Today, Shel Holtz brings us an insightful look at the sometimes misunderstood value of good PR:

"Earlier this month, I reported on coverage of a Kansas City councilwoman’s dismay that the city had spent $2 million on public relations. My point, based on my reading of the Kansas City Star article, was that the PR industry has done a lousy job of explaining its value. As a result, nobody is surprised when people like Councilwoman Becky Nace express outrage that civic funds would be invested in such a clearly worthless activity. The money, she suggests, could have been better spent elsewhere."

But without knowing all the facts about why the sum of $2M was spent on educating people about sewer systems, this may be a hasty conclusion. Per Shel:

"I first started thinking about cost-avoidance about eight years ago when I interviewed the manager of a website called Camisea.com (it’s long gone so don’t bother looking for it). The site was the effort of a consortium of energy and engineering companies that were exploring for natural gas reserves in the Camisea region of the Peruvian rainforest. Rather than offer spin and hype in support of the project, the site was an early example of pure transparency. It included the full text of the environmental impact report, a comprehensive archive of documents outlining the exploration plan, and even a forum where visitors to the site could voice their concerns. The site cost US $250,000, much of which was spent on paying independent experts to author sections of the site; for example, Smithsonian anthropologists penned the section dealiing with the people of the Camisea and the potential impact of the exploration on their way of life.

"A quarter of a million dollars may sound like a huge investment—particularly in 1997 or so—for a website. However, the dozen-and-a-half companies comprising the consortium were acutely aware of the investment companies like Mitsubishi had made in response to Rainforest Action Network activities that targeted them...hundreds of millions of dollars in Mitsubishi’s case. The quarter-million-dollar site was designed to make sure the Network had all the information it needed to determine that no action was necessary. In fact, the site creators asked the Network to partner with them to develop content that would address its constituent’s needs. As a direct result of the site, the Network took no action against the Camisea project (which was eventually abandoned as economically unviable).

"I don’t know what led the directors of Kansas City’s water agency to decide it was important to assemble panels with diverse memberships to meet frequently to decide which wastewater technologies were best suited to their neighborhoods; the following is purely hypothetical. But what if there already were rumblings of community-based lawsuits designed to oppose the project? What if the agency’s leaders had experience with local opposition? What would it have cost the city if work began, then was halted as citizens took the city to court? It is not unreasonable to assume that the costs of such action would far exceed the cost of working with an outside agency to build community consensus. Thus, it would not be unreasonable for the agency to invest half a million dollars in the consensus-building effort in order to avoid spending $20 million in legal and construction delay costs later."

Bingo.

"In a comment to John Wagner writes, “Doesn’t $2 million sound like an awful lot of money to educate people about sewers??” But clearly the effort went beyond education and into the realm of negotiation and consensus-building. (This was just one project, by the way; the total $2 million was paid to four agencies for a variety of projects.)">another blog, Wagner writes, “Doesn’t $2 million sound like an awful lot of money to educate people about sewers??” But clearly the effort went beyond education and into the realm of negotiation and consensus-building. (This was just one project, by the way; the total $2 million was paid to four agencies for a variety of projects.)

"Institutions need to understand the potential damage that can occur when they fail to engage in two-way communication and determine what it’s worth to do the work upfront. Half a million dollars—assuming the agency’s billings reflect legitimate and necessary work that produced the desired results—could be a real bargain if it saves $20 million down the road."

You know what? I don't even need to comment on this post... Except to say that whenever you fail to build (or sell) value, you're just dead in the water.

Also worth your attention today:

The BrandBuilder Blog, Brand Autopsy, Johnnie Moore's Weblog, Being Reasonable, Crossroads Dispatches, and Mary's Blog.

Have a great Thursday, everyone. :)