Why brands should lead with public relations

0:00Jason Mudd: What if marketers have the order backward? A company launches a new product, service, or an entirely new business. And one of the first questions is, what's our advertising budget? Some of the world's most recognizable brands took a different approach. They earned attention before they bought it. And now generative AI platforms are giving marketing leaders another reason to reconsider the order. Muckrack analyzed more than 25 million links cited by ChatGBT, Gemini, and Claude. Its research found that 84 % come from earned media. Paid and advertorial content? Just 0.3%. So if you're responsible for your company's visibility, reputation, and growth, there's an important lesson here.

0:45Jason Mudd: Lead with PR. Then use advertising to amplify what PR helped build. Welcome to On Top of PR with Jason Mudd.

0:59Jason Mudd: Welcome to On Top of PR. I'm your host, Jason Mudd, CEO of Axia Public Relations. This episode is part of our series on the business impact of public relations. And today we're talking about something marketers sometimes get backwards. Let me be clear, I'm not anti-advertising. I actually studied advertising while at the Missouri School of Journalism. Advertising can give you tremendous reach, repetition, and scale. But advertising and public relations do different jobs. And I believe the order matters. Let's look at three companies that prove it. Today, Starbucks is one of the world's most recognized brands.

1:37Jason Mudd: But advertising didn't build Starbucks. Howard Schultz has said it plainly. Starbucks is not an advertiser. People think we're a great marketing company, but in fact, we spend very little money on marketing and more money on training our people than advertising. Think about that. Starbucks was growing. Its brand was becoming part of American culture. But instead of relying on advertising to create the brand, Starbucks invested in the experience that gave people something worth talking about. The stores were different. The product was different. Even the language was different, which I still don't understand.

2:14Jason Mudd: Suddenly, people ordering a tall latte instead of a medium coffee. That created conversation. Conversation created word of mouth. Word of mouth created awareness. And media coverage helped amplify the story. Eventually, Starbucks began advertising. And that's perfectly consistent with the point I'm making. The lesson isn't don't advertise. It's don't automatically start there. If you have something new, different, or disruptive, you have something advertising can't buy. You have news value. Use it. Lead with PR. Our second example may be even more remarkable. Tesla became one of the world's best-known automotive brands while spending relatively little on traditional advertising.

3:05Jason Mudd: And we don't have to speculate about what drove its early visibility. Tesla told investors in its SEC filings, Tesla said media coverage and word of mouth were the primary drivers of its sales leads and helped the company achieve sales without traditional advertising at a relatively low marketing cost. That's coming directly from the company. Think about what Tesla had going for it from a PR perspective. It wasn't introducing another sedan. It was challenging an entire category. Could an electric vehicle be desirable? Could it be quick? Could it compete with luxury automotives? Could electric vehicles become mainstream?

3:48Jason Mudd: Those are stories. Tesla gave journalists, consumers, automotive enthusiasts, investors, and critics something to talk about. And they did. In 2019, Tesla delivered approximately 367 ,500 vehicles, a 50 % increase from the previous year while still operating without traditional advertising. Tesla advertises today. Again, that's not a contradiction. It's the progression. Earn attention, establish the brand, and then add paid media when it helps you reach the next business objective. That's leading with PR. Our third example goes back much further, and I love this story because Pepperidge Farm started with a mother trying to solve a problem for her family.

4:36Jason Mudd: Margaret Rudkin began baking bread at her family's Connecticut farm after her son developed food allergies. She started experimenting with bread made from high-quality ingredients. People liked it. Neighbors encouraged her to sell it. She brought a small number of loaves to a local grocer. They sold. The grocer wanted more. And a business started growing. But here's the part that matters for our conversation. Pepperidge Farm didn't initially grow by pouring money into advertising. Publicity and word of mouth helped build the brand. Her PR counselor, Ben Sonnenberg, is credited with taking Petridge Farm from a small Connecticut bakery onto the nation's supermarket shelves.

5:24Jason Mudd: And he's the one who got Reader's Digest to run Bread Deluxe, telling Margaret's story to a national audience. The response was enormous. Letters poured in and orders increased dramatically. Pepperidge Farm had discovered something powerful. A compelling story told by a credible third party could create demand that advertising didn't have to manufacture. Now, I want to be clear with the history here. Pepperidge Farm eventually advertised, and Margaret herself later appeared in television commercials. But advertising wasn't the engine that initially launched the business. Word of mouth and publicity built the demand.

6:05Jason Mudd: By 1960, Pepperidge Farm had grown into a$32 million business. Campbell Soup then agreed to acquire it at a stock deal worth about$28 million. Think about that progression. Make something remarkable, get people talking about it, earn attention, build demand, scale the business. Then advertising can help amplify what's already happening. This isn't just three isolated examples. Starbucks, Tesla, and Pepperidge Farm aren't the only companies that followed some version of this playbook. Al and Laura Reese documented numerous examples in their book, The Fall of Advertising and The Rise of PR. They pointed to brands including Starbucks, The Body Shop, Walmart, Red Bull, Zara.

6:54Jason Mudd: We've already talked in this series about Maker's Mark and how national media exposure helped transform awareness and demand for a bourbon that had been little known outside of Kentucky. There are other examples, too. The point isn't that every one of these companies followed an identical strategy. They didn't. and it would be a mistake to credit PR alone for their success. They had good products. They differentiated themselves. They created experiences people wanted. They built businesses and companies worth talking about. PR helped other people do the talking. That's the distinction. Let me tell you about the book I felt like I should have written.

7:37Jason Mudd: When I first read The Fall of Advertising and The Rise of PR, I remember thinking I should have written this book. not because I thought I could write it better. I just agreed so strongly with its premise. I studied advertising at the Missouri School of Journalism and I reached many of the same conclusions. Advertising is powerful, but if you're launching something genuinely new or different, why would you immediately start by paying people to talk about it? First, give journalists and influencers a chance to discover it. Give people a reason to talk about it. Give the market a chance to validate it.

8:16Jason Mudd: Earn credibility before you start buying research. I actually interviewed Laura on this podcast and we discussed this exact topic. I told her our team regularly guides clients to lead with PR, then advertise once they've maximized the initial PR opportunity for each new product launch or company announcement. Her response gets at the heart of the strategy. News has to be new. If you launch a major advertising campaign first and then approach a journalist with the same product, what's the story? Their audience might already know about it. You've potentially spent some of your news value, and that's why sequence matters.

8:55Jason Mudd: We'll link to the full conversation with Laura in the show notes so you can check out that episode, which I highly recommend you do. So where does advertising fit? Advertising absolutely belongs in the strategy, but give it the job it's good at. PR can help establish awareness and credibility around something new. Advertising can then amplify that message. Repeat it, scale it, reach audiences you haven't reached organically, and meanwhile, PR shouldn't stop. That's actually another misconception. This isn't PR first, PR starts, advertising starts. A strong PR program compounds over time. Every credible article, every interview, every third-party mention, every expert quote, every positive story, every trusted source that talks about your company adds another piece to the reputation you're building.

9:49Jason Mudd: And today, there's another audience consuming all of that information. Artificial intelligence. AI changes the equation. This is where an old marketing principle suddenly becomes incredibly current. When someone asks ChatGBT, Gemini, or Claude, what's the best company for this? What product should I consider? Who are the experts on this topic? Which brand should I trust? Genitive AI platforms need information to formulate those answers. And your website isn't the only place they're looking. In fact, increasingly, what other credible sources say about you matters. That's why muckrack research I mentioned earlier caught my attention.

10:32Jason Mudd: Across more than 25 million links cited by major generative AI platforms, Muckrack found earned media accounted for 84%. Paid and advertorial content counted for only 0.3%. Now that doesn't mean you shouldn't take every advertising dollar and move it into PR. That's not my recommendation. It means you should understand what each discipline does and what it does well. If you're investing heavily in paid visibility while neglecting the independent sources that consumers and generative AI platforms use to understand your brand, you may have the sequence backwards. The principles behind leading with PR aren't becoming obsolete.

11:21Jason Mudd: Generative AI may be making them more important. So what should you do differently? The next time your company or organization launches something important, don't make your first question, how are we going to advertise this? Start with three questions. One, what's the story? Two, why should anyone care? And three, why would someone other than us want to talk about it? If you've got strong answers, give PR room to build momentum. Then amplify that momentum with advertising. and keep building earned visibility long after the launch. Because the objective isn't media coverage. It's not advertising impressions either.

12:05Jason Mudd: The objective is business impact, awareness, credibility, demand, growth, and now visibility in the answers people receive from generative AI platforms. Starbucks did it before today's AI existed. Tesla demonstrated it in an entirely different industry. Pepperidge Farm demonstrated it generations earlier. Different companies, different eras, same fundamental principle. You don't always have to buy attention first. Sometimes the better strategy is to earn it. Lead with PR, then amplify what you've learned. I'm Jason Mugg. Thanks for tuning in to On Top of PR. If you found On Top of PR useful, leaving online review is one of the simplest ways to support our show.

12:54Jason Mudd: Reviews help more people discover us, which helps us grow and ultimately helps us bring you top guests with useful insight. As a thank you, we run a monthly drawing. It includes podcast swag and an occasionally a special gift for me. Here's how you enter. Go to rate this podcast.com slash on top of PR rate, thispodcast.com slash on top of PR. Once you do that, screenshot your review and send it to us at podcast at axiapr.com. We ask you to submit a copy of your review because we don't necessarily know who Jay Bird in Toronto 69 is, but we'd love to thank him or her for their review when we draw their review.

13:41Jason Mudd: Once you enter, you stay in the drawing until you win. So one review goes a long way. It takes about two minutes. You're entered and your name could probably be the next one we call out. Thank you for taking a moment to help us. We appreciate you. Be well. This has been On Top of PR with Jason Mudd presented by ReviewMaxer. Be sure to subscribe so you don't miss an episode and check out past shows at ontopofpr.com.

14:24Thank you.

14:46I'll see you next week.