Chapter Eleven relationship building: public relations, sponsorship, and corporate advertising


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Chapter Eleven



To explain the role of public relations, sponsorship, and corporate advertising in relationship marketing and integrated marketing communications. By using public relations, event sponsorships, and institutional advertising, a company can improve the effectiveness of all its marketing efforts. (p. 336)

After studying this chapter, your students will be able to:

  1. Distinguish between advertising and public relations.

  2. Discuss the key elements of crisis communications.

  3. Describe the difference between press agentry and publicity.

  4. Identify the tools public relations practitioners use.

  5. Explain how event sponsorship can fit into an IMC plan

  6. Define advocacy advertising and debate its role in a free society.

  7. Explain the role of corporate identity advertising.

Teaching Tips and Strategies

Students will become more familiar with the role of advertising versus PR throughout this chapter. I recommend starting class with examples of PR nightmares such as the book’s example on (p.337) Firestone and Ford. Enron, World Com, Tyco, and let’s not forget the Tylenol scandal of the eighties (this helps to reinforce to students that PR and advertising have two different functions).

How did Johnson & Johnson walk away from that debacle with a brand still intact and trusted? They utilized public relations, and advertising to their advantage in times of crisis. I remember the CEO of J&J informing the public that they would not bring back Tylenol until it was a trusted/safe brand again. He did just that, and won not only accolades from the business community but regained customer confidence.

Tylenol is still a trusted brand by hospitals, consumers and the community. This contrasts so terribly, with what happened to Firestone and Ford. As the book discusses Firestone/Ford lost market share because of tire blowouts. Instead of taking a united front, the companies decided to squabble (exact opposite of Tylenol’s approach) and blame each other for the problems.

Consumers started hearing reports of Ford asking for tires that did not meet the specifications of a big vehicle. Firestone swore it was the Ford Explorer design, and of course, Ford, countered Firestones’ tires were faulty. During this turbulent time, both companies suffered severely, although some now argue they are bouncing back.

A good discussion to begin with your class is what did Ford/Firestone do differently then J&J? What could they have done better? It is important to remind students that money was an issue here. If Firestone had recalled all the tires, what would the cost have been? If memory serves me, correctly, Ford wanted Firestone to recall all of the tires and Firestone wanted to recall just a certain lot. The sad thing, at the end of the debate between Firestone and Ford is who really won? Firestone lost market share. Ford lost market share, and the public lost trust in both companies. This discussion with your class might convey, with all the scandals going on today, that consumers still want people to take responsibility for their actions. Taking responsibility might help consumers trust the brand again, thus reversing the market share declines of the last few years.
To help emphasize the differences between public relations v. advertising please show your students the excellent portfolio review on (p. 360-363).

Lecture Outline

I. Introduction (pp. 337-339) — Ford Motor Co. and Firestone Tires faced a huge public relations challenge following a series of auto deaths attributed to blowouts of Firestone tires mounted on Ford Explorers. While Ford handled the crisis with skill, Firestone’s timing was way off, creating a public relations disaster for the brand and the parent company.

II. The Role of Public Relations (p. 339) — Public relations (PR) is the management function that focuses on the relationships and communications that individuals and organizations have with other groups (called publics) for the purpose of creating mutual goodwill. As previously discussed, every company or organization has relationships with groups of people affected by its actions: employees, customers, stockholders, competitors, suppliers, legislators, or community people.

Marketing professionals refer to these groups as "stakeholders," because they have a stake in the company's success. In PR terminology, each group is considered one of the organization's publics.

The goal of PR is to develop and maintain goodwill with most, if not all, of its publics. However, a company's publics change constantly. In short, the role of PR is to affect public opinion and improve the company's reputation, molding long-term relationships.

A11-1 The Crain’s New York Business Ad (p. 340)

  1. The Difference between Advertising and Public Relations (p. 340)

Example: Both advertising and public relations use the media to create awareness (p. 340)

1. Advertising reaches its audience through media for which the advertiser pays; advertising appears just as the advertiser designed it, with the advertiser's bias built in. Knowing this, the public views ads with some skepticism.

2. Public relations communication is less precise than advertising because it is not openly sponsored or paid for by the advertiser; people receive these communications as new articles, editorial interviews, or feature stories after the messages have been edited — filtered — by the media. The public thinks PR comes from the medium rather than the company; thus, the public accepts and trusts PR more readily.

B. Advertising and PR in the Eyes of Practitioners (p. 341)

1. Advertising professionals are sales or marketing oriented; they tend to use advertising and public relations as "good news" vehicles.

2. Public relations people view PR as a management discipline that encompasses a wide range of activities, from marketing and advertising to investor relations, and government affairs, to build relationships with all publics.

3. To PR pros, public relations should be integrated “corporate” communications, which is certainly broader than what most people consider integrated “marketing” communications

4. When PR activities are used as a marketing tool, the term marketing public relations (MPR) is often used.

  1. In an IMC program, advertising and MPR should be closely coordinated.

Exhibit 11-1 Top 10 PR agencies in 2001 (p. 341) A11-2 (p.341)

Ethical Issue; “When is Advertising Not Really Advertising? (pp. 342, 343)

III. The Public Relations Job (p. 342)

A. PR Planning and Research (p. 342). The first function of PR practitioner is to plan and execute the public relations program. Part of this task may be integrated with the company's marketing efforts (for instance, product publicity), but the PR person typically takes a broader view. He or she must prepare an overall public relations program for the whole organization. A common form of public relations research is opinion sampling: the shopping center or phone interviews, focus groups, analysis of incoming mail, and field reports. Some advertisers set up toll-free phone lines and invite customer feedback.

B. Reputation Management (p. 344) is the name of the long-term strategic process of managing the standing of the firm with various publics. PR practitioners employ a number of strategies and tactics to help them manage their firm's, or client's, reputation, including:

1. Publicity and Press Agentry (p. 344)

a. Publicity is the generation of news about a person, product, or service that appears in print or electronic media; media are not paid to run the publicity, but the company may go to considerable expense to get coverage.

1) To be picked up by the media, publicity must be newsworthy.

  1. Unintentional publicity may be impossible to control — an “unplanned message” in IMC terms.

Example: Aside from Advertising, publicity can help companies distribute information (p. 343)

b. Press agentry is the planning and staging of events that will attract attention and generate publicity.

c. Successful PR practitioners develop and maintain close, cordial relations with their editorial contacts.

2. Crisis Communications Management (p. 344). As the Ford/Firestone episode illustrates, one of the most important public relations tasks for any corporation is crisis management. Companies that have spent decades earning consumer trust can lose it overnight if they mismanage a crisis. A classic case of exemplary crisis management was Johnson & Johnson's response to the Tylenol poisonings of 1982. Management immediately formulated three stages of action:

a. Identify the problem and take immediate corrective action.

b. Cooperate with outside authorities/media in the investigation

  1. Quickly rebuild the company's brands and overall image (all message should be channeled through the corporate communications department).

3. Community Involvement (p. 345). The purpose is to develop a dialog between the company and the community; encourage executives and employees to contribute to social and economic growth of community and set up and publicize community programs. Requires a focused program to guide “mission marketing” activities.

Ad Lab 11-A “Green Advertising” (p. 346)

C. Other Public Relations Activities (p. 346). In addition to planning and reputation management, public relations professionals are often involved in activities like:

1. Public Affairs and Lobbying (p. 346)

a. Public Affairs involves dealing with elected officials, regulatory and legislative bodies, and community groups. Policy expertise is needed.

b. Lobbying refers to efforts sponsored by an organization to inform and persuade government officials to act in a way that will benefit the organization; big business.

2. Speechwriting (p. 347) refers to writing speeches, arranging speaking opportunities, and developing answers company representatives will likely be asked.

  1. Fundraising and Membership Drives (p. 347). A PR person may be responsible for soliciting money for a nonprofit organization or for a cause the company deems worthwhile, e.g., United Way.

Example: The Canadian Paraplegic Assoc. ad to drum up financial support (p. 347)

  1. Publications (p. 347). PR people prepare many of a company's communications materials, e.g., news releases and media kits, booklets, brochures, speeches, position papers, etc.

  2. Special-Events Management (p. 348) includes the sponsorship and management of special events is rapidly becoming a major field, so we devote the next major section of the chapter to it

D. Public Relations Tools (p. 348). The communication tools at the PR person's disposal vary:

A11-3 A Gateway news release (p. 348)

1. News Releases and Press Kits (p. 348). The most widely used PR tool is the news release (or press release), which is typewritten information issued on 8 1/2” x 11” paper to generate publicity or shed light on a subject of interest, such as a new product, promotion of an executive, an unusual contest, landing of a major contract, etc. A press kit (or media kit) supports the publicity gained at staged events such as press conferences or open houses. Includes a basic fact sheet about event, the sponsor, and the participants. May also include photos and press releases.

Checklist “How to Write A News Release” (p. 349)

2. Photos (p. 349) of events, products in use, new equipment, or newly promoted executives can lend credence or interest to a dull news story. Typed captions should describe the action and accurately identify the people shown.

3. Feature Articles (p. 349) are soft news written by PR person, someone at trade publication, or a third party; a case history, illustrated how-to, problem-solving scenario, state-of-the-art update, etc.

4. Printed Materials (p. 349) are the most popular tools used by public relations professionals. They may be brochures or pamphlets about the company or its products, letters to customers, inserts, or enclosures that accompany monthly statements, the annual report to stockholders, other reports, or house organs. A house organ is a publication about happenings and policies at the company.

5. Posters, Exhibits, and Bulletin Boards (p. 350). Posters can be used internally to stress safety, waste reduction, etc., or externally to impart product information, corporate philosophy, etc., to consumers. Companies use exhibits to describe the organization's history, present new products, show how products are made, or explain future plans. Internally, the public relations staff often uses bulletin boards to announce new equipment, meetings, promotions, etc.

6. Audiovisual Materials (p. 350) can take many forms, including slides, films, videocassettes, used for sales, training, or public relations. Considered a form of corporate advertising, nontheatrical or sponsored films are furnished free to theaters, organizations, and special groups, particularly schools and colleges. Many public relations departments provide video news releases (VNRs) — news or feature stories prepared by a company and offered free to TV stations.

IV. Sponsorships and Events (p. 350)

Story about Bennett Gibbs, owner of a small bicycle shop, who gets attention by offering his services to help sponsor charity bicycle race, which eventually resulted in $3 million in annual business.

A. The Growth of Sponsorship (p. 351)

1. Sponsorship embraces two disciplines: sales promotion and public relations.

2. Sponsorship is a cash or in-kind fee paid to a property (sports, entertainment, or nonprofit event or organization) in return for access to the exploitable commercial potential associated with that property.

3. In-kind is a fee paid via donation of goods and services.

4. Philanthropy is the support of a cause without any commercial incentive. Sponsorship is not the same as philanthropy.

5. Fast-growing industry. In the U. S. in 1990, sponsors spent less than $1 billion; in 2000, they spent over $8.7 billion. Worldwide, companies spend an estimated $22 billion.

6. Reasons for growth:

1. Escalating costs of traditional media.

2. Fragmentation of media audiences.

3. Growing diversity of leisure activities.

Ability to reach targeted groups of people economically.

7. Today, there is greater media coverage of sponsored events. For transnational marketers, there is growing interest in global events like World Cup soccer, the Olympics, and the Super Bowl.

A11-4 Corporate sponsorship IBM and the Olympic Kayaking-Slalom (p. 351)

B. Benefits of Sponsorship (p. 352)

1. Sponsorship is favored by the public.

2. Surveys show 74 percent of people believe, government should have little or no influence on which type of companies sponsor professional sports events.

3. Sponsorships get stakeholders involved.

4. Events are highly self-selective of their target audience.

5. Unlike advertising, sponsorships and events provide face-to-face access to current and potential clients.

6. Affiliation with an event reinforces product positioning.

7. Affiliation with an event can boost employee morale and company pride.

8. Sponsorship can fan loyalty into sales (i.e., 70 percent of stock-car racing fans report that they buy products they see promoted at the track.

9. Sponsorships can be very cost-efficient.

C. Drawbacks of Sponsorship (p. 353)

1. Costs can be too high for one sponsor to bear.

2. Cosponsored events, however, suffer from "clutter."

3. Evaluating the effectiveness of a sponsorship is tricky at best because it is difficult to separate the effects of sponsorship from the effects of other concurrent activities.

D. Types of Sponsorship Exhibit 11-2 Annual sponsorship spending in North America (p. 353) A11-5 (p.353)

1. Sports Marketing (p. 353)

a. Majority of sponsorship money (over 65 percent) is spent on events.

b. Buying the rights to serve your product at events gives the product more credibility than any television ad could.

c. In hotly contested markets, the giants in the field often fight over sponsorship rights.

d. Many sports events are local, costing less with a closer access to attendees and participants.

e. Without close coordination with other promotional activities, the money spent on sponsorships is wasted.

f. Ambush marketing is a promotional strategy non-sponsors use to capitalize on the popularity or prestige of an event or property (i.e., buying up all the billboard space around the athletic stadium to confuse the consumer as to who is the sponsor).

g. Sponsorship is now a worldwide phenomenon.

A11-6 Wienerschnitzel sponsors the Wiener Nationals (p. 354)

Exhibit 11-3 U.S. Companies on event sponsorship (p. 354) A11-7 (p.353)

2. Entertainment (p. 354)

a. Entertainment is the second largest area of sponsorship after sports.

b. Includes: concert tours, attractions, and theme parks.

c. Fan fest — festival area outside the stadium offering experiential branding opportunities, amusement rides, and sponsored displays.

3. Festivals, Fairs, and Annual Events (p. 354)

a. Sponsorships at fairs and expositions are growing (20 percent between 1993 and 1997). By 2000, sponsorship revenue reached $740 million.

b. Annual trade shows (business to business) attract large number of sponsors and exhibitors because of the economic benefits of being able to speak with customers and prospects at the same time.

4. Causes (p. 355)

a. Charity event and educational institution sponsorships are a tried-and-true PR activity that often fits with IMC strategy.

b. People appreciate the fact that business does not receive any directly tangible cash return.

5. Arts and Culture (p. 355)

a. Symphony orchestras, chamber music groups, art museums, and theater companies always need funding and are relatively untapped access to people with high-end income.

b. Government actions against tobacco and liquor companies may have a negative effect on this group. That has already been the case in Europe.

6. Venue Marketing (p. 356)

a. Venue marketing is a form of sponsorship that links a sponsor to a physical site like a stadium, arena, auditorium, or racetrack (i.e., Qualcomm Stadium, Coors Field, etc.).

b. These revenue streams are not shared with other team owners as are done with TV fees.

E. Methods of Sponsorship (p. 356)

1. Companies interested in sponsorship have two choices:

a. Buy into an existing event.

b. Create their own.

2. It is easier to buy into an existing event.

3. Most important is to get a good fit between sponsor and the event.

Checklist: “How to Select Events for Sponsorship” (p. 357)

F. Measuring Sponsorship Results (p. 357)

1. Event sponsorship has historically been hard to evaluate:

a. Experts say only three ways to evaluate the hard-to-determine results of a sponsorship:

1) Pre- and post-sponsorship surveys.

2) Measure spending equivalencies between free media exposure and comparable advertising.

3) Measure changes in sales revenues with a tracking device such as coupons.

b. None of these covers all the reasons for sponsoring. For example, how do you measure the effect on employee morale? On the other hand, what if the sponsorship is aimed at rewarding current customers?

2. To measure the value of events, the International Events Group (IEG) suggests:

a. Have clear goals and narrowly defined objectives.

b. Set a measurable goal.

c. Measure against a benchmark.

d. Do not change other marketing variables during the sponsorships.

e. Incorporate an evaluation program into the overall sponsorship and marketing program.

f. Establish a budget for measuring at the outset.

  1. Corporate Advertising (p. 358)

PR people use corporate advertising when they want to control the message. In an IMC program, corporate advertising can set the tone for all of a company’s public communications. Corporate advertising covers the broad area of nonprofit advertising, including public relations advertising, institutional advertising, corporate identity advertising, and recruitment advertising.

A. Public Relations Advertising (p. 358) refers to directing a controlled public relations message to one of its important publics. When companies sponsor art events, programs on public television, or charitable activities, they frequently place public relations ads in other media to promote the programs and their sponsorship, enhance their community citizenship, and create public goodwill.

B. Corporate/Institutional Advertising (p. 359) has come to denote the type of nonproduct advertising used to enhance a company's image and increase awareness. The traditional term is institutional advertising.

1. Institutional or corporate advertising campaigns serve a variety of purposes:

a. Report the company's accomplishments.

b. Position the company competitively in the market.

c. Reflect a change in corporate personality.

d. Shore up stock prices.

e. Improve employee morale.

f. Avoid a communications problem with agents, dealers, or customers.

Ad Lab 11-B “David Ogilvy Talks about Corporate Advertising” (p. 364)

2. Historically, companies and professional ad people have questioned the effectiveness of corporate advertising — “it looks nice, but it doesn’t make the cash register ring.” Evidence indicates corporate advertising yields better overall impression than those companies using only product advertising.

3. A company uses advocacy advertising to communicate its views on issues that affect its business, to protect its position in the marketplace, to promote its philosophy or make a political or social statement. Such ads are frequently referred to as advertorials since they are editorials paid for by an advertiser.

4. Corporate advertising can also build a foundation for future sales, traditionally the realm of product advertising. Many advertisers use umbrella campaigns, called market prep corporate advertising to simultaneously communicate messages about the products and the company.

Portfolio of Corporate Advertising (pp. 360-363)

C. Corporate Identity Advertising (pp. 359, 364) is used to communicate changes in a company's name, logo, trademark, or corporate signature. Recent examples include Unisys, Navistar, First Interstate Bankcorp, and Sara Lee Corporation.

  1. Recruitment Advertising (p. 364) is used to attract new employees. Most recruitment advertising appears in the classified sections of daily newspapers and is placed by human resources departments.

AD LAB 11-A „ ‘Green’ Advertising” (p. 346)

1. Imagine you are marketing a new product that sells for $1.25 and is environmentally safe. Would you spend thousands of dollars for a green seal for your impulse product if consumers were ambivalent toward such environmentally safe goods as observed in the first wave? Explain.

Answer guidelines:

A product sales price has less to do with the issue of environmental certification than the company’s reputation.

a. If a consumable food product for example, is involved, consumers may find certification reassuring, a proof that the company cares for their health and well-being.

b. If the company has an extensive product line or a family of products, certification lends credibility to all products.

c. From a competitive point of view, if the product’s competition did not have environmental certification, then certification would be a winning strategy.

If the cost of certification were a deciding factor (likely for a product selling for only $1.25), then a number of factors would have to be weighed:

a. At the retail price of $1.25 per unit, product distribution would have to be wide to cover costs.

b. Assuming that 40% ($ .50) of that cost goes to the retail store. Manufacturing costs would likely have to be less than $ .40, leaving $ .35 for administration, advertising, and other overhead costs — including profit. Thus, using this ballpark estimate, a product would typically have to pay for the cost from the remaining $ .35 per unit of revenue. This would take many units and a few years.

2. Imagine that you just made manufacturing changes to your product so that it is easily recyclable. Would you advertise these changes, knowing the restrictions on the term “recycle”?

If the product were not recyclable according to FTC restrictions, then the company would be punished for advertising that it was recyclable.

AD LAB 11 B “David Ogilvy Talks about

Corporate Advertising” (p. 364)

Find and discuss a corporate ad that demonstrates what Ogilvy refers to as the humbug in corporate advertising, the pomposity, vague generalities, and fatuous platitudes.

Answer guidelines:

The key issue is the style of thinking and the mood of the reader can easily determine the interpretation of corporate ads. Imagine a corporate ad warmly portraying its employees as being dedicated to environmental safety. On a day when all seems to be going right, a consumer may see this ad and agree with it. However, the next day, while waiting half the morning to meet with a doctor, the consumer may see the same ad and comment that the ad is exploiting the company’s employees.

Student reactions could go either way:

a. Value-based thinkers, for example, can be expected to favor ads with elegant copy (uncluttered by details) and metaphoric portrayals using romantic images.

b. In contrast, fact-based thinkers are likely to distrust undocumented statements, passing off romantic words and pictures as fluff or puffery. (Styles of thinking are described in Chapter 11, page 380.)

ETHICAL ISSUE “When is Advertising Not Really

Advertising?” (pp. 342, 343)

1. Should corporations use persuasive advertising techniques to influence key decision makers? Explain.

Yes, if legally accomplished, there are many good reasons to do so:

a. The advocate’s angle on the situation can help illuminate public discussion.

b. To advocate a position is human, and legal. In addition, simply put, organizations with a mission occasionally have the need to present their slant on the story to key decision-makers. For the vast majority of these organizations, their mission is a legal one. Even if they fill the message with hyperbole, puffery or stirring imagery to get attention, their message, most likely, has some merit.

c. Advertising is sometimes associated with exhibitionism — a public spotlight few would want to actually use during an attempt to conceptually “seduce” decision-makers. Thus, advocacy advertising is more likely to keep advocates honest.

d. Because of the spotlight effect, many would prefer not to use advertising, but do so because it is better than the alternatives:

• some alternatives (such as lobbying) may be too costly.

• some alternatives are less reliable (a persuasive message in a press release usually is heavily edited or removed by the media).

e. A key value of using persuasive advertising: it allows the advocate to present the message just like the advertiser desires.

f. Some fear that persuasive messages can “brainwash” individuals. Because advocacy advertising in practiced in public forums, it is not allowed to deceive or mislead. However, key decision-makers are knowledgeable individuals, able to spot pandering, propaganda and other questionable techniques of persuasion.

g. There is nothing inherently unethical or immoral about promoting ideas or programs as one would a product.

As a caution, however, the use of advertorials can easily cross the line when a company uses them to mislead consumers and promulgate its own brand of the truth.

2. How can you determine if an advocacy ad is deceptive? If deception is established, what should the penalty be?

Given the considerable gray areas that exist, there many ways advertorials can be deceptive in both intent and content. Falsification of facts and presenting misleading information is certainly deceptive, whether done overtly or by omission. In addition, advertorials can even deceive by appearance, being designed to look like actual editorial text of the publication.

Penalties for misleading (deceptive) advertising have been levied for years. Today, violators are usually fined and required to run corrective ads.

REview Questions

1. How does public relations differ from advertising? (p. 340-341)

The primary role of public relations is to manage a company’s reputation and help build public consent for its enterprises. PR is considered a more personal process of business communication, relying on the goodwill of the media, rather than payment to publish information provided by a business in a timely manner with the least amount of editing as possible. Because a company’s message is subject to editing by the media, public relations is perceived as being very credible.

Advertising is viewed as a nonpersonal means of communication, involving payment to the media to publish its message as designed in a specific location, according to a schedule. Because of this approach, advertising is usually ideal for creating awareness for products and services.

While PR activities may offer greater credibility, advertising offers greater awareness and control. Since advertising is carefully placed to gain particular reach and frequency objectives, PR is less precise. (Do not forget the excellent portfolio review on pages 360-363).

2. How is the perspective of advertising practitioners different from that of PR professionals? How is marketing public relations used? (p. 341)

Advertising professionals tend to be sales or marketing oriented. They are inclined to view PR as publicity that should be used as a good news vehicle for the promotion of the company and its products. PR professionals see marketing and advertising as sales tools for the public relations umbrella process. From their perspective, publicity should have a news orientation rather than a sales orientation.

When PR activities become tools for marketing (become sales- and product-focused rather than relationship-focused), the term marketing public relations (MPR) is often used. Marketing public relations activities can raise awareness, inform and educate, improve understanding, build trust, make friends, give people reasons or permission to buy, and create a climate of consumer acceptance.

3. What is the role of public relations in relationship marketing and integrated marketing communications? (p. 343)

The concept of “relationship” is the basis for both public relations and the strategy of relationship marketing. In addition, since integrated marketed communications are used to manage relationship marketing, PR is inherently a well-suited support tool for both of these processes.

4. What are some activities used in reputation management? (p. 344)

Reputation management is the name for the long-term strategy of managing the standing of the firm with various publics. PR practitioners employ a number of strategies and tactics to help them manage their firm's, or client's reputation, including publicity and press agency, crisis communications management, and community involvement.

5. Why is it important to establish a crisis-management plan? What types of companies are most likely to need one? (p. 344-345)

When a crises strikes, people often become disoriented. Thus, most companies or businesses should be prepared in advance with a guide for taking action in times of crises. In PR, the crises plan is designed to minimize the negative effects on the attitudes of publics. Any type of company can benefit from such a plan, but among those most in need are manufacturers of potentially hazardous products, companies where masses of people are involved, and those in highly sensitive industries or organizations. Examples include airlines, chemical and oil companies, utilities, police and fire departments, military organizations, and health industry businesses.

6. What types of sponsorship activities are available to marketers today? (p. 350-353)

While there are many events available for sponsorship, USA Today groups most of them into five categories: sports; entertainment; festivals, fairs, and annual events; causes; and the arts.

7. Which sponsorships are likely to offer the best return on investment, and how can that be measured? (p. 354-355)

Sponsorships that are most likely to offer the best return on investment are those that closely match the mass media audience and event participants with the demographics of the target consumer.

Experts suggest that there are three ways to evaluate results of event sponsorship.

a. Measure changes in awareness or image through pre- and post-sponsorship surveys.

b. Measure spending equivalencies between free media exposure and comparable advertising.

  1. Measure changes in sales revenue with a tracking device such as coupons.

8. What are the various types of corporate advertising? Describe them. (p. 358-363).

Corporate advertising covers the broad area of nonproduct advertising, including public relations advertising, institutional advertising, corporate identity advertising, and recruitment advertising.

a. Public relations advertising: used to direct a controlled public relations message to one of its important publics. When companies sponsor art events, programs on public television, or charitable activities, they frequently place public relations ads in other media to promote the programs and their sponsorship, enhance their community citizenship, and create public goodwill.

b. Corporate/Institutional advertising: denotes the type of nonproduct advertising used to enhance a company's image and increase awareness. Institutional or corporate advertising campaigns serve a variety of purposes:

• Report the company's accomplishments.

• Position the company competitively in the market.

• Reflect a change in corporate personality.

• Shore up stock prices.

• Improve employee morale.

• Avoid a communications problem with agents, dealers, or customers.

  1. Corporate Identity advertising: used to communicate changes in a company's name, logo, trademark, or corporate signature.

  2. Recruitment advertising: used to attract new employees. Most recruitment advertising appears in the classified sections of daily newspapers and is placed by human resources departments.

9. What is the purpose of corporate identity advertising? (p. 364)

Companies take pride in their logos and corporate signatures. The graphic designs that identify corporate names and products are valuable assets, and companies take great pains to protect their individuality and ownership. Corporate identity advertising is necessary when a company changes its name, logos, trademark, or corporate signatures, or when it merges with another company.

10. What is the purpose of recruitment advertising? Why is it under the domain of corporate advertising and public relations? (p. 364)

The primary objective of corporate advertising is to attract quality employees, a task accomplished by recruitment advertising. Recruitment advertising may be considered a type of public relations advertising in that it is used to manage one aspect of the company's relationship with one of its publics: prospective employees.

Exploring the Internet

The Internet exercises for Chapter 11 address the following areas covered in the chapter: public relations firms and corporate advertising (Exercise 1), and PR organizations (Exercise 2).

1. Public Relations Firms and Corporate Advertising

Chapter 10 discussed the difference between traditional advertising agencies and direct marketing or sales promotion firms. Public relations firms, too, differ substantially from ad agencies. In addition, in some cases, they are stealing corporate advertising duties away from traditional advertising shops. It is important to explore the function of public relations. Visit the websites for the following PR companies, and answer the questions that follow.

  • Ballard Communications (

  • Burson-Marsteller (

  • Creamer Dickson Basford (

  • Hill & Knowlton (

  • Ketchum Public Relations (

  • Minkus & Dunne Communications (

  • Rowan & Blewitt (

  • S&S Public Relations, Inc. (

  • Stanton Communication (

  • Stoorza, Ziegaus & Metzger (

  • The Rowland Company (

a. Who is the intended audience of the site?

b. What are the scope and size of the firm’s business?

c. What is the focus of the firm’s work (i.e., consumer, business-to-business, not-for-profit)?

d. What is your overall impression of the firm and its work? Why?

Sample Answer:

Ketchum Public Relations

a. The audience for the site consists of current/potential clients, current/potential employees, current/potential investors, and other advertising/marketing professionals and firms.

b. Ketchum is a worldwide network, with offices in North America, Europe, and Asia/Pacific.

c. The firm’s work is largely centered on Public Affairs and Press Agentry—although it has business-to-business, consumer, and ethnic marketing units—and largely focuses on the following core areas:

  • Strategy & Technology

  • Corporate Social Responsibility

  • Crisis Management

  • Business-to-Business Communication

  • Employee Communication

  • Public Affairs

  • Government Relations

  • Investor Relations

  • Labor Relations

  • National Media Relations

  • Hispanic Marketing

  • African-American Consumer Marketing

  • Communications Training

  • Research & Measurement

d. Ketchum Public Relations is very impressive with its host of à la carte services and global capabilities. The firm is appealing to those who are interested in working for a large PR agency. The firm is attractive to potential large corporate clients in need of full-service PR around the globe. Finally, advertising agencies who do not offer public relations functions could very well look to Ketchum to assist them in meeting their client’s IMC objectives.

2. PR Organizations

As you learned in Chapter 11 of Contemporary Advertising, perhaps no other marketing communications function plays a more integrated role with advertising than public relations. Now take a moment to explore the world of PR a bit further by visiting the websites for the following public relations-related organizations and answer the following questions for each site.

  • American Association for Public Opinion Research (AAPOR) (

  • PR Newswire (

  • Public Relations Society of America (PRSA) (

  • Public Relations Student Society of America (PRSSA) (

a. What is the organization’s purpose?

b. Who makes up the organization’s membership? Its constituency?

c. What benefit does the organization provide individual members/subscribers? The overall advertising and PR communities?

d. How important is this organization to the public relations community? Why?

Sample Answer:
Public Relations Society of America

a. The Society’s mission is to advance the practice of public relations by:

  • uniting professionals in the industry

  • encouraging the continuing education of practitioners

  • playing an active role in all matters affecting the practice of public relations

  • formulating the objectives and interpreting the functions of public relations (and those who practice it) to the public

  • strengthening the relationships of public relations professionals (with employers and clients, with government at all levels, with educators, with media, and with the public)

  • encouraging high standards of conduct and public service

b. The organization’s membership consists of individual practitioners and educators in the field of public relations. The organization’s activities are meant to serve these members and the overall public relations industry, at large.

c. PRSA membership provides individual members with a wealth of resources and research data, publications, conferences, APR accreditation, and a host of networking and professional development opportunities. The organization also enhances the overall marketing communications community as it strives to enhance the practice of public relations, focusing on professional development and the widespread implementation of effective PR activities.

d. This is probably the most important organization in the public relations community because of its long-standing heritage with practitioners, its commitment to the industry, and its constant drive to improve and expand public relations activities in corporate and private America.

Important Terms

Advertorials, 359

advocacy advertising, 359

ambush marketing, 354

audiovisual materials, 350

bulletin board, 350

community involvement, 345

corporate advertising, 358

corporate identity advertising, 364

crisis management, 344

entertainment, 354

exhibit, 350

feature article, 349

house organ, 350

in kind, 351

institutional advertising, 359

market prep corporate advertising, 359

marketing public relations (MPR), 342

news (press) release, 348

opinion sampling, 343

philanthropy, 351

poster, 350

press agentry, 344

press (media) kit, 348

public affairs, 346

public relations (PR), 339

public relations advertising, 358

publicity, 344

publics, 340

recruitment advertising, 364

reputation management, 344

speechwriting, 347

sponsorship, 351

venue marketing, 356

video news release (VNR), 350


Activities & EXERCISES

Have the students write a news release about an upcoming campus activity. The students should use the Checklist: Writing News Releases on p. 349. The students then submit the news release to the campus newspaper or a local paper and then monitor the paper over the next few days to see if the release is printed.

Debatable Issue

Should Broadcasters be Required to Accept Advocacy Advertising?

Commercials dealing with controversial public issues such as gun control or abortion are called advertorials or advocacy advertising.

The question whether stations should be required to air such advertising has not been the key focus of this four-decade debate, but the related issues of editorials and a station’s responsibility to the community have. The key difference is that people pay to air advocacy advertising, while editorial commentary is a community service stations must provide at no cost. In addition, because advocacy advertising is so similar to commentary, the rules governing commentary are regularly applied to advocacy advertising, as well.

At one time, the law forced stations to accept advocacy commentary, but that government ruling had an expiration date that was eventually allowed to lapse. However, law continues to dictate that stations must provide “equal time” to opponents. A countering influence was a 1973 Supreme Court ruling that radio and television stations have an absolute right to refuse to sell time for advertising dealing with political campaigns or controversial public issues. Thus, today, stations sit on a fence when it comes to advocacy advertising — they will review it for content and propriety in order to determine if it can be aired.

If the broadcast media were required to accept advocacy advertising, some believe individuals, groups, and companies could purchase airtime to promote self-serving, even propagandistic views. Yet, most newspapers and magazines today accept advocacy advertising. They, like TV stations, are also free to reject such advertising when it does not meet their standards. Would newspapers, as well, like being forced to print advocacy advertising regardless of content?


Broadcasters should be required to air paid-for advocacy advertising because...

Viewers and listeners have a right to a balanced presentation of views on public issues. Since reporting is biased, advocacy advertising should be allowed so that audiences can receive information representing a broader spectrum of viewpoints.

Advocacy advertising would encourage constructive debate of controversial issues. This would make for a better-informed public.

Prohibiting broadcasters to air advocacy advertising is a denial of the freedoms of speech and of the press as guaranteed by the First Amendment.

It is the responsibility of the broadcast and other media to assure that the public is exposed to all sides of an issue. Since present broadcast policies do not enable this, advocacy advertising is needed to correct this imbalance.


Broadcasters should not be required to air advocacy advertising because...

Reports and commentaries on controversial public issues should be presented in a journalistic format by broadcasters. This is more apt to ensure accuracy, objectivity, and fairness in reporting, and to substantiate all sources.

Advocacy advertising would encourage biased statements. This could lead to public misinformation and widespread conflict on vital issues.

Advocacy advertising would be dominated by those advertisers with the most money. Their dominance of the airwaves would destroy balanced information reporting to the public.

The FCC would apply the "fairness" doctrine to advocacy advertising, granting free, equal-time to those who wish to express views opposing those of advocacy advertisers. This practice would cause broadcasters to suffer undue financial loses.


1. Name a controversial issue you feel strongly about. Which of the arguments do you feel best support whether advocacy advertising should or should not be aired about the controversial issue you selected?

  1. What other points, pro and con, can you add to each side?

Images from the Text

Images are available as color acetates through your local McGraw-Hill/Irwin sales representative.

A11-1 Crain’s ad (p. 340)

A11-2 Exhibit 11-1 Top 10 U.S. public relations companies (p.341)

A11-3 Gateway news release (p. 348)

A11-4 Corporate sponsorship IBM and the Olympic Kayaking-Slalom (p. 351)

A11-5 Exhibit 11-2 Annual sponsorship spending in North America (p.353)

A11-6 Wiener Nationals ad (p.354)

A11-7 Exhibit 11.3 U.S. companies’ spending on event sponsorship (p.354)

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