Saturday, January 28, 2006

PR v Marketing - Ballance Sheet v P&L

Marketing v PR is not just a semantic discussion it is about different views of both an organisation and the public. It is about management strategy.

The difference between the two approaches is fundamental to the strategic direction of organisations. For those managers who seek to grow a company, there is a need to invest in Public Relations and for those who have to offer shareholder return they must spend on marketing.

Marketing, in its highest form of relationship marketing, is predicated on an organisation reacting with its stakeholders, those social groups that may have a 'stake' in the organisation.

It looks from the organisation outward.

Public Relations in its relationship management role is predicated on the organisations' role in society.

It seeks a place in society.

Marketing has to communicate with social groups to make stakeholders take notice.

Public relations has to engage in conversation in those cultural spaces and through the relevant channels for communication that are used by society.

Marketing has to explicate explicit tokens (brands, products, organisation).

Public Relations seeks commonality of values and mutual value creation in cultures. It creates 'a place in society for the organisation.'

Marketing has a high end - up front cost, short term wins and is good for the bottom line.

Public Relations required long term investment, has long term effects and is good for the balance sheet.

Public Relations drives Marketing because it creates value and marketing has to respond with reasonable return on share (stock) value.

Marketing puts stress on cash flow because of its up front cost and the cost of meeting consumer expectations. Public Relations offers enhanced asset value to mitigate the cost of Marketing.

Marketing provides the process by which revenues can be derived from assets.

Public Relations provides the process by which values are created from assets.

Public Relations creates balance sheet value for Marketing investment.

Return on Investment in Public Relations will appear on the balance sheet. ROI from Marketing will appear as revenue.

The difference between the two approaches is the difference in perspectives. Marketing on the one hand is looking out from a perspective of the dominant coalition while Public Relations facilitates an organisation joining in and contributing to cultures for mutual benefit.

Picture: Two sided