross-section of types and sizes of companies. In-depth interviews with this small study group provided insights into how the actions of these CEOs compared with their words of commitment to the public relations discipline.

Covered four main topics

The CEOs were asked a series of open-ended questions that focused on four main issues. Initially, CEOs were asked what the words "public relations" meant to them.

The term "public relations" meant different things to each CEO. Several said it is the image of the company in the eyes of the general public. Several others described public relations as showing the company as a good citizen in the community.

One CEO in the banking industry saw public relations as anything the organization does that involves public contact. "It could be formal marketing or informal customer relationships. Public relations is exactly what it says: it's the relationship with the public, and that takes many forms," he said. …

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