Where CEO mentions in press releases get you
I have been meaning to write about some compelling research that came out of Stanford University’s Graduate School of Business by Elizabeth Blankespoor and Ed deHaan. The title of their research captures the question they explored which is—CEO Visibility: Are Media Stars Born or Made? From my perch, it is never about making your CEO a media star but how do you get your company’s story out there in this information-rich world and how can you give an unknown, untested new CEO a good start so that some attention is paid to them for the right reasons? Most CEOs I know would agree with me that they want to build credibility and not celebrity. A rare few want to be rock stars (excluding Donald Trump). In fact, one of the more interesting findings from our own research on CEO reputations is that CEO humility is the way to go these days.
The researchers analyzed nearly 600,000 press releases issued by S&P 1500 firms from 2003 through 2013 and then examined articles written about the companies within 48 hours post-release. Blankespoor and deHaan examined whether the CEO was named in the release or not, if he or she was quoted and whether a particularly vivid quote from the CEO was embedded in the release. What did they find?
- CEO mentions are not necessarily common practice by the majority of companies. Approximately one-third of the press releases examined in the study mentioned the CEO by name and about one-quarter contained a CEO quote. Also an indication that companies are not CEO-obsessed.
- The payoffs: promoting the CEO in a press release has positive returns in terms of media coverage. Press releases that promote good news, important news and cover information about what CEOs do in their early tenures are more likely to be covered.
Nearly 18% of media articles following in two days after the release name the CEO and approximately 12% include the CEO quote. Thus naming the CEO in a press release increases the likelihood that a reporter will mention the executive nearly 13%. Using a quote in the press release will increase the likelihood that the reporter will include it 12% and if it is a particularly lively quote, the increase in mention likelihood jumps to nearly 18%.
In short, the researchers conclude: “…we find that CEO promotion in press releases is positively associated with the likelihood of media coverage of the CEO.” One of the reasons that CEOs are mentioned is that journalists can use the information and quotes in an article without having to go to the trouble of reaching the firms’ PR professionals and getting an attribution. They save time and can focus on other stories when the release helps them do their jobs.
They also found that CEO quotes that find themselves in subsequent articles are associated with more positive media coverage in general which is what the firm ultimately wants. Interestingly and definitely worth noting, there can be too much promotion of a CEO in releases and that “abnormally high levels of CEO promotion” can backfire in terms of shareholder’s interests. Therefore, there needs to be a careful balancing of the right level of CEO visibility and that has always been the case.
But as the researchers conclude, “Overall, these results indicate that firms and/or CEOs can effectively influence their media visibility, although doing so is not always in shareholders’ interests. In sum, we find that CEO visibility is not entirely born from operating performance, but is rather, at least partly, made by managing the press.” A case for being smart and strategic about what goes into a press release when it comes to CEOs.