What PR Boom? Why The Recession Hasn’t Helped Public Relations

Like  my peers, I was interested to read the latest article about our industry in The Economist. Titled “Good News,” the piece posits that PR has profited during the recession, since so many companies have suffered business and reputation declines. It cites the latest Veronis Suhler Stevenson data indicating a 3% growth for the PR business in 2009, although the gains have come amid layoffs and declining budgets for many firms.

Good news for PR? I don’t think so. The recession may have underscored the need for a long-term, strategic approach to reputation management. But, I seriously doubt that it’s been good for PR firms. I don’t know enough about Veronis’s methodology to challenge its numbers, but nearly everyone I know in the business has experienced layoffs, compensation freezes, or furloughed salaries in the past year.
My straw poll is more in line with the 2009 survey by StevensGouldPincus that’s also mentioned in the piece. It reports a revenue slide for nearly 64% of participating PR firms. (Happily, my own firm exceeded its revenue targets for 2009, but as a newly branded spinoff of a larger company, we’re an anomaly.)

In fact, the very example cited as evidence of the industry’s strength is ironic. It’s the Domino’s Pizza YouTube incident, by now well-known both in and outside of the industry and held up by many (including yours truly) as a fine example of crisis response and use of social media. Yet Domino’s didn’t use a PR firm to manage fallout from the rogue employee video that nearly took down its brand. Its response was led by the internal communications group and ad agency partner Crispin Porter Bogusky.

To me, that’s a reminder that, in many cases, PR firms still aren’t the chief social media gatekeepers and strategists, although we’re well-suited to the task.

But, let’s not quibble about one example. What really bothers me about The Economist article is the implication about the respect factor. It quotes a large-agency exec who touts PR as “the organising principle” of business decisions. Yet, it presents public relations as a band-aid for corporate misbehavior or poor or sloppy business practices.

I’ve no doubt that the reputation battering experienced by many companies has made PR more top-of-mind. But, in cases where the wounds were self-inflicted,  I can’t help but wonder where the PR counsel was when things went wrong in the first place. Was corporate communications a dissenting voice when Goldman Sachs advised clients to buy mortgage-backed securities, while lightening up on them for its own investment purposes? Was a reputation officer at the table when the Big Three auto companies planned their remarks and (private jet) trips to D.C. for the government bailout hearings…let alone along the road that led them there?

I don’t know, but I doubt it. The “quick-fix” characterization of PR makes me cringe, because it’s anything but a band-aid. It brings to mind Bill Sledzik’s 2007 post about our professional responsibility to say no when the party line goes against corporate or societal values. (If you haven’t read it, please stop and do so here.)

PR isn’t a magic bullet for an economic crisis. But, I’ll think we’ve come into our own when organizations of all stripes make PR a fundamental part of business planning, and when communicators are free to express an independent or contrarian view at the corporate table where we so badly crave a seat. Until then, it’s nice to have the reputation lift for our industry, but it feels a little like…well, just another PR piece.

Domino’s Serves Up A New PR Recipe

Call it a mid-life crisis. On the eve of its 50th birthday, Domino’s is throwing its pizza recipe – and its business – up in the air. The company recently announced it has changed “everything” about its products, from crust to sauce. To top things off, it’s invited influential bloggers, some of whom have criticized its product – to comment on the changes.

Brand gurus have pointed out the risks involved in changing its core product – as embodied by examples like the new Coke launch. It’s true that regular customers are probably happily accustomed to their pizzas. And, then, there’s its vulnerability. Think of the food bloggers ready to heap on the snark, and pizza snobs with knives out…and not in a good way.

But, let’s face it. People order Domino’s for convenience, not for authenticity or even flavor. In fact, one category study ranks Domino’s number one among major pizza chains, but it comes in dead last for taste – tied with Chuck E Cheese. Pizza snobs aren’t likely to be customers anyway; my bet is that Domino’s wants into eat into the market share of its main competitors, and to win back lapsed customers who might be bored with its offering.

Most importantly, a proactive social media push generates the type of “free” coverage that advertising can’t accomplish. Customers will either like the new recipe, or they won’t. But it sure does generate buzz and make the marketing job easier.

What I’m savoring about the Domino’s strategy is its willingness to reach out to social media influencers – especially those who might not be fans – to spread the word, just months after the YouTube video crisis created by rogue employees.

It’s another indication that social media is an essential ingredient to a product launch today. And, for Domino’s, it’s not only in line with the current trend to use Web influencers to boost branding efforts, but it’s a bold move that shows confidence in its own decision.

It’s too early to tell if the Domino’s gamble to get a larger slice of the industry pie will pay off. The blogger reviews are starting to come in, though, and they’re okay. For blog reviews, that is. My philosophy there is a little like one of the comments I saw.  “Pizza is like sex. Even when it’s bad, it’s pretty good.”

When Bad Things Happen To Good Brands


 Too often, a company’s own failings can put its brand at risk.  But, as the world knows, sometimes — well, stuff just happens.

Earlier this week, Domino’s Pizza found itself facing a brand reputation crisis when two North Carolina store employees videotaped themselves doing disgusting things to food and placed the video on YouTube

Although the employees later claimed the whole episode was a prank, within hours, the video racked up over a million views, with many customers vowing never to eat its pizza again.

Domino’s response to the incident as it escalated wasn’t as swift as it could have been…primarily because no corporation can act as fast as necessary to contain a wildfire social media crisis. Yet, the response did come, and it was largely out of the reputation management playbook. Like another fast-food brand that was the victim of a malicious act (remember the severed finger incident that dogged Wendy’s several years ago?), Dominos went on the offensive, fighting back as if its business depended on it…which it did.

The situation highlights the importance of a few principles of crisis management.

Seize control. After some initial hesitation, Domino’s acted swiftly to respond directly to its stakeholders and the public at large.

Use the medium. Besides reaching out to traditional media, Domino’s produced a video to communicate its response in an unfiltered way, calling for the same social media  networks that fanned the flames of the crisis to help get its story out.

Apologize, then correct. Even if a victim of the actions of others, the company must accept responsibility and immediately demonstrate that it’s taking the necessary steps to correct the situation.  In this case, that included vigorous prosecution of the offenders and a review of hiring practices, among others. Many companies worry about overreacting (as I believe JetBlue did after its Valentine’s Day fiasco of 2007), but nothing is worse than appearing insensitive to the well-being of customers.

Feel it.  Many companies avoid this, but sincere emotion inspires trust. In its video Domino’s president apologized and discussed the incident in a heartfelt and personal way.  Its spokesperson’s comments expressed disgust and anger on behalf of the company’s employees and franchised business owners, and pointing out that they were the true victims of the incident.

Because of their structure, franchised and retail companies are more prone to such crisis situations than others, but no company or brand is immune.  And in the age of social media, the stakes are higher than ever.