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September 2008
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Course In Advanced Public Relations TheoryHomework AssignmentsWeek One: Thought Experiments
I obviously have some very bright, experienced PR veterans in this virtual class. And I am impressed with the thought theyâve given to the topic of EMTMR ö the Efficient Markets Theory of Media Relations.
Below are some of the best homework essays I received this week. I hope others of you will share your thoughts with us too. The more participants, the more we all benefit! Also, as youâll see, I ask these ãstudentsä to further clarify their own thinking.
Dean Rotbart Denver, Colorado
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In The Long Run, Weâre All Dead
Dean:
Iâve been a subscriber and follower of your writing for many years. I attended one of your ãNewsroom Confidentialä seminars in the late 80âs or early 90âs and read the old TJFR hardcopy newsletter religiously.
In the long run, EMTMR holds true. But as an economics professor of mine regularly reminded me in college, ãin the long run weâre all dead.ä There are two ways that companies can continue to get media attention in the short term:
1. There is an information gap that can be filled by smart companies bringing truly newsworthy stories to reporters. Facing a daily time crunch and information overload, even the hardest working journalists will miss newsworthy nuggets. Worse, the financial media is often myopic, focusing on BIG news in BIG cities. An occasional reminder of valid news stories that may not be right on their doorstep helps journalists broaden their coverage and find ãundiscoveredä gems. Iâll use the example of Milwaukee-based Kohlâs Department store (not one of my clients). Anyone in the Midwest can tell you that Kohlâs was building something truly unique as they changed the retailing landscape in every town they aggressively expanded to. Yet the New York financial media took no notice until Kohlâs opened a store in the NY metro area. That same week, the stock popped significantly!
2. If you believe in Schumpeterâs ãcreative destruction,ä the theory that new technologies drive out old ways of doing business, then successful companies must constantly recreate themselves. What is new today will be old a year from now. Surviving companies are always finding new ways to serve their customers. Beat reporters are always interested in significant and newsworthy industry trends and new ways of doing business.
The PR practitionerâs role? Fill the short-term inefficiency of the news process and help companies identify the truly newsworthy changes that must happen in order for a company to survive.
Again, thank you for your thought-provoking coverage.
Regards,
Jody Lowe Lowe Communications LLC Milwaukee, Wisconsin
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The ÎScienceâ of Public Relations
Dear Dean:
Loved your column on the efficient markets theory of media relations. I spent 20 years in journalism before moving to PR, and there are many, many journalists who subscribe to this theory, though many of them donât articulate as well as you have here. And itâs not just financial journalists Iâm talking about ÷ journalists who cover politics or health or other subjects often subscribe to a similar theory, albeit without the tangible financial measures that business journalism offers.
Two thoughts in reaction to your column:
1. First, if the EMTMR theory were truly accurate, it would apply to media coverage as well as media relations. In other words, news coverage of companies in the financial realm should not matter to overall company performance. But thatâs a fallacy, too. Financial journalism is a filter in and of itself, regardless of PR, and that filter skews whether a story is newsworthy. For example, while the news staff at the Wall Street Journal is erudite and sophisticated, if thereâs not enough advertising for four sections of 24 pages, then the paper is smaller that day than it otherwise would have been and some stories never see the light of day. To filter whatâs worthy of space in a three-section WSJ, journalists use a variety of subjective measures to weed out stories that ÷ dependent solely on the size of the paper ÷ might otherwise have seen print on any other day. I could go on and on with examples, but you get the idea. Media coverage doesnât adhere to efficient market behavior any more than PR does. And if it truly did, that would mean journalism is meaningless ÷ a bland, neutral, passive input into company performance. Iâve met few journalists who think that their work doesnât matter, so how can they reconcile this theory with their own work?
2. OK, letâs talk for a moment about media relations. I have my own theory, that public relations is more like a science, specifically physics, than it is an art. My theory is based on hard-earned experience that can be summarized this way: All other measures being equal, the company with a better image and reputation (which comes from effective application of PR, over the long term) is held in greater esteem and performs better over the long term than the company that ignores its image. Iâm writing a book on this topic and I turned the foreword into a column I posted on my PR firmâs web site at this address: http://www.wordwritepr.com/2002_04_28_pastcolumn.shtml
So thereâs my two cents (or two bulletsä) worth!
Thanks again for a thought-provoking column. I look forward to your follow-up. -- Paul Furiga President WordWrite Communications LLC Wexford, PA 15090
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Great PR Boils Down To Great Salesmanship
Dean:
Great article!
My response is this. If the practice of PR were outlawed, two things would happen within 18 - 21 days (the time it takes to create a habit), one, not a lot initially, companies that were known to journalists would continue to receive coverage. Journalists would go to their sources for stories and research the known. A few unknowns might slip through here and there. After very short period of time, the only companies that would receive any real overage would be those within easy reach of the journalists and those who are large, well-branded public companies because they'd be easiest (and most willing) to reach and get information from. When something outside major corporations was needed, recommendations from looking out their window, personal experience or a short walk around the block would be the source of that information. Those companies who could most benefit from positive PR would likely not receive it as they are probably already doing a poor job at the rest of their marketing efforts and therefore would not be the beneficiary of "common knowledge or brand awareness" created in the journalist ahead of time.
Political coverage would change very little except that there would be a lot less Spin on particular issues and reporters could do a much better job of getting to the real core of the issue as the politician would not be as well prepped on the issue prepared by a PR person, with well thought out answers to about any possible question or scenario. The news would become much less sterile.
Fundamentally recreating the way PR is practiced is a very necessary idea. Your point that most PR companies say they can do a better job than their competition is a fatally flawed idea. What it ultimately comes down to is that the best pitchman (read salesperson) will win placement for their client. Throw in a little timing and you have the makings of a horse race that changes with employees, if the process of salesmanship isn't taught to new people coming on board the company is setting itself up for future failure. When their racehorse leaves, so does their ability to outperform their competition. The other real problem is that people don't accurately measure the impact of PR in dollars. That is how Bold Approach has differentiated itself from the competition. As a pay for performance company, either the strategies that we employ work and the client gets more coverage that increases awareness and profitability or they don't pay us. Not a lot of NYC PR firms ready to take on that challenge.
Can't wait to see your next newsletter.
Best regards,
Dave Lakhani President
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Live Colonoscopies in Rockefeller Plaza
Dean,
I'm always too good about doing homework.
Note, I'm new this semester; I haven't read previous class materials.
As for EMTMR, it doesn't account for who exactly gets covered. Most companies that are covered do deserve it, but there are many more deserving companies that never get covered. Also, news outlets tend to rely (to varying degrees, of course) on PR professionals for at least a few (if not some, or most) of their stories, and if PR was banned for a year, I think newspapers have fewer articles, and Katie Couric would have to endure more frequent live colonoscopies to fill up space ÷ especially on the show's three-hour format... they could have big colon months... see if Al Roker or Willard Scott has the most polyps. Better yet, the Today Show could combine the colonoscopy segment with the summer live music showcase and have Katie undergo a live colonoscopy in the middle of Rockefeller plaza. Ratings'll go through the roof!
I think it's time to start my weekend now.
Best,
David Berkowitz
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A Path of Least Resistance for News
Hi, Dean
Regarding the efficient markets theory of media relations, a good PR firm would have suggested you change that to "Press Relations Efficient Market Theory" so that you could at least get a pronounceable acronym out of it!
Seriously, I tell my clients that PR can't put Mr. Boring, their CEO, on the cover of Fortune, OR keep Captain Bligh, their Chairman, off it. I think PR can only lengthen or shorten your shadow, making you appear 4 pm large at 2 pm, or 10 am small at 8 am, depending on whether you're magnifying positives or minimizing negatives. But I do think PR can do that.
Reporters are overworked and underpaid, so a good PR person who makes their work easier helps create a path of least resistance along which news coverage may flow. They can lead reporters to interesting stories that the reporters may be unaware of. They can bring out the other side of the story to help break up the pack mentality of negative coverage that sometimes occurs when an organization is unfairly attacked.
So that's my cut on this. The markets may be efficient, but not perfectly so and not in real time. I don't have the book from your 30 Under 30 event here with me (I'm working out of my home office today) but one of your honorees (who was also quoted on the page where that "Don't Quote Me" game was, had a great quote from Keynes. Something along the lines of "You can run out of liquidity before I run out of patience" or some such. Not as good as "In the long run, we shall be dead" but in that vein. If a PR agency or corporate communications department makes a story THAT WOULD HAVE HAPPENED ANYWAY happen a year sooner, that may make a huge difference in sales, profits, jobs, even the continued existence of a company.
Regards, David
David Moyer Moyer, Sherwood Associates, Inc. New York, NY
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Posted August 27, 2003 |
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