CHAPTER 18 Integrating with PR

After making the decision on guidance, gathering the target list of analysts

and portfolio managers, and understanding how best to approach them

given the understanding of their mindset, IR should coordinate the attack

with PR to ensure that the communications function is uniform. Doing so

can help companies avoid costly mistakes in its communications efforts.

In many cases traditional IR lacks the capital markets expertise to be effective.

An integrated IR and PR effort maximizes the time and money spent

on corporate communications, and generally speaking, lessens the risk profile

of the company. Both must work under the same story boards, lockstep

in strategy, and deliver the same message to all constituencies.

The PR component of corporate communications must touch many

constituencies, the media, employees, and the trade, in a parallel process

with IR where both help and neither hinders the other. Unless the PR professionals

understand the overall objectives of a CEO and board, which is to

increase long-term shareholder value, they can certainly inject risk into the

equation.

Accurate and favorable coverage in the media helps both public and private

companies validate their investment thesis, build their brand, attract

and retain talented employees, and build reputation capital with other key

stakeholders, including customers and communities. PR can also boost the

equity value of the company if it contributes to the perceived value of the

equation. Because it can be so important, then, PR and IR efforts must work

in a seamless fashion to ensure consistent delivery of key messages, which requires

fully refining the story, preparing executives to carry that message to

the media, and a proactive outreach program to generate interest in the form

of media exposure and press placements.

Media and The Street can feed off each other in a very effective one-two

punch. If a company has done its work with Wall Street and then wants to

go out to the public with information, through the media, they have the anp6

alyst’s favorable research (as long as guidance was conservative) on which to

build. In fact, research reports and analyst recommendations are reliable

third-party sources for reporters. Therefore, if done properly, the media

can be an effective source for the capital markets, generating broader

awareness and attracting potential investors and new analysts. PR and IR as

an integrated communications approach offers checks and balances to make

sure that each is helping the other to put the message forward as effectively

as possible.

MEDIA MACHINATIONS

Media exposure can be a blessing or a curse. When delivering the message

that underscores the company story, exposure is a boon and a powerful

conduit to exposure and awareness. When delivering a message that undermines

the company story, the media can become the bane of the company’s

existence.

Media channels—television, radio, magazines, Web sites, and newspapers—

are the most effective avenue to the general public. The media’s

reach and frequency capabilities, combined with access to the largest number

of people over the widest range of demographics, makes it the incomparable,

unparalleled, and possibly unsurpassable channel of communication

throughout the world. The media is so powerful that, many times, a company’s

success or failure can be in its hands. But the media can be friend, foe,

fair, unfair, or just plain fickle. It’s not a universe that any company, public

or private, can leave to chance.

BASIC PR

Basic PR includes a press kit with a company backgrounder, executive bios,

fact sheets with the company history and a summary of major milestones,

and a guided discussion of key messages, including the basic corporate

messages and the specific issues of the moment. The job of basic PR is

to gain attention for the company through placement or profiles in the

media, calculating which media vehicles are best and aggressively pursuing

these relationships.

Knowing the various outlets and targeting each one is another basic.

National television networks, radio shows, regional and local television and

radio stations, newspapers and magazines, and trade magazines and news-papers can number in the thousands. These outlets get many of their stories

directly from PR professionals, but also from press releases, earnings announcements,

conference calls, and industry investment conferences. A company’s

PR effort must pick and target the outlets that matter most.

PR and IR should be present during the executives’ media training. Presentation

skills—specifically, good rhetoric and persuasion—are not to be

taken for granted. Interviews can be distracting, and preparation is critical

to ensure that executives answer questions with authority and integrity,

while relaying a compelling value proposition, anchored around talking

points. PR and IR experts who know how to prepare and deliver the message

to these outlets should prepare executives for this task. One without the

other would do a sub-par job in all likelihood.

Media training sessions involve executives in front of a camera so they

can see what they actually look like in an interview. Executives invariably

find this extremely helpful. Likewise, PR professionals should interview executives

for a print story and then write the story they would have written as

reporters. This exercise shows them how that interview would have come off

in the press. When some executives say things that result in a negative statement,

they often think they have been misquoted. This mock print story

shows them when they weren’t and emphasizes the importance of specific,

rehearsed talking points. PR professionals can also prepare executives by

finding out the background, style, and story objective of the reporter and

then conducting a full prep session with sample questions that reflect this approach.

Call it media reconnaissance and media boot camp.

PR AND IR

As much as PR tries to understand and meet the needs of the media, the objectives

of the company are the priority. If a public relations effort will derail

an investor relations effort, or vice versa, then that effort is certainly hurtful

to the company. Therefore, an integrated PR/IR plan, with routine communication

between the groups, is absolutely key to the successful overall communications

strategy of the company. Without the integrated approach,

there’s simply too much reputation risk in the equation.

For example, a PR professional might time a news release to meet a reporter’s

deadline. However, this may not work best for IR, which would

rather delay the same announcement until the market is closed. The integrated

effort, one in which the two functions work hand-in-hand, makes both

efforts more effective, maximizing time and money for senior management.

UNDERSTANDING THE AUDIENCE

The PR portion of any communications effort should ideally include professionals

who came from the media so that they understand the responsibilities

and objectives of the reporters, their editors, or the producers. This same

philosophy is recommended for IR, that is, having the IR professional come

from a capital markets background.

Reporters are responsible for finding good ideas that interest their readers

or viewers. In selling a story to the media, the company needs to consider

the demographic of the reporter’s audience; the personality of the newspaper,

magazine, or television program; and the style of the particular writer or

reporter. With that legwork done, the company should then position the

story so it makes sense to the reporter, with an angle that is valuable.

Ideally, a company should get to know the reporter’s history and reference

an article or story that the reporter previously covered. The company

can then speak specifically to how the story or angle would be of interest.

Reporters are swamped with hundreds of story pitches a day, so a company

that has a grip on the reporter’s mindset is of great value. A company that

gets it right the first time can build a strong relationship.

Knowing the reporters is a never-ending process. Unlike analysts who

work in one sector for most of their careers, reporters constantly switch

beats, jump across departments, or move to new outlets. The company’s PR

effort must be vigilant in its efforts to stay up-to-date on the huge pool of

who’s who and who’s where.

IR and PR should also initiate media opportunities, frequently scanning

newswires and PR Web sites that list the stories, angles, and sources for

which reporters are looking. By providing useful and interesting news, not

to mention some industry education, the company can establish itself for a

reporter as a reliable resource going forward.

Once a company’s IR and PR efforts have proven themselves with the

media by delivering good, quality information, that relationship can work

the other way too. Producers and editors need stories and often call companies

to provide that story, quote, or fact. When the audience is calling

the subject, the PR team has done a good job of establishing itself with

the media.

PERSONALIZING THE PITCH

Companies pitch the media on many different levels, from hard news such as

a financial release of earnings to soft news features such as an executive profile. The key is to make the news, whatever type it is, actually newsworthy.

Most of the time, the media is looking for something novel, distinct, creative,

and exciting. If it’s financial earnings, then the company should emphasize

the most distinct and interesting aspect of the story, such as increasing

same store sales ten quarters in a row or something that dramatically

makes the company distinct from its peers.

Every story plays differently to each type of media outlet as well as the

specific segment or section that will carry it. Moreover, a pitch for a news

article is going to be far different than a pitch for a feature. A story that

works well for finance plays differently for general business. Corporate or

executive profiles may work in one arena, a division or product profile in

another. The various platforms provide an opportunity for the company to

pick certain parts of the business or various executives to highlight, which

means there’s fertile ground all over any given company for finding a story.

Therefore, the company that wants media attention should harvest the people

and activities in the company that might be news and literally create the

story. A pending patent, a project development, or an innovative executive

are all prospects.

State Government Utility Organization (SGUO) had just concluded a

survey that led to a new public program. State Capitol Press, the local

newspaper, had a reporter who was an expert on the issue and he

wanted an exclusive. This was an important newspaper for this client,

but it didn’t represent the kind of media outlet that would give legs to

the story. SGUO needed a broader scope and a solution that would be

respectful to the State Capitol Press, yet still keep the story fresh so that

the organization could reach out to the wider media.

None of the ideas on how to give everyone what they wanted made

everyone happy. Then IR and PR zeroed in on the specific needs of the

reporter who wanted the exclusive, and considered the angles that

would appeal to general media.

The solution? Cut the news up.

The story became the two halves: survey results, and the program

that would stem from that research. The State Capitol Press reporter received

the exclusive to the survey results, which satisfied him and also

gave the Utility Organization good publicity in its hometown. Then, a

few days later, we unveiled the program initiative at a press conference.

The local reporter had his breaking news, and the story found a greater

audience.

Timeliness and exclusivity are requirements that PR should always consider.

For some stories, on some days, some of the media want exclusives or

they won’t take it. Other times, everyone takes the same story the day it

breaks. When PR has to make the choice of one outlet over another, they

must weigh the importance of each channel over the long run.

Many times, repurposing a story with a different angle isn’t enough. But

given a little flexibility and creativity, PR can get both birds in the bush.

UNCOVERING THE ANGLE

During the IR audit, the PR function should conduct a PR audit to uncover

the media value proposition, which means finding the story and what makes Window Shops, a small, publicly traded clothing retailer, was pursuing

a geographic expansion strategy through an acquisition of a privately

owned regional chain. Window Shops’ stores, which were located in

small towns and rural areas, provided top global brands at a discount.

Because Window Shops was small and relatively unknown, the media

was, most likely, not going to pick the story up on their own.

The company needed an angle.

Given the current climate, the industry, the economy, and general

trends, IR decided that media outlets might like something very Americana

that spoke to quality and value. The tag line: “Where Main Street

Meets Fifth Avenue” was developed. It was pithy, yet loaded, clearly

identifying the stores as quaint, but sophisticated. A place that provided

the everyman (and everywoman) with access to glamour. The American

dream in a nutshell.

Several national media outlets called for the story.

Then came the appeal to the business media. Window Shops had

recently emerged from bankruptcy, and the acquisition was a calculated,

yet courageous, move. The business media might find this strategy,

especially during a difficult economy, inspiring and interesting; the

angle, “Big Bold Move for Small Town Retailer,” grabbed the attention

of the targeted media outlets.

Simultaneously, IR translated the story for Wall Street, focusing on

diversification of earnings, accretion, and conservative expectations. Ultimately,

the analyst’s enthusiasm for the acquisition gave the media the

third-party quotes needed to validate the story.

it interesting and entertaining—in other words, hunting down the angle.

Similar to the way IR hones in on the specific needs of investors, PR should

tailor the story to meet the demands of each outlet. Timing and content are

planned out, and a coordinated execution strategy should ensue.

STAYING AHEAD OF THE STORY

The best PR stays ahead of the media.

Novel Novelties, a toy and hobby manufacturer, was changing its selling

season from four times a year to three. This move made sense for them

strategically, as it would create operating efficiencies and eventually increase

their margins. In the meantime, though, it increased their inventory levels

and decreased inventory turns in comparison to the previous year.

Anyone reading the company’s numbers would see increases and decreases

in all the wrong place. The potential headline, “Inventories Sky

Rocket at Novel Novelties,” needed to be quelled.

After the market closed, IR distributed a release announcing the change

in Novel Novelties’ selling season with an explanation of the skewed comparison.

It included a presentation of how well other companies, who’d

done the same thing, had fared. A release to the general media stated a similar

positioning, and the analysts were now on board to back it up with

quotes. The IR and PR preparation stemmed the potential headline.

Another example is Green Slipper, an apparel company that planned

to enter the entertainment industry even though its competitor, Red Shoe,

had failed in that arena. IR knew that the strategy would work for Green

Slipper, but that the company needed better positioning than its competitor

had.

Following an overblown launch orchestrated by a stand-alone PR

agency Green Slipper’s stock dipped. The company’s instinct was to continue

onward, but downplay the move—in effect underpromising with the hope of

overdelivering. The important point was for Green Slipper’s stakeholders,

specifically employees, to explain, differentiate, and support the move.

The PR effort provided an angle to the media: Green Slipper’s new strategy

would promote the brand as more of a lifestyle than a product. The IR

effort took a similar story to The Street. As a result, the stock rose, rather

than sank, like their competitor’s had.

The joint efforts of PR and IR made the difference.

The following story illustrates the preventive measures of a combined IR

and PR effort to stave off a potential flood of bad press for Orange Foods, a

restaurant company.

CLOSING THE LOOP

PR must engage in market intelligence similar to IR. By collecting the media

coverage and creating an overview and strategy for the company, executives

can see how they are viewed by the outside world and how well they are get-

The Looming Threat of Bad Press

Orange Foods had a potentially negative media story nipping at its

door. The founders of Orange Foods had recently bought it back from

the corporation to which they sold it and brought in a new CEO.

The company was doing well, but the CEO set aggressive targets

with Wall Street and was overpromising future success on a somewhat

loose foundation. The CEO was soon chasing his own tail, making

short-term moves to deliver on his promises and, in the meantime,

damaging the financial performance of Orange Foods because necessary

spending had been curtailed. The founders and the CEO parted

ways, and the founders took over the reigns. They set to work immediately

to fix the problems and were successful.

During the transition, though, Orange Foods had a potentially

damaging story on its hands. Orange was a very visible company, and

investors seemed keenly aware of the instability at the corporate level.

Our IR and PR teams worked together to reduce the risk to the company’s

equity value.

The problem was twofold, the potential flood of bad press and the

angle the media would take. Every reporter was knocking on the door

for the story and aggressively pursuing management for quotes. The

last thing anyone wanted was to subject management to such an onslaught,

or risk a maverick expose.

The solution was to go to one specific reporter who IR knew well

and give her everything, the entire story, as an exclusive. The angle

pitched was heavily focused on the return of the founders and their desire

to come back and reinforce their original vision. We knew this reporter

would blow out the story, creating big news for her newspaper,

but the story was now about a company promising quality and the executive

instability was overshadowed.

Her paper printed the story, the information was out, and now it

was old news. No one else wanted to write the same story after the fact.

The other reporters went away.

ting their story across to the media. PR should also collect this image and

perspective data from other constituencies, such as vendors, customers, and

consumers. Sometimes, in addition to educating the company, feedback can

also create a story opportunity.

For a company that provided business software, IR gathered feedback,

both criticism and testimonials, from its strategic partners. One of the company’s

customers shared an interesting story about how the firm’s software

solutions attacked some problems it had and added value to that customer’s

bottom line. After placing this story on the software company’s Web site

and in media marketing materials, several reporters picked up on the angle

of the difference one company can make, and the software provider received

some positive press. This common PR method should be utilized whenever

possible.

PR AND GUIDANCE

IR and PR are mirror images of each other in that they both position a story,

and they both reach out to constituents that are powerful and very busy. IR

and PR are not jobs for the inexperienced. Companies spend lots of time, effort,

and money on the process. Management wants to maximize this

spending, and the best way to do so is through conservative guidance to

Wall Street.

Conservative guidance has the power to take risk out of a stock. It also

has the power to bring conviction out of the analysts as they write flattering

reports about the company and argue that it’s undervalued. Therefore, when

the media is doing a story on the company and looks to the research reports,

third-party validation is there in a very positive way.

Another reason conservative guidance can help the communication effort

is that managing expectations conservatively will likely position the

company to match or exceed estimates for several quarters in a row. If a reporter

then shows up to do a negative story on the company or management,

there’s no way he/she can avoid the fact that management has

matched Wall Street estimates for four quarters straight and delivered for

shareholders. Similarly, if the reporter were to do a positive story, that string

of successes puts an exclamation point on the article.

Without guidance or with aggressive guidance, it’s totally a different

ballgame. A reporter can make a negative article very negative by highlighting

quarterly misses or an inconsistent earnings pattern. Also, positive stories

can be tempered by management’s lack of financial performance. Therefore,

without conservative guidance, the entire media strategy is at risk, potentially wasting time and money as reporters focus more on management

inconsistency than the intended purpose of the article, the company’s positive

outlook.

That goes for employees and vendors too. Obviously, employees develop

pride and satisfaction from the solid financial performance of the company.

Conservative guidance increases the chances that internal PR will relay

positive quarterly results, rather than inconsistent results. The latter can be

very frustrating to employees, affecting performance, morale, and possibly

turnover. Vendors want to be a part of the success as well, and stringing together

several positive quarters relative to guidance may keep those vendors

loyal. Subtle communication via PR to all vendors may result in increased

loyalty and, in all likelihood, better negotiating leverage for management.

Providing conservative financial guidance sets the table for an integrated

PR effort that successfully can feed the media, employees, and vendors,

thereby elevating the performance of the entire organization. It’s a key factor

in the delivery stage of communications.

After making the decision on guidance, gathering the target list of analysts

and portfolio managers, and understanding how best to approach them

given the understanding of their mindset, IR should coordinate the attack

with PR to ensure that the communications function is uniform. Doing so

can help companies avoid costly mistakes in its communications efforts.

In many cases traditional IR lacks the capital markets expertise to be effective.

An integrated IR and PR effort maximizes the time and money spent

on corporate communications, and generally speaking, lessens the risk profile

of the company. Both must work under the same story boards, lockstep

in strategy, and deliver the same message to all constituencies.

The PR component of corporate communications must touch many

constituencies, the media, employees, and the trade, in a parallel process

with IR where both help and neither hinders the other. Unless the PR professionals

understand the overall objectives of a CEO and board, which is to

increase long-term shareholder value, they can certainly inject risk into the

equation.

Accurate and favorable coverage in the media helps both public and private

companies validate their investment thesis, build their brand, attract

and retain talented employees, and build reputation capital with other key

stakeholders, including customers and communities. PR can also boost the

equity value of the company if it contributes to the perceived value of the

equation. Because it can be so important, then, PR and IR efforts must work

in a seamless fashion to ensure consistent delivery of key messages, which requires

fully refining the story, preparing executives to carry that message to

the media, and a proactive outreach program to generate interest in the form

of media exposure and press placements.

Media and The Street can feed off each other in a very effective one-two

punch. If a company has done its work with Wall Street and then wants to

go out to the public with information, through the media, they have the anp6

alyst’s favorable research (as long as guidance was conservative) on which to

build. In fact, research reports and analyst recommendations are reliable

third-party sources for reporters. Therefore, if done properly, the media

can be an effective source for the capital markets, generating broader

awareness and attracting potential investors and new analysts. PR and IR as

an integrated communications approach offers checks and balances to make

sure that each is helping the other to put the message forward as effectively

as possible.

MEDIA MACHINATIONS

Media exposure can be a blessing or a curse. When delivering the message

that underscores the company story, exposure is a boon and a powerful

conduit to exposure and awareness. When delivering a message that undermines

the company story, the media can become the bane of the company’s

existence.

Media channels—television, radio, magazines, Web sites, and newspapers—

are the most effective avenue to the general public. The media’s

reach and frequency capabilities, combined with access to the largest number

of people over the widest range of demographics, makes it the incomparable,

unparalleled, and possibly unsurpassable channel of communication

throughout the world. The media is so powerful that, many times, a company’s

success or failure can be in its hands. But the media can be friend, foe,

fair, unfair, or just plain fickle. It’s not a universe that any company, public

or private, can leave to chance.

BASIC PR

Basic PR includes a press kit with a company backgrounder, executive bios,

fact sheets with the company history and a summary of major milestones,

and a guided discussion of key messages, including the basic corporate

messages and the specific issues of the moment. The job of basic PR is

to gain attention for the company through placement or profiles in the

media, calculating which media vehicles are best and aggressively pursuing

these relationships.

Knowing the various outlets and targeting each one is another basic.

National television networks, radio shows, regional and local television and

radio stations, newspapers and magazines, and trade magazines and news-papers can number in the thousands. These outlets get many of their stories

directly from PR professionals, but also from press releases, earnings announcements,

conference calls, and industry investment conferences. A company’s

PR effort must pick and target the outlets that matter most.

PR and IR should be present during the executives’ media training. Presentation

skills—specifically, good rhetoric and persuasion—are not to be

taken for granted. Interviews can be distracting, and preparation is critical

to ensure that executives answer questions with authority and integrity,

while relaying a compelling value proposition, anchored around talking

points. PR and IR experts who know how to prepare and deliver the message

to these outlets should prepare executives for this task. One without the

other would do a sub-par job in all likelihood.

Media training sessions involve executives in front of a camera so they

can see what they actually look like in an interview. Executives invariably

find this extremely helpful. Likewise, PR professionals should interview executives

for a print story and then write the story they would have written as

reporters. This exercise shows them how that interview would have come off

in the press. When some executives say things that result in a negative statement,

they often think they have been misquoted. This mock print story

shows them when they weren’t and emphasizes the importance of specific,

rehearsed talking points. PR professionals can also prepare executives by

finding out the background, style, and story objective of the reporter and

then conducting a full prep session with sample questions that reflect this approach.

Call it media reconnaissance and media boot camp.

PR AND IR

As much as PR tries to understand and meet the needs of the media, the objectives

of the company are the priority. If a public relations effort will derail

an investor relations effort, or vice versa, then that effort is certainly hurtful

to the company. Therefore, an integrated PR/IR plan, with routine communication

between the groups, is absolutely key to the successful overall communications

strategy of the company. Without the integrated approach,

there’s simply too much reputation risk in the equation.

For example, a PR professional might time a news release to meet a reporter’s

deadline. However, this may not work best for IR, which would

rather delay the same announcement until the market is closed. The integrated

effort, one in which the two functions work hand-in-hand, makes both

efforts more effective, maximizing time and money for senior management.

UNDERSTANDING THE AUDIENCE

The PR portion of any communications effort should ideally include professionals

who came from the media so that they understand the responsibilities

and objectives of the reporters, their editors, or the producers. This same

philosophy is recommended for IR, that is, having the IR professional come

from a capital markets background.

Reporters are responsible for finding good ideas that interest their readers

or viewers. In selling a story to the media, the company needs to consider

the demographic of the reporter’s audience; the personality of the newspaper,

magazine, or television program; and the style of the particular writer or

reporter. With that legwork done, the company should then position the

story so it makes sense to the reporter, with an angle that is valuable.

Ideally, a company should get to know the reporter’s history and reference

an article or story that the reporter previously covered. The company

can then speak specifically to how the story or angle would be of interest.

Reporters are swamped with hundreds of story pitches a day, so a company

that has a grip on the reporter’s mindset is of great value. A company that

gets it right the first time can build a strong relationship.

Knowing the reporters is a never-ending process. Unlike analysts who

work in one sector for most of their careers, reporters constantly switch

beats, jump across departments, or move to new outlets. The company’s PR

effort must be vigilant in its efforts to stay up-to-date on the huge pool of

who’s who and who’s where.

IR and PR should also initiate media opportunities, frequently scanning

newswires and PR Web sites that list the stories, angles, and sources for

which reporters are looking. By providing useful and interesting news, not

to mention some industry education, the company can establish itself for a

reporter as a reliable resource going forward.

Once a company’s IR and PR efforts have proven themselves with the

media by delivering good, quality information, that relationship can work

the other way too. Producers and editors need stories and often call companies

to provide that story, quote, or fact. When the audience is calling

the subject, the PR team has done a good job of establishing itself with

the media.

PERSONALIZING THE PITCH

Companies pitch the media on many different levels, from hard news such as

a financial release of earnings to soft news features such as an executive profile. The key is to make the news, whatever type it is, actually newsworthy.

Most of the time, the media is looking for something novel, distinct, creative,

and exciting. If it’s financial earnings, then the company should emphasize

the most distinct and interesting aspect of the story, such as increasing

same store sales ten quarters in a row or something that dramatically

makes the company distinct from its peers.

Every story plays differently to each type of media outlet as well as the

specific segment or section that will carry it. Moreover, a pitch for a news

article is going to be far different than a pitch for a feature. A story that

works well for finance plays differently for general business. Corporate or

executive profiles may work in one arena, a division or product profile in

another. The various platforms provide an opportunity for the company to

pick certain parts of the business or various executives to highlight, which

means there’s fertile ground all over any given company for finding a story.

Therefore, the company that wants media attention should harvest the people

and activities in the company that might be news and literally create the

story. A pending patent, a project development, or an innovative executive

are all prospects.

State Government Utility Organization (SGUO) had just concluded a

survey that led to a new public program. State Capitol Press, the local

newspaper, had a reporter who was an expert on the issue and he

wanted an exclusive. This was an important newspaper for this client,

but it didn’t represent the kind of media outlet that would give legs to

the story. SGUO needed a broader scope and a solution that would be

respectful to the State Capitol Press, yet still keep the story fresh so that

the organization could reach out to the wider media.

None of the ideas on how to give everyone what they wanted made

everyone happy. Then IR and PR zeroed in on the specific needs of the

reporter who wanted the exclusive, and considered the angles that

would appeal to general media.

The solution? Cut the news up.

The story became the two halves: survey results, and the program

that would stem from that research. The State Capitol Press reporter received

the exclusive to the survey results, which satisfied him and also

gave the Utility Organization good publicity in its hometown. Then, a

few days later, we unveiled the program initiative at a press conference.

The local reporter had his breaking news, and the story found a greater

audience.

Timeliness and exclusivity are requirements that PR should always consider.

For some stories, on some days, some of the media want exclusives or

they won’t take it. Other times, everyone takes the same story the day it

breaks. When PR has to make the choice of one outlet over another, they

must weigh the importance of each channel over the long run.

Many times, repurposing a story with a different angle isn’t enough. But

given a little flexibility and creativity, PR can get both birds in the bush.

UNCOVERING THE ANGLE

During the IR audit, the PR function should conduct a PR audit to uncover

the media value proposition, which means finding the story and what makes Window Shops, a small, publicly traded clothing retailer, was pursuing

a geographic expansion strategy through an acquisition of a privately

owned regional chain. Window Shops’ stores, which were located in

small towns and rural areas, provided top global brands at a discount.

Because Window Shops was small and relatively unknown, the media

was, most likely, not going to pick the story up on their own.

The company needed an angle.

Given the current climate, the industry, the economy, and general

trends, IR decided that media outlets might like something very Americana

that spoke to quality and value. The tag line: “Where Main Street

Meets Fifth Avenue” was developed. It was pithy, yet loaded, clearly

identifying the stores as quaint, but sophisticated. A place that provided

the everyman (and everywoman) with access to glamour. The American

dream in a nutshell.

Several national media outlets called for the story.

Then came the appeal to the business media. Window Shops had

recently emerged from bankruptcy, and the acquisition was a calculated,

yet courageous, move. The business media might find this strategy,

especially during a difficult economy, inspiring and interesting; the

angle, “Big Bold Move for Small Town Retailer,” grabbed the attention

of the targeted media outlets.

Simultaneously, IR translated the story for Wall Street, focusing on

diversification of earnings, accretion, and conservative expectations. Ultimately,

the analyst’s enthusiasm for the acquisition gave the media the

third-party quotes needed to validate the story.

it interesting and entertaining—in other words, hunting down the angle.

Similar to the way IR hones in on the specific needs of investors, PR should

tailor the story to meet the demands of each outlet. Timing and content are

planned out, and a coordinated execution strategy should ensue.

STAYING AHEAD OF THE STORY

The best PR stays ahead of the media.

Novel Novelties, a toy and hobby manufacturer, was changing its selling

season from four times a year to three. This move made sense for them

strategically, as it would create operating efficiencies and eventually increase

their margins. In the meantime, though, it increased their inventory levels

and decreased inventory turns in comparison to the previous year.

Anyone reading the company’s numbers would see increases and decreases

in all the wrong place. The potential headline, “Inventories Sky

Rocket at Novel Novelties,” needed to be quelled.

After the market closed, IR distributed a release announcing the change

in Novel Novelties’ selling season with an explanation of the skewed comparison.

It included a presentation of how well other companies, who’d

done the same thing, had fared. A release to the general media stated a similar

positioning, and the analysts were now on board to back it up with

quotes. The IR and PR preparation stemmed the potential headline.

Another example is Green Slipper, an apparel company that planned

to enter the entertainment industry even though its competitor, Red Shoe,

had failed in that arena. IR knew that the strategy would work for Green

Slipper, but that the company needed better positioning than its competitor

had.

Following an overblown launch orchestrated by a stand-alone PR

agency Green Slipper’s stock dipped. The company’s instinct was to continue

onward, but downplay the move—in effect underpromising with the hope of

overdelivering. The important point was for Green Slipper’s stakeholders,

specifically employees, to explain, differentiate, and support the move.

The PR effort provided an angle to the media: Green Slipper’s new strategy

would promote the brand as more of a lifestyle than a product. The IR

effort took a similar story to The Street. As a result, the stock rose, rather

than sank, like their competitor’s had.

The joint efforts of PR and IR made the difference.

The following story illustrates the preventive measures of a combined IR

and PR effort to stave off a potential flood of bad press for Orange Foods, a

restaurant company.

CLOSING THE LOOP

PR must engage in market intelligence similar to IR. By collecting the media

coverage and creating an overview and strategy for the company, executives

can see how they are viewed by the outside world and how well they are get-

The Looming Threat of Bad Press

Orange Foods had a potentially negative media story nipping at its

door. The founders of Orange Foods had recently bought it back from

the corporation to which they sold it and brought in a new CEO.

The company was doing well, but the CEO set aggressive targets

with Wall Street and was overpromising future success on a somewhat

loose foundation. The CEO was soon chasing his own tail, making

short-term moves to deliver on his promises and, in the meantime,

damaging the financial performance of Orange Foods because necessary

spending had been curtailed. The founders and the CEO parted

ways, and the founders took over the reigns. They set to work immediately

to fix the problems and were successful.

During the transition, though, Orange Foods had a potentially

damaging story on its hands. Orange was a very visible company, and

investors seemed keenly aware of the instability at the corporate level.

Our IR and PR teams worked together to reduce the risk to the company’s

equity value.

The problem was twofold, the potential flood of bad press and the

angle the media would take. Every reporter was knocking on the door

for the story and aggressively pursuing management for quotes. The

last thing anyone wanted was to subject management to such an onslaught,

or risk a maverick expose.

The solution was to go to one specific reporter who IR knew well

and give her everything, the entire story, as an exclusive. The angle

pitched was heavily focused on the return of the founders and their desire

to come back and reinforce their original vision. We knew this reporter

would blow out the story, creating big news for her newspaper,

but the story was now about a company promising quality and the executive

instability was overshadowed.

Her paper printed the story, the information was out, and now it

was old news. No one else wanted to write the same story after the fact.

The other reporters went away.

ting their story across to the media. PR should also collect this image and

perspective data from other constituencies, such as vendors, customers, and

consumers. Sometimes, in addition to educating the company, feedback can

also create a story opportunity.

For a company that provided business software, IR gathered feedback,

both criticism and testimonials, from its strategic partners. One of the company’s

customers shared an interesting story about how the firm’s software

solutions attacked some problems it had and added value to that customer’s

bottom line. After placing this story on the software company’s Web site

and in media marketing materials, several reporters picked up on the angle

of the difference one company can make, and the software provider received

some positive press. This common PR method should be utilized whenever

possible.

PR AND GUIDANCE

IR and PR are mirror images of each other in that they both position a story,

and they both reach out to constituents that are powerful and very busy. IR

and PR are not jobs for the inexperienced. Companies spend lots of time, effort,

and money on the process. Management wants to maximize this

spending, and the best way to do so is through conservative guidance to

Wall Street.

Conservative guidance has the power to take risk out of a stock. It also

has the power to bring conviction out of the analysts as they write flattering

reports about the company and argue that it’s undervalued. Therefore, when

the media is doing a story on the company and looks to the research reports,

third-party validation is there in a very positive way.

Another reason conservative guidance can help the communication effort

is that managing expectations conservatively will likely position the

company to match or exceed estimates for several quarters in a row. If a reporter

then shows up to do a negative story on the company or management,

there’s no way he/she can avoid the fact that management has

matched Wall Street estimates for four quarters straight and delivered for

shareholders. Similarly, if the reporter were to do a positive story, that string

of successes puts an exclamation point on the article.

Without guidance or with aggressive guidance, it’s totally a different

ballgame. A reporter can make a negative article very negative by highlighting

quarterly misses or an inconsistent earnings pattern. Also, positive stories

can be tempered by management’s lack of financial performance. Therefore,

without conservative guidance, the entire media strategy is at risk, potentially wasting time and money as reporters focus more on management

inconsistency than the intended purpose of the article, the company’s positive

outlook.

That goes for employees and vendors too. Obviously, employees develop

pride and satisfaction from the solid financial performance of the company.

Conservative guidance increases the chances that internal PR will relay

positive quarterly results, rather than inconsistent results. The latter can be

very frustrating to employees, affecting performance, morale, and possibly

turnover. Vendors want to be a part of the success as well, and stringing together

several positive quarters relative to guidance may keep those vendors

loyal. Subtle communication via PR to all vendors may result in increased

loyalty and, in all likelihood, better negotiating leverage for management.

Providing conservative financial guidance sets the table for an integrated

PR effort that successfully can feed the media, employees, and vendors,

thereby elevating the performance of the entire organization. It’s a key factor

in the delivery stage of communications.