Marketing, PR and Integrated Reporting

Terminology is important. To clarify concepts behind important terms was always a passion for me. There are so many conceptual blunders especially in so-called social sciences to be found in the past and nowadays and there is abundance of them in management and in communications. For that reason I jumped with high expectations on an article tweeted by @JulianaRuizCobo about The Real Difference between Marketing, PR, Branding and Advertising. Unfortunately the author failed to understand what PR is in relation to marketing for the reason that she does not understand what public relations really is.

But before explaining some basic facts PR and marketing, let me stress that correct notion of mentioned practices is not only important for practitioners and theoreticians of marketing, branding, public relations and advertising, but for all of us that are involved in questions of management, corporate governance, and corporate reporting. Wrong notion of mentioned practices leads to fatal mistakes on all other management levels. I will try to clarify this by the end of this post.

Marketing is not umbrella practice!

Let me first make clear why marketing is not umbrella under which public relations operate. Marketing and PR are two related practices but hierarchically on the same level. Neither is PR subordinated to marketing nor is marketing subordinated to PR.

To separate and understand PR and marketing is fairly easy. Public relations deal with publics while marketing deals with markets (as the name tells). There is huge difference between publics and markets. Publics exchange non-material values with companies (and companies exchange same values with publics) while markets exchange money for goods and services provided by companies. Both value chains are important, but mechanisms behind them, motivations, personal drivers and all other elements that define behaviour of individuals and companies in respective situations are utterly different.

Being a market vs. being a public

I behave differently when I am in a position of a market for specific consumer company then when that same company pushes me into a position of a civil society that fights against new plant planned to be built in my neighbourhood. I arrange my relations with that company as a market easily with money. When I buy a product, I fully consume such (market) relation. That I can complain if I am not satisfied as consumer is nothing in comparison to my decision that I will cease to exist as a market for such company. In former case value chain still exists, in later it breaks.

On the other hand value chains of me towards such company on the level of issues (public relations) cannot be normally settled by money. I cannot cease to exist as a public towards a company that builds new premises in my neighbourhood. Issue remains as long as we both exist. A company can perhaps adjust discrepancy in value chain towards me with financial compensation, but such compensation does not consume my relation towards such company. It only makes it more bearable for me. Public relations value chains persist, issues persist.

As we have seen value chain formations are utterly different on marketing level than those on public relations level. For that reason practices that manage marketing and public relations are utterly different and not subordinated one to another.

Publicity and public relations

It is now more that 20 years that I encounter explained misunderstanding of public relations in almost the same form. Why this mistake persists so long? The explanation can be found in that same article that I am referring to. Not only that lay audience does not differentiate between publicity and public relations but also many practitioners and theoreticians as well. Publicity is a practice that can also be understood as media relations. And since both public relations and marketing sometimes use media as a communication channel that allows both practices to communicate with targeted publics or markets, and since term “publicity” associate with publics, it is not surprise that over time the true nature of public relations was forgotten and replaced by publicity. And as publicity is often a tool for marketing, whole domain of abridged public relations in the form of publicity came under marketing umbrella. That is why professional public relations never talk about publicity, but always about media relations. PR does not want to sell anything, but to establish environment for constructive value chains between a company and its publics.

The role of branding

What is true though is, that brand connects and interrelates marketing, public relations and all other management practices. Each brand element in Standard branding model can be seen as responsible for one or another practice almost like each gene in genome is responsible for different body functions or organs. (Please note my simplification: as much as we cannot locate gene functions in such a linear explanations also brand elements should not be understood as direct masters of distinctive management functions. Relations are much more complex both in genome and in brand.) For instance we know that Vision part of brand formula is more oriented towards markets and Mission part more towards publics, distinction that I have fully elaborated in Brandlife.

Publics and Integrated Reporting (IR)

There are many instances in management when one can see importance of explained distinctions. I will only refer to one of them: reporting in the form of integrated reporting. Integrated reporting as a fairly new reporting concept intends to integrate financial capital with five other capitals. Three of such capitals that have to be managed, communicated and reported are human capital, intellectual capital and social capital. Value chains that form mentioned capitals do not rest on markets but predominantly on publics. A company that does not have proper public relations practice in place including all necessary mental models that presuppose adequate public relations practice do not form proper value chains for those capitals, cannot report about them and cannot build their value to optimal degree.

Andrej Drapal