Posts

What is Public Relations?

/in , , /by

As part of our “back-to-basics” blog series on the foundational tenants of our business, we are dedicating this post to public relations. 

Many people have heard of public relations, but not everyone truly understands what it involves. A common perception is that public relations is simply about interacting with the public. While there’s some truth to this, the reality is much more nuanced.

A useful analogy can help with clarification: In advertising, the emphasis is on self-promotion, where the subject speaks for itself. In contrast, public relations involves third parties objectively communicating on behalf of the subject.

Public relations, or PR for short, is a form of mass communications used to engage with different types of audiences, including consumers, customers, employees, investors and lawmakers, among many other stakeholders. Specialized disciplines such as investor relations, crisis communications, government and employee relations all make use of public relations tools and tactics.

PR may be utilized to inform, persuade, highlight a particular point-of-view or prompt a call to action. It could be about a specific product, company, service or issue. Typically, an organization will engage a public relations firm to create and implement a program aimed at influencing one or several key stakeholder groups. For publicly traded companies, for example, a robust PR strategy can help increase awareness and visibility among investors, who look to third-party messaging to help inform their investing decisions.

At its core, public relations involves creating awareness between a brand or organization and its key audiences through carefully crafted messaging. These messages, often referred to as “talking points,” answer the essential question: What are the main points we want to communicate to these audiences?

The next step is determining how and where these messages are delivered. Talking points are transformed into various types of content, which are then distributed across a wide range of mass and specialized media, including news outlets, industry publications, digital and social media, broadcast channels, and more.

A fundamental objective in PR is how best to reach target groups where they work and live. Until the Internet, TV and newspapers were very influential, and still are to some degree. However, reaching targeted audiences in today’s Web-based world has become increasingly complex.

That’s why PR often is considered more of an art than a science. Crafting content that resonates with people and makes a real impact requires a great deal of critical thought and creativity within legal and regulatory confines, of course. Press releases, videos, newsletters, social media posts, podcasts and op-eds are just a few of the many essential tools used to inform and engage key stakeholders.

Whether it’s encouraging consumers to buy a product or investors to buy or hold a stock, or positioning a CEO as an industry expert, the ultimate goal of public relations remains the same: to help effect change and action, and to communicate with people in meaningful and transparent ways. That’s what public relations is all about.

George Medici, gmedici@pondel.com

What is Investor Relations? 

/in , , /by

As part of our “back-to-basics” blog series on the basic tenants of our business, we’re going to dedicate this post to investor relations.  

It is important to note that the number of investor relations firms, even in major financial markets, such as New York, Los Angeles, Chicago and San Francisco, is relatively small. That’s probably why when we’re at events or gatherings outside of our industry, we’re often asked, “What exactly is investor relations?” 

Let’s keep it simple: Investor relations, or IR for short, is a communications specialty that focuses on helping publicly traded companies get their stories out to Wall Street, including shareholders, potential investors and the broader financial community. Another term sometimes used to describe investor relations is financial public relations.

Public companies come in all sizes, usually determined by market capitalization, which is a company’s total stock value in the public marketplace on any given day. Stocks can be traded in the U.S. ­on Nasdaq, the New York Stock Exchange (NYSE), the OTC Markets, or on foreign exchanges such as the Toronto Stock Exchange (TSX), London Stock Exchange (LSE) and Frankfurt Stock Exchange (FRA), among many others. 

While public companies are highly diverse in what they do, all of them are regulated by governing agencies, depending on where their stock is traded. In the U.S., for example, the main governing body is the Securities and Exchange Commission (SEC), which requires, among other things, that all public companies follow a set of rules and regulations that ensure free and fair disclosure to everyone.

Compliance with these SEC rules is complex for those who are not in the know. Most public companies rely on investor relations professionals, whether in-house or externally, in addition to SEC attorneys, to assure compliance and language that is understandable. The main job of the IR professional is to help the public company communicate clearly and transparently, and in keeping with the law.

Investor relations encompasses many facets, such as disseminating financial information via traditional and social media; responding to investor inquiries; identifying prospective investors and research opportunities; organizing informational and required annual meetings; preparing investor presentations; and more.

Bottom line, the investor relations function is to manage the communications between a public company and investors, while at the same time being cognizant of other audiences – including employees, customers and suppliers – that may be recipients of the information.

The ultimate goal of IR is to deliver a cohesive and compelling message that resonates with investors, ultimately to help build shareholder value that is consistent with a company’s performance, progress, prospects and peers.

George Medici, gmedici@pondel.com