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Public Relations: Free Publicity or Too Much Trouble

Can you afford to cut your PR budget?

Public relations advances your message and upholds your brand, even in the worst of times. Here’s how to streamline your communications budget and still maintain a conversation with customers, investors, shareholders and employees.

“There’s no such thing as bad publicity except your own obituary.”
—Playwright Brendan Behan

It’s an old truism of the communications business: “No news is bad news.” “It doesn’t matter what they say, as long as they spell your name right.”

But in the midst of recession, when the obituary they’re writing has your casino’s name on it, it’s essential to keep the lines of positive communication open not only with the press and public, but also with your team members and shareholders. And that cart is pulled not just by advertising but by thoughtful and strategic public relations.

Tempting as it may be in an economic downturn, trimming too much on the PR end is tantamount to muting your message, and leaving your story for someone else to interpret.

Unlike paid advertising, a message dispatched through the public relations department comes with no guarantees. The target audience—which usually starts with the news media—can accept it, ignore it, or worse, turn a benign or positive memo into a negative.

But when it works, PR can earn free press and third-party endorsements that are worth far more than advertising. During a recessionary period, says PR expert Mike Paul, corporations and service providers “must invest in telling their stories and explain why they’re better than their competitors, or they will not survive. Public relations is the best way to grow their brands with all of their key audiences.”

Plus, it’s cheaper.

Public relations “is more a way of thinking and executing ideas than it is a cost analysis,” says Ira David Sternberg, vice president of communications and community relations for the Las Vegas Hilton. “Advertising has a certain budget; you’re buying x number of publications and y number of TV spots.

“PR, in this electronic age, is more a distribution network, which is not a major cost factor. The good PR person is capable of being very creative in trying times to get the word out about your company at a cost-effective level.”

In addition to being tech-ready—able to flow information through ever-evolving social networks including blogs, Facebook pages and Twitter—the PR team safeguards a property’s reputation and brand in good times and bad, develops relationships of trust with the news media, is accessible during crises, and avoids spin.

“You have to be direct,” says Sternberg. “The media has to know you’re not going to misrepresent a situation or mislead them in any way; they have to know you’re going to tell them the straight stuff. I always return phone calls, on weekends or even at two in the morning in an emergency, and though I may not necessarily release all the information about a particular event, I will release the parts that are necessary for the story. And I have no compunction about telling reporters we don’t have all the information yet.”

Fighting the Negatives
As vice president of public affairs for Harrah’s Atlantic City, Alyce Parker has dealt with her share of PR tests in the past year: not only the recession and sagging revenues but layoffs and the fallout from a short-lived smoking ban in the city.

Then there’s the company’s union problem. Harrah’s has endured months of negative publicity about its ongoing dispute with the United Auto Workers union. The parties have not yet negotiated a contract with two Harrah’s properties, Bally’s and Caesars in Atlantic City.

The UAW, which won the right to represent casino dealers in 2007, has launched a multimillion-dollar ad campaign slamming Harrah’s for allegedly cutting hours and health care for its rank-and-file while boosting compensation for its CEO, and allegedly refusing to bargain in good faith.

In addition to print, TV and radio ads, as summer approaches the ubiquitous message is also being carried in the skies above Atlantic City’s famous beach and Boardwalk, with banner planes that bear the slogan: “Everybody loses when workers are treated unfairly.”

Only recently has Harrah’s chosen to respond with ads of its own, along with widely disseminated press releases saying company officials have tried more than 50 times without success to reach a contract that is “reasonable, economically feasible and allows us to remain competitive in these difficult times.”

Harrah’s message is intended not just for the public at large but for customers, regulators and “our team members—12,000 alone in Atlantic City,” says Parker.

She agrees that the goal of public relations is not to slap a good face on a negative story, but to “tell the truth, and advance the message from the company’s perspective.”

To that end, Harrah’s PR strategy includes open forums on local radio talk shows that allow people to call in to share complaints or kudos with company general managers.

“The communication process has to be in place all the time, but in times like these, we step it up even more,” says Parker. “It affects all our businesses, and the livelihoods of our team members and vendors.”

Highlighting the Positives
Of course, PR is far more than putting out fires. It’s also generating good buzz through special events and good works, and supplying hungry editors with a steady diet of information about entertainment, dining specials, celebrity appearances and the like. 

Sternberg regularly sends out a “Hilton hot sheet” to a mix of media, “seven to 12 items that could be about anything from food and beverage to employees to gaming to the hotel division,” he says. “The idea is to provide story ideas—hey, here’s what’s going on—for column items or blogs or TV spots.”

Parker is also always on the lookout for unabashed “feel-good” events that polish the Harrah’s image. Free summer concerts at the company’s historic Dennis Hotel on the Atlantic City Boardwalk have garnered lots of free complimentary coverage, as have a host of volunteer projects and in-kind donations to community organizations. And don’t forget puppy power. A recent dog contest on the Boardwalk raised hundreds of dollars for a local humane shelter, drew a big crowd, and raised employee morale all at the same time.

“It made our team members feel good,” says Parker. “They loved it.”

Unfortunately, good intentions can be upended by reporters on the prowl for bad news. In April, a PR flap resulted when the president of the Casino Association of New Jersey wrote that casino workers should “politely change the subject” if patrons begin to talk about the recession.

“Our customers come here to escape,” wrote Joe Corbo of the CANJ, whose subject in the column was how casino workers can provide a superior experience. “If we engage them in discussion about the economy—or even worse, our personal circumstances—we’re reminding them of the very things they’re trying to forget.”

In news outlets across the country, Corbo’s advice was portrayed as muzzling employees and denying the awful truth about the economy. The story ended up in the Wall Street Journal and on CBS News, and Corbo had to add that no “threats or punishment” would be handed out to casino workers who did, in fact, discuss the recession with customers.

One New Jersey newspaper group went so far as to post the headline: “They don’t want you to talk about it—but we do!”

That’s the inherent risk of public, media and corporate relations—the original positive intent can be grossly misconstrued. Parker, for one, thinks the message was right on target.

“Our customers want to have fun, enjoy their disposable income, have a nice dinner and go see a great show,” she says. “Joe Corbo laid it out very well when he said, ‘Let’s stop talking about the negative.’”

When it comes to news organizations that look for the down side, says Sternberg, it’s important to stay on-message.

“It’s human nature; some people just want to approach it that way,” he says. “The only thing you can do is present the facts and follow up if there’s an error in the story.”

Stacy Hamilton, director of public relations for SK+G Advertising in Las Vegas, defines good PR as “managing the protection of the brand, and working through media outlets to tell the story of that brand.”

Hamilton says smart businesspeople are finding the best PR “stories” in the worst of times.

“Anyone with a pulse or who reads a newspaper understands that times are tough, and casinos and resorts are competing for customers like never before. Casinos are appealing to a wider range of guests than ever before, with lower rates and prix-fixe menus and discounts where you can get a four-or-five-star experience without breaking the bank.

“From a PR perspective, it’s created an exciting new story for us to tell—‘Hey, we understand what’s going on in the world, and we’re reacting to it.’”

Though the temptation in tough times is to slash all marketing costs not tied to direct sales, it’s when no one else is marketing that your message stands out to consumers. The job is made easier and more cost-effective through the explosion of online communities, social media and viral PR, which in some cases are virtually cost-free. But that’s no invitation to deep-six the baseline PR budget.

“Realistically, when executives look at their budget and try to cut out non-essentials, some make the mistake of thinking marketing, PR and advertising are not essential. But to stay ahead of the competition and stay top-of-mind with your guests or customers, you have to continue to implement your strategy.

“If you abandon your marketing efforts,” says Hamilton, “it will take months to ramp up when things improve and people have extra money. The people who might have spent money with you have already gone to your competition.”

Or in the words of Ken Chenault, CEO of American Express, “In tough times, your instinct is to hold back. But that’s the time to be aggressive and on the balls of your feet.”

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