A couple of months ago I was asked to write a document about PR 2.0 for a private individual looking to invest in an agency and get a foothold in social media PR. As the investor has now made their move one of the backgrounder documents can now go public. Incidentally the investor has also put significant funds into agricultural land/farms and farm machinery manufacturers (they see climate change, increase demand for food and need for bio-fuels from crops as key drivers over the next 5 - 10 years).
This is an extract from the overview document.
New market dynamics – new style PR agency
Overview
In the last few years a number of factors have converged to create the conditions for a massive change in consumer communication and purchase behaviour driven by digital technology. These are:
- The availability of cheap online storage
- More powerful and lower cost PCs and other digital devices
- Quicker broadband connections
- Easier to use web based software application solutions
PCs, software and personal digital devices (smart phones, MP3 and video enabled devices) are no longer regarded as purely ‘geek or youth’ technologies but have become an everyday consumer product used by the broad mass of the population.
These factors will in turn impact the way that companies can (and will have to) engage, build and develop relationships with these new digital enabled consumers.
The emergence of the PC as a business tool in the mid-1980s means that it is only those aged 65+ who missed some exposure to the digital revolution and many of those have been engaged through special Government initiatives plus their children and grandchildren. Last year Saga1 started its own social networking site aimed specifically at the 50+ age group. Recent figures suggest it has already attracted 30k+ members.
It should be noted that Ofcom2 research has shown that 22% of all social networking site members – Facebook, MySpace etc - are aged over 50. Research by Hitwise2b showed that ‘silver surfers’ (aged 55+) now make up a large percentage of people online. With an aging population it will mean that the 55+ group will soon be the largest online group. Whilst they may well be less active online than younger people in terms of hours spent online they do have greater disposable income.
The Ofcom2 report showed that an ever more savvy cyber-enabled youth has emerged. 49% of 8 to 17 year olds have profiles on a social media site. Another Ofcom3 report shows over 50% of 8 – 15 year olds now own mobile phones and over 1/3 of all calls made in the UK are via mobile phones. Over 20% of people with mobile phones have taken and sent pictures to friends or loaded them on social networking sites. The use of video on mobile phones is also increasing rapidly as is the consumption of online video. In December 2007 ComScore4 estimated that US consumers watched 10 billion videos online.
During 2007 15% of all retail sales were done online5. January 2008 sales reached an all time high with 4.4 million translations being made on Christmas Day itself6 when many retailers started their special sales. Research by Ofcom7 shows the UK a leading country worldwide in the availability and use of digital TVs, mobile multimedia and broadband service access.
Just as the internet opened up e-commerce and e-mail so Web 2.0 and social media is changing the way people can communicate as well evaluate and make purchase decisions. PR organisations should be aware of these developments and ensure their clients have strategies to address this new digital world.
Communities of influence have existed in many forms in the past. Subject matter experts have always been sought out either within the physical community or through traditional media. Today the internet and communications taken together with social media software gives subject matter experts a global reach. Equally online consumers value independent and knowledgeable advice. Edelman PR8 has been doing their annual Trust Barometer for almost 10 years. During that time it has seen consumer confidence (or is that a reduction in deference to the ‘establishment’?) in media and the state decline. ‘People like me’ are now the most trusted sources of information. With the advent of social media software and the internet ‘people like me’ can now be found easily and globally. As has been said – we all live in a global village.
There has been debate as to the nature of ‘friendship’ in the online community or global village. Anthropological8b studies on ancient tribal groups and primates have indicated that a social group becomes unstable above 150 (called the Dunbar 150 after the scientist who did the research study) as we cannot maintain ‘relationships’. Whilst this maybe true in the physical world it does not hold true in the cyber-world. We have many different systems using ‘profile matching’. Dating agencies use personal profiling to match up peoples interests, hobbies and stated ‘preferences’. Amazon uses your purchase history and that of others to suggest new books to buy. It uses ‘wisdom of the crowds’ reader generated reviews and a ranking system to promote books. TripAdvisor has user generated reviews to help suggest hotels and facilities to people planning trips. By knowing a bit about people you can see if they are similar to you. Get enough people saying similar things helps you make a decision. JDPower and other automotive groups have long used a customer feedback system to rank cars popularity and reliability. The motoring journalists may rate a car highly but we trust the judgement of fellow car buyers especially long term owners to give a balanced judgement and recommendation. The internet has simply meant we get access to more experts globally and can find communities that fit our personal needs. These online communities and influencers should be a critical part of any PR agencies communication strategies for their clients.
This technological capability of the internet has happened at the same time that traditional communication channels (radio, TV and print) – regional and national - have struggled to maintain an audience.9,10 &11 Increasing digital channels on TV and radio already provided an audience with multiple choices. Internet based publications, search engines, and web portals now provide even more choice through on-demand PC (and now smart phone) based communication platforms. Commercial TV and newsprint have found that the traditional broadcast advertising fee based model does not work in a ‘narrow cast’ and fragmented world. Traditional production values and costs are not sustainable with the ‘long tail’ marketing model of multiple small interconnected communities of interest. We now see newspapers successfully investing in building their own online communities12. It appears that delivery formats are blurring too as broadcasters use blogs (text based communication) and newspapers produce video and audio podcasts.
Traditional marketing and communication agencies have found the speed of adoption of social media and networking hard to adjust to. Their structure and processes are geared to mainly ‘broadcast’ marketing. PR agencies have struggled as well. Their well established relationship with the media and journalists still remains strong and essential but is now not the only way to communicate to consumers. Whist the online community does take news and information online it also seeks out direct information from companies. Many people online act as consumers of information and publishers also through blogs and Forum membership. Why use the press and broadcast media as an intermediary to interpret your story when communities of interest can be contacted directly or through ‘key influencers’ who are members of that community too?
Two big debates within the media today are smaller sales revenue caused by declining circulation and the resulting reduction in ad revenue and secondly the future role of journalists with the emergence of ‘citizen journalists’ and the blogger community. Many ‘A’ list bloggers13a can get millions of readers in a month. Which journalist can say their column or article is read by that many people? Equally some bloggers may have a lower readership but have other bloggers quoting them and linked through to their blogs so extended their influence through multi-networking rather than pure volume of direct readers. (This is same issue with the smaller circulation numbers of trade publications and business press versus tabloid sales volumes)
The new digital enabled world needs a new style digital capable PR agency. Masters of traditional as well as the online communication world both from a creative and a technical skills base. Able to work with the media and with online communities. To work with the blogging and online community just as naturally as it does with journalists and the traditional media.
The new agency dynamics
Many organisations are moving online and actively using blogs and Web 2.0 based sites to engage with their audiences. These sites allow customers to engage with companies in different ways to earlier iterations of web site design. Equally the old style method of mass undifferentiated press releases with an ‘edit, cut, paste and publish’ mentality is having less impact. Online media coverage in blogs, forums and other communities is usually done by people who are not journalists (many would hate to be called one anyway!). However they are no different to many journalists and are not afraid to share their opinion. Many people consider bloggers not to be covered by libel laws and journalistic best practices but they are. A blogger can be sued but the reality is they can claim ‘fair comment’ if they are expressing a view based upon personal experience of bad company service. If a company sued and won it would not result in damages being paid. Bloggers do not have the same funds as the media. The media will be sued more often than not because they have money to pay compensation or settle out of court. Bloggers depend on their readership so will not be so ‘rabid’ as to risk losing people unless that is what attracted them to the site in the first place. Equally the blogosphere is a self-moderating environment. People – and the company has the right to do this – can comment on a blog. If a blogger says something that is unfair or inaccurate anyone can reply. This means companies should monitor blogs and be commenting on all posts otherwise it is ‘one sided story’.
To be used in the online world by bloggers and the online community generally a press release needs to be optimised for search engines, use multi-media and tools for social communication as well as be useful to the targeted community. This can be called a Social Media press release. When linked to a PR micro-site it becomes a powerful tool for both the media and online community (bloggers and online consumers). A great example is the recent merger of Delta and North West airlines in the USA13b.
Bloggers and community forums are much more interested in regular, direct, ‘raw’ and factual information (‘give us the details and not the spin’) that they can drill down and present in a way relevant to their audience. They in essence want access to the building blocks rather than a finished item. The comments and feedback from their own audience is direct and fast. These comments have to be acknowledged and engaged with as this is part of the community conversation. Most PR agencies (and their clients) are ill equipped to understand how to the engage with this ‘long tail’ of non-traditional digital media and its interactive comments and dynamic nature. Digital media community influencers do not get listed in Hollis and other PR directories and databases listing journalists or media contact details. They exist on the web but have to be found and nurtured just as a good PR agency would do in developing a relationship with traditional media journalists. Just like specialist print and broadcast media you get bloggers and online communities that are detail focussed. Others take the big picture and could be nationally or internationally based. Just like a traditional media campaign a good PR agency should target the online community and understand both the online ‘commentator’ and their ‘publication’.
The problem is that there is no single authority that publishes audited circulation or readership details of bloggers or online community groups. So who do you find out who is most influential? The ones with the biggest audience? The ones with the most comments? The ones that are the most prolific? The ones less or more ‘smart and tart’ or edgy? The ones who comment most on your client or clients industry? This takes research but tools are available to help and every month a new announcement is made of a new supplier. Just like a traditional clipping service, tools and service providers can monitor the online environment and track who is saying what, where and when. Equally the online community would love companies come and join them in open and honest conversations devoid of spin.
Company blogging and use of podcasting and other social media tools are therefore very welcome. This is where the PR agencies can make their traditional skills and experience and make pay dividends for clients. There are over 1.3 billion people on the internet. That is over 1/5th of the worlds population. There are 120m+ bloggers. That means 90% of the online community are ‘consumers’ of online information and not content generators. Companies need a strategy to communicate with the online audience. If a PR company is not monitoring a clients online brand reputation and helping to influence it – then who is? With more and more people making purchase decisions based upon online influences and recommendations from digital communities all companies need to have a strategy to manage their PR online.
This new function of Digital Community Relationship Management blends many of the empathetic and communications skills a traditional PR agency has with technical cyber skills.
Online relationship management must include the following key groups:
- Bloggers and journalists writing for online versions of the traditional media
- Bloggers writing for their own audiences
- Enthusiasts and ‘fanzines’ usually following specific topics or companies
- Forums and other Online communities
One big difference between traditional and online media is the fact that the internet gives global coverage straight to peoples desktop or mobile phone in seconds. Social community communications means it is re-communicated equally fast. Within minutes a global event or negative customer experience can be communicated worldwide. This can create ‘firestorms’ – positive and negative. A well known negative case was Dell and what happened a few years go. PR agencies and clients – like Dell – can be slow to react. By being slow they risk an escalation which is what happened with DellHell14. Equally a company can leverage the online community and turn a potentially damaging situation to their advantage as happened with Coke and Pepsi and Mentos15. An unexpected reaction between the sweets and the drinks caused the liquid to expand in the bottle and shoot in the air. Rather than have the legal department create ‘cease and desist’ requests to individuals or YouTube the organisations stayed neutral. Within weeks multiple versions existed. Mentos (company denied) were rumoured to have sponsored some of them. The videos were watched by hundreds of thousands and encouraged others to try it at home. If you look on the blogosphere today there are posts still happening today – years after the story broke. What is really fun is that everyone who tries the experiment has to buy the product. A win for both companies.
Major news gathering services like the BBC have realised the power of social communities and are actively working to engage with ‘citizen journalists’16. Products such as Qik (real time video upload service) and Seesmic now mean people can blog and video using mobile phones or small low cost video cameras and upload in real time – capturing incidents as they happen. Many conferences or events are now ‘streamed’ in real time by text, audio and video bloggers who add personal opinions. Whilst some of this content will be picked up by traditional media a lot is ‘self-published’ to the world via the internet. Once online it is there forever (as long as the server and document links still exist) and in a format to allow easy onward publishing (like syndication but without copyright issues).
A brands online reputation can be compromised if it does not continually pro-actively monitor its mentions (good and bad) online, engage in the conversation and have a plan in place to immediately react if sentiment or comments turn negative. Online crisis management works at a different pace and in a different way than with traditional media. With traditional media you would normally be given a warning of an impending negative story by the journalist approaching for a comment. Online people will often just publish with a personal view. No double checking of sources is necessary as the blogger is the source. They could be the unhappy customer. It is their story as well as being a story. With search engine optimisation this means a negative story can be in the top 10 listing on Google within a short time and will be available to read forever. Monitoring and speed of reaction is critical. Ignoring the bad news in the hope it will fade away is not an option. In essence the story is in print forever!
The new agency model – Digital Reputation Management
A gap exists in the market for a highly focussed, technically competent agency who really understands the challenges and opportunities of online communities and social media.
The agency will be technically savvy with highly developed SEO and data search and analysis skills. This has to be coupled with creative digital skills and communication skills.
Organisation structure
The digital agency will have three teams:
- Client services – sales, project and client management. Budget management and guardians of profitability through timesheet and billings supervision. Blended front and back office function. (This can be shared with the ‘traditional’ agency team)
- Content services – the micro-site copywriters, bloggers and podcasters. Switched on to techie tools and the online community they will know and use all their communication skills to be active in cyber-space in their own right. (For many agencies this would be an extension of their teams current skill sets. Writing skills for press releases, testimonials and white papers/brochures = blog. Presentation skills at a press conferences, events or tradeshows = podcast. The internet is the worlds largest TV, radio, newspaper and magazine all rolled into one. It is free and it is possible to find communities of interest. PR agencies are better placed to use it as a communication platform than a web design or ad agency)
- Technical services – the cyber management team looking after the IT infrastructure and developing/supporting the online reputation management desktop systems. The back-office team who will work with the clients IT departments where necessary. (Rather than outsourcing this service or considering it a ‘dark art’ PR agencies should embrace it and make it a core skill)
What will a PR2.0 agency offer?
- Online reputation monitoring and alert service
- Reputation analysis, tracking and reporting
- ‘Firestorm’ crisis management and leveraged opportunity service
- Strategic planning and implementation services for social media and online media campaigns
- Blogging, audio and video podcasting project development and management
- Campaign micro-site development and support
- Online community development
- Identification and relationship building with key online influencers
- Building and delivering online PR campaigns including to online media and journalists
References:
1 http://www.sagazone.co.uk/
2 http://www.ofcom.org.uk/advice/media_literacy/medlitpub/medlitpubrss/socialnetworking/%20
2b http://www.hitwise.co.uk/press-center/hitwiseHS2004/demographics.php
3 http://news.bbc.co.uk/1/hi/business/6959049.stm
4 http://www.comscore.com/press/release.asp?press=2051
5 http://www.imrg.org/ItemDetail.aspx?clg=InfoItems&cid=pr&pid=pr_IMRG_Index_Jan08&language=en-GB
6 http://www.imrg.org/ItemDetail.aspx?clg=InfoItems&cid=pr&pid=pr_Index_press_release_200208.pdf&language=en-GB
7 http://www.ofcom.org.uk/media/news/2007/12/nr_20071213
8 http://www.edelman.co.uk/trustbarometer/
8b http://en.wikipedia.org/wiki/Dunbar's_number
9 http://www.techcrunch.com/2008/03/28/decline-of-us-newspapers-accelerating/
10 http://www.guardian.co.uk/media/2008/mar/10/pressandpublishing.abcs
11 http://www.pressgazette.co.uk/story.asp?sectioncode=1&storycode=40456&c=1
12 http://www.mediabuyerplanner.com/2007/10/16/top-10-uk-newspapers-online-audiences-continue-to-grow/
13a http://valleywag.com/tech/internet-famous/whos-really-the-most-famous-blogger-246134.php
13b http://www.adrianjmoss.com/PermaLink,guid,f80d14ff-4d89-46cf-8ad7-e21b00b82bcf.aspx
14 http://www.guardian.co.uk/technology/2005/aug/29/mondaymediasection. blogging
15 http://www.youtube.com/watch?v=hKoB0MHVBvM
16 http://www.bbc.co.uk/blogs/theeditors/2008/01/value_of_citizen_journalism.html