News from Vollrath Associates

For the best way to enjoy this newsletter, we suggest printing a copy, reading it outside while surrounded by the beautiful weekend weather and finally, recycling it in the spirit of Earth Day!

Public Relations More Powerful than Advertising in Building Brand Value

A new study released in March 2009 by Text 100 Global Public Relations provides evidence that public relations may in fact be more important than advertising to brand value.

The study found that, on average, 27% of brand value is tied to how often the brand name appears in press, and this percentage is even higher for companies selling more complex products like electronics, financial services or automobiles. In other words, the more research a consumer does before purchasing a product, the more important PR is.

Using PR as an effective brand-building strategy also gained additional credibility thanks to a recent study by Procter & Gamble. The company announced it found that:

PR drives sales, often on par with advertising.
PR delivers stellar ROI (275%), much greater than advertising.

What's the moral of the story here? When used strategically, public relations provides a halo effect over a company's other marketing tactics, and can especially provide value-driven returns during times of tight budgets.

Adapted from the article "The Rationale for Hiring a Public Relations Firm (Especially Now), Part 1" by Kathy Cripps in Firm Voice, March 25, 2009, and the article "Public Relations More Powerful than Advertising in Building Brand Value" by Angelique Rewers' ezine "The Corporate Communicator," March 23, 2009.

Search Engine Optimization Can Play a Key Role in Brand Awareness on the Web

As the number of consumers seeking information online has grown, ensuring that client companies sit at the top of search engine listings has become an integral part of a core PR strategy. As concluded by Wired magazine, "Google is not a search engine, but a reputation management system."

For this reason, agencies, including Vollrath Associates, are incorporating search engine optimization (SEO) key words into the base lines of many PR materials, including press releases, media advisories and Twitter postings. In doing this, other Web sites, blogs or social media feeds are more likely to locate and link to these PR materials as sources, and credible links can greatly add to a brand's SEO.

However, many marketers agree, clearly telling a brand's story should always trump the use of popular key words, as the only way to be discovered by a search engine is great content. The most important factor in optimizing a company's search engine placement, then, is the quality of the organization's Web site. Hence, in order to bolster a brand's SEO, Web developers must create sites that search engines can find easily, as well as content that consumers will find interesting.

Adapted from the article "SEO Can Play a Key Role in Brand Awareness on the Web" by Nicole Zerillo in PRWEEK, February 9, 2009, and the article "The Rationale for Hiring a Public Relations Firm (Especially Now), Part 1" by Kathy Cripps in Firm Voice, March 25, 2009.

Insights into the Frequency of Earnings Guidance

With the markets in something akin to unprecedented disarray, investors are paying more attention to guidance as they seek as much insight as possible in evaluating public companies.

IR practitioners certainly recognize this demand, and guidance is now a standard operating practice for literally nine out of ten U.S. firms. Furthermore, a national survey completed last fall among IROs in the United States indicates that a general consensus appears to be forming with respect to an ideal guidance frequency.

The survey concluded that only 34% of companies give explicit quarterly guidance, with the majority of firms (56%) opting instead for annual guidance with quarterly updates. A remaining 7% chose to issue guidance only once annually.

Many survey participants, however, indicated a sizable degree of flexibility exists in their guidance practices. Various IROs practicing solely annual guidance stated they review their companies' financial status quarterly and issue updates as needed, whereas others opt to update only if market events cause significant changes in outlook. Finally, with an eye on ensuring that credibility does not take undue blows, ranges - as opposed to explicit number targets - are gaining in popularity when financial goals are shared with investment professionals.

Adopted from the article "Insight into the Frequency of Guidance" by Jim Peebles and Brian Rivel of Rivel Research Group for Investor Relations update, February, 2009 Edition.

Quote of the Month

"Man's mind, once stretched by a new idea, never regains its original dimensions."

~Oliver Wendell Holmes, Jr.

Phil Vollrath: It's Not All Gloom and Doom

It may not be all gloom and doom in some sectors of our economy anymore. For example, at the Rotary Club of Milwaukee on April 22, Gov. Doyle announced that stimulus funds coming to Milwaukee will fund a high speed rail network that may connect Milwaukee and Madison with Chicago, the Twin Cities, St. Louis, Detroit and eventually Green Bay, with train speeds in excess of 100 mph. He also said this travel would be efficient, comfortable and safe.

Also, some restaurants are filling with guests again, distributors are stocking for expected orders, investors are buying in some markets, we are witnessing a media/communication explosion and the Brewers are on the march. There is a faint glow again from the light at the end of the tunnel. We believe that now is the time, as summer begins, to market and create awareness for your product, service or brand. Leading the advance, even cautiously, will bring far greater rewards than following it. Vollrath Associates would be glad to help!

Sincerely,

Phil Vollrath
Vollrath Associates