Namita Bhatnagar

Asper School of Business

A Strategic Marketing Perspective of PR Activities Integration, Compatibility, and Caveats Associated

with Constructing Corporate Communications

Overview

• What is marketing?

• What is the marketing process?

• Where does PR reside within this framework?

• Typical PR functions highlighted by marketers and opportunities for product related communications.

What is Marketing?

Market Research “Listen to and understand your customers”

Marketing Communications “Let your customers know”

Marketing is Customer Centricity

• Selling : Marketing :: Product orientation : Customer orientation

• Customer relationship marketing

• “The delivery of customer satisfaction at a profit”

Marketing Plan

Communications Model

Transmission

Source Message Stakeholders Medium Feedback

The Elaboration Likelihood Model (Petty & Cacioppo, 1986)

• How involved are customers in the purchase?

• Central Route to Persuasion – Highly involved customers

– Think about arguments presented and carefully consider them

– People respond to message quality/credible sources

• Peripheral Route to Persuasion – Less involved customers

– Not motivated to think about arguments presented

– People response to peripheral marketing stimuli/attractive sources

Persuasion Knowledge Model (Friestad & Wright, 1994)

• Coping via skepticism when PK triggered

• Leads to greater scrutiny, use of the central route

• Resistance to traditional advertising, skepticism

Hybrid Communications Product Placements

Advertising Publicity

Pros Controlled Credible

Cons Not credible Lack of control

• Brands embedded within entertainment/editorial content

– Paid for, sponsorship not disclosed

• Controlled and credible brand message

History and Evolution of Brands in Popular Entertainment

• Long before Tom Cruise sported Ray-Ban’s Wayfarer sunglasses in the movie Risky Business in the 1980s (Leinster,

1987), a Corona typewriter was featured in the movie The Lost World in the 1920s (Cowan, 2009).

• Casual, ad hoc arrangements have turned into systematic and transactional ones

The Systematization of Product Placements

• Big successes in the 1980s (e.g., for Reese’s Pieces in the movie E.T. the Extraterrestrial)

• Motivations for companies: – Widespread access to ad-skipping technologies

– Skepticism toward ads

• Motivations for producers: – Major revenue source (e.g., ‘Man of Steel’; Bignell & Dunne, 2013)

• Rise in worldwide spending over past decade: – up 10.2% to $7.4 billion in 2011; expected to double by 2016 (PQ Media,

2012).

• Spans media (e.g., TV programs, movies, music, video games, books, and

other media; DeLorme & Reid, 1999).

Enterprise Branding Opportunities

• HR opportunity: Branding an enterprise/organization (as a great place to work with the goal of attracting talent) as opposed to the products it makes

• Google in the Internship

• Facebook in the Social Network

• US National Guard’s Soldier of Steel campaign in tandem with the Man of Steel

PR Firms’ Involvement in Product Placement Deal Making

Ethics and Call for Sponsorship Disclosures

• People need awareness/PK

• Demands for the protection through regulating placements and instituting sponsorship disclosures (e.g., Campbell et al., 2013).

• Yet, placements are so common today that they are not hard to detect (Karniouchina et al., 2011).

Regulatory Responses to Placements

• The US: the FTC requires disclosures before & after the program, and is considering disclosures at the time of the placement (Cain, 2011).

• The EU: restrictive regulations require logos and texts that explicitly indicate the presence of sponsorship.

• Finland and Ireland: placements are illegal.

• Canada: the practice is considered legitimate, and is unregulated.

– Placements in Canadian TV shows outstrip Hollywood (Moretti, 2010).

– The Canadian Radio-television and Telecommunications Commission (CRTC) no longer considers placements within the 12 min/hr cap for on-air TV ads.

– However, the CRTC remains open to guidance based on the extent and effects of placements (Ginosar & Levi-Faur, 2010).

Questions around Sponsorship Disclosures

• Are people aware and accepting of placements?

– Are sponsorship disclosures needed?

• Are there any media context effects (Bronner & Neijen, 2006)?

– Disclosures lower evaluations of radio shows, the host, and the radio station (Wei et al., 2008)

• What should the disclosure format and timing be?

– Most persistent disclosures evaluated unfavorably (Van Reijmersdal et al., 2013)

– Is it possible to protect welfare, while also protecting the brand/program?

• Effects for varying genres with varying immersive-ness (Slater &

Rouner, 2002)

The Reality is…

• Brand placements are here to stay and are only likely to intensify (PQ Media Global Product Placement Forecast 2012-2016).

• It is necessary to understand whether and in what form consumer welfare needs protection.

• PR firms need to be part of the conversation.

Questions?

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