Jun9

GM’s Donated Corvette Highlights PR Challenge

by Heather Whaling

While a number of PR people – a band of leaders, headed by Katie Paine – decry the value of the ad equivalency report as a measure for public relations activities, there’s a reason it still exists. Most of the reasons for its continued use are bogus, but there is one that speaks volumes: Advertising is an “understood” medium in the boardroom … while PR is still misunderstood. Consequently, this leads to the devaluing of PR in far too many organizations.

Case in point: The uproar over General Motor’s decision to give a free corvette to Armado Galarraga, the Detroit Tiger’s pitcher who lost his perfect game because of an umpire’s mistake. From the New York Times:

A free sports car for a Detroit Tigers baseball player was not among the reasons the government saved General Motors from financial collapse.

Rep. Issa, a Congressman from California, has questioned whether this was an effective use of GM’s resources.. According to his spokesperson:

“Until G.M. has repaid the taxpayers in full for the money they have borrowed, every action that G.M. takes should advance them in that direction.”

Of course GM should do what it can to fully repay their government loans, but as GM pointed, that includes investing in public relations, marketing, sponsorships and advertising. If you watch the NBA playoffs, you’ve surely seen GM’s ads. Are watchdogs questioning this high-priced communication tactic (which, by the way, is costing the company far more than one donated car)? Of course not. Generally speaking, people believe that advertising will drive sales, which will enable the company to repay its loans.

Which takes us back to my original point: Management doesn’t “get” PR. How many people read articles that highlighted GM’s gift to Gallaaga? It’s hard to say for sure, but it’s safe to assume it was a PR “homerun” — reaching far more people than a $50,000 (the approximate value of the donated corvette) national ad buy. And, that does matter – even if it’s hard to quantify.

Don’t misunderstand: I’m not calling for a return to ad equivalency reports. To the contrary, I’m saying us PR pros need to step up our game. Do a better job explaining why media placements matter. Reiterate over and over again that PR is more than just media relations (and, for that matter, more than just social media!).

Two communication thought-leaders, Chuck Hemann and Amber Naslund – recently had an interesting back-and-forth on Twitter about PR. They weren’t discussing this topic specifically, but one of Amber’s comments resonated: “No issue is indicative of an entire industry. But, you don’t ignore its potential to impact it.” She very easily could have been helping me make my point. We can’t ignore the fact that advertising “speaks” more clearly to decision makers. They understand (or think they understand) it. hey don’t appreciate the value of awareness, friends/fans or even scores of media placements because we’re not explaining why they matter in business terms. Know what that means? We need to change. They’re the decision maker. They’re in charge. We need to develop a vocabulary that they understand. Otherwise, PR will continue to be devalued … and locked out of the boardroom. But, we know we do our jobs that much better when we have a seat at table.

What do you think?

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Hey Heather - thanks for the shout. Sorry I'm late in responding here. The organizations that are winning treat the disciplines as complimentary mechanisms to achieve success for whatever mission/goal. Does PR have to meet advertising in the middle? Does advertising need to meet PR in the middle? I don't know, but my gut says I don't think so. Social media may be the great equalizer. My own personal view is that social media belongs under PR's purview, but that the team is cross-functional. If PR is leading that engine, there's no reason they should be trying to accommodate any other department.

Heather,

Good to see interest continues in this thread. I appreciate that this was covered in the NYT. But a reporter questioning PR is nothing new, and politicians piling on is a given. Where are the legs? If this were a serious issue it would still be front and center.

As a GM shareholder, I am not at all dismayed by this. My expectation is that the company should operate responsibly and make a profit. This conflicts with neither.

I like the point you made in your post that people arenu00e2u0080u0099t complaining about GM spending on advertising, which costs far more than this event. Iu00e2u0080u0099m no fan of AVE, but in this case, some comparison may help people understand PR better.

To the extent the public, and corporate management may not understand the value of PR (I believe GM has a pretty good idea), that is a shortcoming of PR pros, but it doesnu00e2u0080u0099t mean we shouldnu00e2u0080u0099t do PR. I would have okayed this one, had it been my call.

Jim Bowman
ThePRDocu00c2u00ae

Not buying it. The board is worried about the reputation of the company, and ad equivalency obfuscates risk and impact. Getting ink is not the point - understanding and delivering on stakeholder expectations is. And there are unique expectations from American taxpayers for companies they bailed out. This wasn't a huge misstep, but perhaps a donation to a charity in the name of the player would have been a win-win.

As big company PR events go, this was a rather modest investment for the return it delivered. I doubt GM was concerned about strategic messages for a product whose name speaks volumes already.

The message I got was GM did something nice for a hometown guy, and got a lot of good publicity in the process. They tied into a story that will be around a lot longer than someone having pitched the third perfect game in 2010. They ought to invite Galarraga to the factory to meet the people who built it, or start a GM fan page for him.

I seem to have missed all the negative publicity. I've seen a few blog posts, and you can always count on politicians to weigh in to ride the same publicity wave, pro or con. I have done a few searches looking for negative publicity, but most of the talk seems to be among PR people. Let's not over-analyze this.

Jim Bowman
ThePRDocu00c2u00ae

Hi Jim, thanks for reading and commenting! Since this issue was featured in the NYT, it's not just a bunch of PR people trying to cause trouble. :) I do appreciate that we shouldn't over-analyze the situation, but it does provide a good learning opportunity.

Like you, I thought it was a nice gesture that led to a lot of positive media coverage. I was surprised to hear people question if this was a smart move because of the bailout and other concerns. Seems a couple politicians stirred the pot, which does get people -- and reporters -- talking.

I like your idea of inviting Galarraga to the factory! That would be a good way to extend the media placements and incorporate some more key messages. Good suggestion!

Interesting points - but I'm not convinced that boards do understanding advertising and rarely check its effectiveness (remember that old saying about half of advertising being a waste?). Based on my own experience in motor industry PR, it is likely this car deal was done by the marketing department - and after all, if it was about promotional opportunity, that's where it should be considered.

Within the auto industry there is acceptance of advertising and marketing PR as useful in selling cars - hence why this car would have been donated. That's where the advertising-equivalent measure is used to try to link the two - as both have similar aims. However, the real argument against such evaluation is that advertising isn't measured this way. That should be determined (and often isn't) in terms of recall, leads, sales, etc.

It is interesting that this donation has been challenged - but the issue is less about understanding PR than the company having failed to realise it would be controversial. Hence again why I think it may have been initiated by marketing. It is perfectly reasonable to ask why celebrities should be given cars, especially by firms that owe the public purse. PR professionals should have been aware of this likely outcome and been prepared to advise against, or mitigate the coverage that resulted.

Actually I'd like to see the evaluation that shows that this freebie has increased interest in the car, enquiries and orders. How many of those reading the article actually did question why the loan was being made rather than thinking about buying a car themselves?

Given all the buzz this story created for the Corvette brand, it would seem a reasonable use of marketing dollars. Tons of exposure for very little cost. Whether it will drive sales is anyone's guess. The market for a $50,000 sports cars is limited. It's not like the Vette is an unknown nameplate, and as Mary points out, there wasn't room for any "key messages" other than "Here's the keys, kid."

To James' point, the PR professional must anticipate the backlash, and it doesn't appear anyone did. I'm reminded of those execs who flew their corporate jets to the bankruptcy hearings in DC. Duh!

I don't follow sports all that closely, but I heard a lot about this game, since it came against my team, the Cleveland Indians. But until I saw your post, I did NOT know GM provided the car. I figured it was a sponsoring dealer group, or maybe a rich owner who knows the kids was robbed!

For most folks, this controversy is...well, it's inside baseball!

Interesting post Heather as always. I think you're correct that in this case the media attention about the car was positive and many people saw it. The quantity of messages is definitely a homerun.

However, what is most important was whether it met GM's PR objectives and whether the strategic messages about the Corvette were included in any of the coverage. Most messages I saw just said they gave a Corvette. I would imagine GM's plan includes more key words than the name of the car. So, I'm not sure the quality was a homerun.

Good points, Heather. However, be careful of limiting PR to just marketing/brand activities. In this case, if GM gets buzz for the Corvette, that's great for the sales and marketing team. But not great if at the expense of government relations/public affairs, manufacturer to dealer relations, b-to-b scrutiny, executive/boardroom scrutiny. (All of which should be under the influence of a strategic PR function.)

Besides -- is a promotion like this really an exemplary PR example? Does it gain attention (advertising's Nirvana)? Or does it build relationships (PRs Nirvana)?

Excellent points. Thanks for chiming in! :) As communicators, we need to explain why "buzz creating" opportunities like this are valuable -- assuming that they are. You're right in pointing that that just because you *can* do something that will generate a lot of media exposure doesn't mean you should. But, I'd say we shouldn't ignore high-visibility opportunities simply because it's one-to-many communication that won't necessarily create long-lasting, one-to-one relationships. Increased visibility can generate momentum that supports and strengthens other relationship-oriented PR tactics.

Whether this is considered a PR, marketing or advertising tactic, it still begs the question of why this is a bad way to use money, yet traditional television ads are a smart use of funds. Communicators need to be better about conveying the value of media relations (typically a PR function). I'd say $50K spent on this goodwill gesture was better than one $50K ad.

But was it a genuine goodwill gesture? I suppose that's at the crossroads of the analysis.

Keep up the good dialogue, here, Heather. Good blog.

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