Gini Dietrich

Gaining Respect for Yourself and the PR Industry

By: Gini Dietrich | January 19, 2011 | 
136

A few weeks ago, Doug Davidoff wrote an open letter to PR professionals, which speaks about the client’s view of our profession and how we’re stuck on tactics and not on results.

And on Monday, Les McKeown wrote “Living with the Pregnant Widow,” a tongue-in-cheek look at the so-called social media experts who, again, are stuck on the tactics and not on results (mostly because having a Facebook page or a Twitter account does not lead to business growth, directly).

The interesting thing about both of these letters (blog posts) is both Doug and Les run businesses and have hired PR firms. And they didn’t check with one another before writing their perspectives. This perception of our industry is pretty rampant and it’s also why mainstream media such as The Economist write articles like, “Public Relations: Rise of the Image Men.”

It’s our own fault, really. We ARE stuck on the tactics and the process and not on the results. And it’s because we’re typically not business people. We’re liberal arts people. We can skate by without ever having to take a business class or learn the difference between a P&L and a balance sheet or if revenue or income is better or how to grow the bottom line. Most of us have never walked in our client’s shoes and most of us likely won’t.

We’ve always gotten away with increased brand awareness and media impressions and advertising equivalencies. And that stuff is bogus because general accounting principles don’t value a company based on brand awareness (unless you’re Coca-Cola). It’s based on assets and income.

This is not going to be a one blog post lesson for PR professionals, but let’s begin now and continue next week.

Right now, learn the difference between the P&L and the balance sheet. Learn where equity and money invested plays into the business. Learn why profits exceeding expenses is better than a huge revenue number with huge overhead. Use Groupon as an example.

Find answers to the following questions:

  • How can Google offer them $6B to sell when their revenues (not income) are somewhere in the $300-$500 million range?
  • How can they raise $950MM on that kind of revenue number?
  • Why are they being valued on a multiple of their revenues and not on how much money they actually make?
  • How can the stock market be valuing them at $15B if they IPO?
  • How have they structured the business with debt and equity to not only pay out stock holders but the public when they IPO?

Granted, Groupon (and Facebook) is being way over-valuated and we’re about to have another bubble burst, but it’s a great way to begin to understand how a business makes money and how your efforts can help.

Ask questions.

If your company has an open book regarding financials, sit down with the CFO and have him/her explain how your business makes money and where the money goes. If your company does not have an open book policy, ask if the CFO will explain the P&L to you with $1 as an example.

For instance, if you take $1, is $0.60 of it going to payroll and $0.20 percent of it going to technology and $0.10 of it going to employee perks and $0.05 of it going to insurance and $0.04 of it going to reinvesting in growth and $0.01 of it going to bonuses and raises? I think you’ll be surprised at how it’s broken down.

Learn it. Understand it. Revel in it.

If you’re a solopreneuer or just starting your company, take some business classes. Find a mentor who has a financial mind. Join an organization like Vistage. Get yourself some help on this side of things or a) you won’t be able to counsel your clients effectively and b) you’ll never grow your business (or your income if you’re not going to hire staff).

Once you really understand how the company you work for makes money and once you’ve used examples such as Groupon to further your education, then you’ll be ready to begin having different conversations with your clients that lead to your becoming a growth generator, not an expense.

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro.

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136 Comments on "Gaining Respect for Yourself and the PR Industry"

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Doug_Davidoff
Doug_Davidoff
5 years 6 months ago

Great stuff Gini.

I’ve been talking for years about the need for salespeople to gain business acumen. Ever since I became aware of just how important it is, and the difference it makes; I’ve become increasingly aware that it’s not just salespeople who lack it. A PR professional with business acumen and judgment is, well, gold!

Thanks for the lesson – I may send a few salespeople over here to read it.

Doug_Davidoff
Doug_Davidoff
5 years 6 months ago

Great stuff Gini.

I’ve been talking for years about the need for salespeople to gain business acumen. Ever since I became aware of just how important it is, and the difference it makes; I’ve become increasingly aware that it’s not just salespeople who lack it. A PR professional with business acumen and judgment is, well, gold!

Thanks for the lesson – I may send a few salespeople over here to read it.

Jasper
5 years 6 months ago

Very true! The focus on tactics and “PR for the sake of PR” is definitely an issue. One that I think could be adressed by integrating marketing & PR departments and giving someone from that division a seat in the companies’ board. That way, that person is responsible as much for business decisions and economic success, as for the size and budget of the PR department…

As for Goupon: I don’t think its that simple. The value of that service lies in its growth potential, not in the current revenue (Amazon anyone?).

Jasper
5 years 6 months ago

Very true! The focus on tactics and “PR for the sake of PR” is definitely an issue. One that I think could be adressed by integrating marketing & PR departments and giving someone from that division a seat in the companies’ board. That way, that person is responsible as much for business decisions and economic success, as for the size and budget of the PR department…

As for Goupon: I don’t think its that simple. The value of that service lies in its growth potential, not in the current revenue (Amazon anyone?).

ginidietrich
ginidietrich
5 years 6 months ago

@Jasper I actually used Groupon for that very reason…PR pros don’t even understand how it’s valued for its growth potential (I actually think there isn’t any growth potential because the barrier to entry is so low, but that’s a different discussion). And you’re right – marketing professionals are required to take business classes so they get the financial wheels of a company’s growth. Perhaps the integration is how PR pros gain the knowledge they need.

ginidietrich
ginidietrich
5 years 6 months ago

@Jasper I actually used Groupon for that very reason…PR pros don’t even understand how it’s valued for its growth potential (I actually think there isn’t any growth potential because the barrier to entry is so low, but that’s a different discussion). And you’re right – marketing professionals are required to take business classes so they get the financial wheels of a company’s growth. Perhaps the integration is how PR pros gain the knowledge they need.

punchakpr
punchakpr
5 years 6 months ago

In a recent discussion about the most desired qualities for a PR person on LinkedIn the #1 answer was good writing skills. Clearly, business skills (not to mention leadership) are not particularly valued. Also, I haven’t come across a PR related job description yet that asks for an understanding of business. You hit the nail on the head, PR and business go hand in hand.

punchakpr
punchakpr
5 years 6 months ago

In a recent discussion about the most desired qualities for a PR person on LinkedIn the #1 answer was good writing skills. Clearly, business skills (not to mention leadership) are not particularly valued. Also, I haven’t come across a PR related job description yet that asks for an understanding of business. You hit the nail on the head, PR and business go hand in hand.

ginidietrich
ginidietrich
5 years 6 months ago

@Doug_Davidoff Especially when the salesperson is used to doing whatever it takes to make the sell and not look at what it means to the business. Just because you made the sale does not mean it’s a profitable piece of business.

ginidietrich
ginidietrich
5 years 6 months ago

@Doug_Davidoff Especially when the salesperson is used to doing whatever it takes to make the sell and not look at what it means to the business. Just because you made the sale does not mean it’s a profitable piece of business.

JulieWalraven
5 years 6 months ago

Great advice, Gini! Some days I feel like a start-up. I have learned more in the last two years or so about business operations … and I have outsourced and paid for more services than ever before in my 27+ years of being a solopreneur. 🙂 Small (like me) try to do everything themselves… and big businesses that should know better often start out without using the resources you should from the beginning.

JulieWalraven
5 years 6 months ago

Great advice, Gini! Some days I feel like a start-up. I have learned more in the last two years or so about business operations … and I have outsourced and paid for more services than ever before in my 27+ years of being a solopreneur. 🙂 Small (like me) try to do everything themselves… and big businesses that should know better often start out without using the resources you should from the beginning.

EricaAllison
5 years 6 months ago
Wow. This is chock full of business lessons. It’s dangerously close to home for me in that I’m a solopreneuer who is experiencing tremendous growth, to the point that I am about to hire someone. The thought of that terrifies me and exhilarates me all at the same time. I’m fortunate in that I am a very bottom line, practical kind of gal, who has entrepreneur parents with unbelievable business acumen. They are my board of directors and financial advisors at the moment. When I first started my business, my mom sat me down (biz major herself) and made me… Read more »
EricaAllison
5 years 6 months ago
Wow. This is chock full of business lessons. It’s dangerously close to home for me in that I’m a solopreneuer who is experiencing tremendous growth, to the point that I am about to hire someone. The thought of that terrifies me and exhilarates me all at the same time. I’m fortunate in that I am a very bottom line, practical kind of gal, who has entrepreneur parents with unbelievable business acumen. They are my board of directors and financial advisors at the moment. When I first started my business, my mom sat me down (biz major herself) and made me… Read more »
EricaAllison
5 years 6 months ago
Wow. This is chock full of business lessons. It’s dangerously close to home for me in that I’m a solopreneuer who is experiencing tremendous growth, to the point that I am about to hire someone. The thought of that terrifies me and exhilarates me all at the same time. I’m fortunate in that I am a very bottom line, practical kind of gal, who has entrepreneur parents with unbelievable business acumen. They are my board of directors and financial advisors at the moment. When I first started my business, my mom sat me down (biz major herself) and made me… Read more »
EricaAllison
5 years 6 months ago
Wow. This is chock full of business lessons. It’s dangerously close to home for me in that I’m a solopreneuer who is experiencing tremendous growth, to the point that I am about to hire someone. The thought of that terrifies me and exhilarates me all at the same time. I’m fortunate in that I am a very bottom line, practical kind of gal, who has entrepreneur parents with unbelievable business acumen. They are my board of directors and financial advisors at the moment. When I first started my business, my mom sat me down (biz major herself) and made me… Read more »
lesmckeown
lesmckeown
5 years 6 months ago
Good response, Gini – and all true. I would add is that while a good understanding of financials is important (it’s why I started my business career as the UK equivalent of a CPA), the *reason* it’s important is mostly to remove a barrier of communication with business owners and C-level execs. In other words, once it’s clear that you understand the financial impact of any discussion, you get a better hearing for the underlying strategies you’re proposing to the client. I’ve written elsewhere that financial literacy is one of the seven non-negotiable differentiators between mere competence and mastery of… Read more »
lesmckeown
lesmckeown
5 years 6 months ago
Good response, Gini – and all true. I would add is that while a good understanding of financials is important (it’s why I started my business career as the UK equivalent of a CPA), the *reason* it’s important is mostly to remove a barrier of communication with business owners and C-level execs. In other words, once it’s clear that you understand the financial impact of any discussion, you get a better hearing for the underlying strategies you’re proposing to the client. I’ve written elsewhere that financial literacy is one of the seven non-negotiable differentiators between mere competence and mastery of… Read more »
Soulati
Soulati
5 years 6 months ago

Isn’t that what investor relations is for, Gini? LOL (kidding). You’re spot on, and I’ve been wanting to respond re that “open letter” thing which boiled me. This PR industry criticism is nothing new. When you’ve been in the industry as long as I have, you get used to it, sort of.

What that means is what you suggested — never stop learning. Re-invent, re-innovate, and invigorate in what’s coming around the corner. If we don’t, we’re dead.

Soulati
Soulati
5 years 6 months ago

Isn’t that what investor relations is for, Gini? LOL (kidding). You’re spot on, and I’ve been wanting to respond re that “open letter” thing which boiled me. This PR industry criticism is nothing new. When you’ve been in the industry as long as I have, you get used to it, sort of.

What that means is what you suggested — never stop learning. Re-invent, re-innovate, and invigorate in what’s coming around the corner. If we don’t, we’re dead.

PeterFaur
PeterFaur
5 years 6 months ago
Gini, I got my MBA not because I wanted to be a CFO but because I wanted to be able to have an intelligent conversation with a CFO. Having the degree has helped me better understand the contributions that each department within a company makes to the overall enterprise. Your advice makes a critical point and comes at a good time. In our field, I don’t believe that every last thing we do can have a dollars-and-cents valuation placed on it. Communications is a process, and in business, that process usually moves through a cycle of gaining attention, to cultivating… Read more »
PeterFaur
PeterFaur
5 years 6 months ago
Gini, I got my MBA not because I wanted to be a CFO but because I wanted to be able to have an intelligent conversation with a CFO. Having the degree has helped me better understand the contributions that each department within a company makes to the overall enterprise. Your advice makes a critical point and comes at a good time. In our field, I don’t believe that every last thing we do can have a dollars-and-cents valuation placed on it. Communications is a process, and in business, that process usually moves through a cycle of gaining attention, to cultivating… Read more »
Lauren_AnnS
Lauren_AnnS
5 years 6 months ago
I’m about to graduate with a B.A. in Corporate Communications from a liberal arts college. Now, with that being said, I’m a 22-year-old aspiring into the field of Public Relations and Marketing, but have only taken one course in Marketing and and intro and writing course in PR. The intro to PR course I took emphasized the need for proficient writing and communication skills, and I’m fairly certain that the mention of business knowledge was a byline in a topic we discussed concerning different fields of expertise. For me, the lines between PR and Marketing are becoming more distorted as… Read more »
Lauren_AnnS
Lauren_AnnS
5 years 6 months ago
I’m about to graduate with a B.A. in Corporate Communications from a liberal arts college. Now, with that being said, I’m a 22-year-old aspiring into the field of Public Relations and Marketing, but have only taken one course in Marketing and and intro and writing course in PR. The intro to PR course I took emphasized the need for proficient writing and communication skills, and I’m fairly certain that the mention of business knowledge was a byline in a topic we discussed concerning different fields of expertise. For me, the lines between PR and Marketing are becoming more distorted as… Read more »
punchakpr
punchakpr
5 years 6 months ago
@Lauren_AnnS I’m studying PR as well, and completely agree with you. There’s a huge emphasis on linguistics. When I was doing my undergrad I did a minor in business. Those courses are still among the most useful I’ve ever taken. If you still have another semester, I highly recommend tagging along with the business students. They have a very different way of doing things than PR students. When I worked with them, in order to be really effective, I had to modify my behaviour and language. They spoke in numbers and used a lot of financial terms. Their bottom line… Read more »
punchakpr
punchakpr
5 years 6 months ago
@Lauren_AnnS I’m studying PR as well, and completely agree with you. There’s a huge emphasis on linguistics. When I was doing my undergrad I did a minor in business. Those courses are still among the most useful I’ve ever taken. If you still have another semester, I highly recommend tagging along with the business students. They have a very different way of doing things than PR students. When I worked with them, in order to be really effective, I had to modify my behaviour and language. They spoke in numbers and used a lot of financial terms. Their bottom line… Read more »
ginidietrich
ginidietrich
5 years 6 months ago

@punchakpr @Lauren_AnnS First of all, the two of you are a breath of fresh air! I love your thinking, your writing, and your curiosity. Secondly, Lauren…I agree with Whitney. I you have an elective class you can take, get yourself into a business class! It’ll put you heads and shoulders about your competition instantly.

ginidietrich
ginidietrich
5 years 6 months ago

@punchakpr @Lauren_AnnS First of all, the two of you are a breath of fresh air! I love your thinking, your writing, and your curiosity. Secondly, Lauren…I agree with Whitney. I you have an elective class you can take, get yourself into a business class! It’ll put you heads and shoulders about your competition instantly.

ginidietrich
ginidietrich
5 years 6 months ago
@PeterFaur Totally agree (and love it when you stop by here)! I did an interview this morning where the question was about ROI. I think the problem our industry has is two-fold: Everyone wants to be on the front page of the NY Times and doesn’t understand the time and effort that goes behind something like that (not to mention having something worthy if you’re not Steve Jobs) and we tend to be yes men and try to make it happen. Then, when it does happen, there is a short spike in traffic and lots of atta boys, but then… Read more »
ginidietrich
ginidietrich
5 years 6 months ago
@PeterFaur Totally agree (and love it when you stop by here)! I did an interview this morning where the question was about ROI. I think the problem our industry has is two-fold: Everyone wants to be on the front page of the NY Times and doesn’t understand the time and effort that goes behind something like that (not to mention having something worthy if you’re not Steve Jobs) and we tend to be yes men and try to make it happen. Then, when it does happen, there is a short spike in traffic and lots of atta boys, but then… Read more »
ginidietrich
ginidietrich
5 years 6 months ago

@Soulati LOL!! Goofball! Yes…never stop learning AND keep speaking our minds so The Economist, reality TV, and other mainstream media aren’t the only voices painting a picture of our industry.

ginidietrich
ginidietrich
5 years 6 months ago

@Soulati LOL!! Goofball! Yes…never stop learning AND keep speaking our minds so The Economist, reality TV, and other mainstream media aren’t the only voices painting a picture of our industry.

ginidietrich
ginidietrich
5 years 6 months ago

@lesmckeown And yet…

ginidietrich
ginidietrich
5 years 6 months ago

@lesmckeown And yet…

Lauren_AnnS
Lauren_AnnS
5 years 6 months ago

@punchakpr I am actually graduating in May, but plan to go back to school in a few years to obtain my graduate degree. I wholeheartedly agree with you about the business school vs communication school mentality. Even in the introduction courses, the first week or so is learning the techincal jargon of the marketing world and the PR world and each professor ardently stressed such differences.

Lauren_AnnS
Lauren_AnnS
5 years 6 months ago

@punchakpr I am actually graduating in May, but plan to go back to school in a few years to obtain my graduate degree. I wholeheartedly agree with you about the business school vs communication school mentality. Even in the introduction courses, the first week or so is learning the techincal jargon of the marketing world and the PR world and each professor ardently stressed such differences.

ginidietrich
ginidietrich
5 years 6 months ago

@EricaAllison Yes, yes, yes! 3hatscomm wrote a great comment on her own blog last week with the questions she asks clients to get them thinking of her as more than just someone to get them in the paper. Perhaps she’ll share them here. But my point is, I agree with you. And…if you ever want to chat about when it’s time to hire someone, my door is wide open for you!

ginidietrich
ginidietrich
5 years 6 months ago

@EricaAllison Yes, yes, yes! 3hatscomm wrote a great comment on her own blog last week with the questions she asks clients to get them thinking of her as more than just someone to get them in the paper. Perhaps she’ll share them here. But my point is, I agree with you. And…if you ever want to chat about when it’s time to hire someone, my door is wide open for you!

ginidietrich
ginidietrich
5 years 6 months ago

@JulieWalraven Like Walmart. Sigh…

ginidietrich
ginidietrich
5 years 6 months ago

@JulieWalraven Like Walmart. Sigh…

ginidietrich
ginidietrich
5 years 6 months ago

@punchakpr This makes my head hurt. I think you and I have had this conversation. It’s the same as when you ask a new college graduate why they want to work in PR and they say, “I’m really good with people!” The scary thing is, we hear this ALL THE TIME, which must mean they’re learning PR + good with people = success in school.

ginidietrich
ginidietrich
5 years 6 months ago

@punchakpr This makes my head hurt. I think you and I have had this conversation. It’s the same as when you ask a new college graduate why they want to work in PR and they say, “I’m really good with people!” The scary thing is, we hear this ALL THE TIME, which must mean they’re learning PR + good with people = success in school.

HowieSPM
HowieSPM
5 years 6 months ago
PR is Dead. Long live PR. I think the view of PR gets short shrift (is shrift a word?) anyway…until you need PR. Facebook is one of the worst at PR. From their stats page to how they roll out new features to how they handle the press. But they get a lot of free PR from the press who focus on just the shiny stuff vs the core. Look at Apple having to deal with PR this week with Steve taking a sick leave. Stock dropped in Europe then recovered. I blog a lot trying to help Marketing people… Read more »
HowieSPM
HowieSPM
5 years 6 months ago
PR is Dead. Long live PR. I think the view of PR gets short shrift (is shrift a word?) anyway…until you need PR. Facebook is one of the worst at PR. From their stats page to how they roll out new features to how they handle the press. But they get a lot of free PR from the press who focus on just the shiny stuff vs the core. Look at Apple having to deal with PR this week with Steve taking a sick leave. Stock dropped in Europe then recovered. I blog a lot trying to help Marketing people… Read more »
HowieSPM
HowieSPM
5 years 6 months ago
@ginidietrich @punchakpr @Lauren_AnnS PR has got to be the hardest of anything to figure out the ROI. Advertising is really hard and the Agencies love that because they can pretty much steal money from clients. Sadly. So my industry has enough of a bad name. I have a Finance Degree and tell people the CFO decides where to invest and they like something they can measure. Just ask @meganbeausang Where you can do your clients (and yourself) a big service is knowing more about their business vs just communications and finding things that you can figure out a way to… Read more »
HowieSPM
HowieSPM
5 years 6 months ago
@ginidietrich @punchakpr @Lauren_AnnS PR has got to be the hardest of anything to figure out the ROI. Advertising is really hard and the Agencies love that because they can pretty much steal money from clients. Sadly. So my industry has enough of a bad name. I have a Finance Degree and tell people the CFO decides where to invest and they like something they can measure. Just ask @meganbeausang Where you can do your clients (and yourself) a big service is knowing more about their business vs just communications and finding things that you can figure out a way to… Read more »
3HatsComm
3HatsComm
5 years 6 months ago
@ginidietrich @EricaAllison Thanks for the shout out Gini. I have to confess Erica, you sound more ahead of the game than I. I do have a lot of the same ideas about taking it a step further. I’m working to get myself away from that and position myself to be more of a counselor to clients than just the one-hit wonders you mentioned. It’s an educational process, you have to teach the clients that what they want may not be what they need. My problem is that’s not always a lesson clients are willing to learn, so .. working on… Read more »
3HatsComm
3HatsComm
5 years 6 months ago
@ginidietrich @EricaAllison Thanks for the shout out Gini. I have to confess Erica, you sound more ahead of the game than I. I do have a lot of the same ideas about taking it a step further. I’m working to get myself away from that and position myself to be more of a counselor to clients than just the one-hit wonders you mentioned. It’s an educational process, you have to teach the clients that what they want may not be what they need. My problem is that’s not always a lesson clients are willing to learn, so .. working on… Read more »
3HatsComm
3HatsComm
5 years 6 months ago
@ginidietrich @Jasper It’s why I minored in business administration .. you need to understand that communication is a business function and yet, it’s not ALWAYS the PR pro. I think it goes back to corporate culture, to business leaders being open to ideas and input from anywhere. To the engineers in R&D not snickering at ideas from marketing or feedback from the customer service dept. Sometimes you do get stuck doing the “pr for PR’s sake” but then, when you ask those questions about how you’ll use those reprints, how will these leads flow back to CRM and a referral… Read more »
3HatsComm
3HatsComm
5 years 6 months ago
@ginidietrich @Jasper It’s why I minored in business administration .. you need to understand that communication is a business function and yet, it’s not ALWAYS the PR pro. I think it goes back to corporate culture, to business leaders being open to ideas and input from anywhere. To the engineers in R&D not snickering at ideas from marketing or feedback from the customer service dept. Sometimes you do get stuck doing the “pr for PR’s sake” but then, when you ask those questions about how you’ll use those reprints, how will these leads flow back to CRM and a referral… Read more »
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