How PR Chiefs Have Shifted Toward Center of Marketing Departments

Specialists Helm Ad Efforts too at Intuit, IBM, and American Airlines

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NEW YORK (AdAge.com) -- When a crisis hits, it's the in-house communications and PR specialists that take the lead in formulating a communications strategy. But with the rise of social media and the need for ultra-quick turnaround in creating and launching campaigns, could the day soon come when internal PR departments are steering the marketing ship full time?

Mark Stouse, global communications leader for BMC software
Mark Stouse, global communications leader for BMC software
In some organizations, chief communications officers (CCOs) and their teams are playing a strategic role more closely aligned with the marketing function. Some companies think the two -- advertising and communications -- are so closely linked that their CMO and CCO are one in the same. Jon Iwata, IBM's senior VP-marketing and communications, is the highest-profile example of this but there are others, such as Harry Pforzheimer, chief communications officer and marketing leader, at Intuit, and Roger Frizzell, VP-corporate communications and advertising, at American Airlines.

"I started on the PR side 34 years ago," said Mr. Pforzheimer, whose company produces TurboTax. "I have seen the [in-house] communications role evolve dramatically during that time from press release generator to where it is now, which is definitely at the center of things."

Growth driven by PR
Mr. Pforzheimer, who said Intuit's overall communications budget has continued to grow year over year, said most of the company's growth is actually driven by its PR function and its ability to quickly create and convey marketing messages.

"It's a little harder to measure but when you know that roughly eight out of 10 customers bought your product because of word-of-mouth that's a pretty powerful tool," Mr. Pforzheimer said, noting that Intuit's customers are also its best sales people. "So engaging with our customers directly is part of our DNA and communicating with customers on a timely basis is critical. And that timely basis now is instantaneous."

He said Intuit's communications effort, whether it be mainstream media, Twitter or blogs, reaches three to four times more people than its advertising does.

American's Mr. Frizzell said the airline's decision to bring both functions under one person was based on the idea that communications don't happen in a vacuum. He said the integration of the two, whether forced or natural, is happening for every marketer and it's due mainly to the advent and acceptance of social media and heightened social consciousness of Americans on environmental, governance and diversity issues. "When you're talking corporate reputation now you're talking marketing," Mr. Frizzell said. "As advertising budgets shrink and the economy gets tighter, you have to rethink your ad spend and PR can maximize that ad spend. In some cases it should compliment creative work and replace it in others."

When American launched its low-fare guarantee initiative a few years back, it was led by PR. The result, Mr. Frizzell said, was higher levels of awareness that grew quickly, and "millions of dollars saved" in ad expenditures.

Helps shape a marketing plan
Mark Stouse, global communications leader for BMC software, a business-to-business company, said BMC's PR function not only has more impact today on its marketing messages but on the direction of the company as well. He said it's the group's knowledge of what BMC's customers want that make it so vital and can help shape or trash a marketing plan.

"Tech companies tend to fall in love with the technology and develop campaigns about feeds and speeds and not the benefits," Mr. Stouse said. "This is not meant to be a ding on marketing but it's a matter of perspective. They look at it from a certain standpoint and we temper that by bringing a much different perspective." He said that he's not only altered campaigns at BMC but at previous employers like Compaq and HP as well.

Mr. Stouse said aside from the sales team, his group is one of the few out there on a daily basis "selling a company perspective." Selling that perspective to consumers and the media, he said, has always been important externally, but internally wasn't always acknowledged as part of the marketing puzzle by the gatekeepers. But that's changed, and with that change has come "a great deal of moral authority in the whole process of determining what the company is going to be about and talk about," he said.

Tony Cervone, senior VP-chief communications officer, United Airlines, said it's an overstatement to say communications can shape the direction of a company. But he does believe it's having a greater impact on a company's bottom line, giving the practice more credibility.

"Fundamentally, if you're doing a better job building relationships with consumers and if you believe that's part of the role of communications, it's not hard to imagine that's having a direct impact on the bottom-line performance," Mr. Cervone said.

Joining once-unequal disciplines

Three who have changed the definition of chief communications officer

ROGER FRIZZELL
VP-corporate communications and advertising at American Airlines

Mr. Frizzell, who oversees marketing and communications for one of the world's largest airlines, came aboard American six years ago at the start of what he calls the airline's "turnaround plan." He has overseen the creation of the "We know why you fly campaign" and communications strategy put in place to introduce and combat the negative coverage of the infamous $15 first-checked bag fee.


JON IWATA
Senior VP-marketing and communications at IBM

Mr. Iwata, a longtime IBM employee, joined the company's communications team back in 1984. He was made head of communications in 2002 and was appointed to his present role in July of last year. He oversees a marketing budget of nearly $450 million.


HARRY PFORZHEIMER
Chief communications officer and marketing leader at Intuit

Mr. Pforzheimer joined Intuit in 2004 as the chief communications officer and was made marketing leader three years later. And while he oversees a $100 million-plus ad budget, he said it's Intuit's communications that drive sales and generate mpressions. He said his role may not be a fit for all companies but those in that dual role will more likely be coming "out of the communications discipline."

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