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November 21, 2005

Is Public Relations Ready for Discontinuous Change?

As the Thanksgiving holiday nears, I try to gather my thoughts on the year past and to anticipate the year ahead. The most striking development for our industry must be the fundamental shifts occurring in media. Here are a few statistics:

* Every dollar coming out of print advertising revenue for newspapers is replaced by only 33 cents online, according to Citigroup analyst William Bird. Print advertising accounts for approximately 66% of total revenue for newspapers. This money is ebbing away to web competitors like Monster.com or Yahoo.

* The largest 50 Web companies are attracting 96% of the ad spending on line, according to Pricewaterhouse Coopers, with the majority going to AOL, Google, MSN and Yahoo. The hottest genre of Web advertising is 15 second commercials that run before on line videos on sites such as WebMD.

* An estimated 9.5 million homes in the US now have TiVo or another digital video recorder. According to a study by CBS, 64% of DVR users skip all ads and an additional 26% skip through most ads. The number of homes with DVRs is expected to triple in the next five years.

* An estimated 24 million homes in the US now have access to video on demand. Comcast, the cable company, offers 4,000 on demand features at present. General Motors is now experimenting with short promotional films on the on demand menus of cable systems.

* Publishing companies are moving away from free content towards a subscription model on the Internet. The New York Times has put its very popular columnists (Tom Friedman, Maureen Dowd) into a paid format called TimesSelect costing $49.95 a year. There has been excellent response to this service, with 135,000 new subscribers in only two months.

* Circulation for large American newspapers is down 2.5% in the third quarter versus a year ago, continuing a decade long slide. Erosion is particularly evident among younger consumers. As a result, there have been reductions in head count in the newsroom. The Philadelphia Inquirer just cut 5% of its reporters. According to today's The New York Times (an article by David Carr), The Los Angeles Times announced cuts of 85 newsroom employees, while The Chicago Tribune side it was cutting 100 jobs across all departments.

There are several clear implications for the media business. There will be continued cost pressures on the companies, but with attendant questions about the ability to maintain quality of the product. The search for new revenue streams, whether from repurposing (such as podcasting) or pay-for-content, must accelerate.

For public relations professionals, these profound changes in media are both a challenge and opportunity. Our traditional channels are under siege, yet there are more media options, particularly if one includes blogs. Here are a few suggestions for the next year:

1) Retrain our work force. PR should move away from "pitching the story" mentality. We can be part of conversations on line. We have to be smart about our subject and careful with our facts because these discussions are always on the record.

2) Recognize the influence and credibility of blogs. David Kiley of Business Week wrote about Paramount Studios' success with a niche film, Hustle & Flow, which was promoted through music blogs and fan sites. Thirty five percent of moviegoers said they were motivated to see the film through discussions on line.

3) Experiment. We should be working with video clips attached to press materials to make it easier for bloggers in consumer technology to create v-blogs. We should seek out innovative sponsorships with traditional media, including cross-platform content creation such as a discussion of real beauty, brought to you by Unilever's Dove.

This truly is a time of unprecedented opportunity for public relations. As Paul Holmes noted in a recent address to our European management team, the Internet is a perfect venue for our industry because our business relies on conversation and we engage multiple stakeholders. At the same time, we must always cognizant of our responsibility to be transparent and trusted sources of information. Look forward to your thoughts about how we can innovate and lead.

Posted by Edelman at November 21, 2005 9:26 AM | Bookmark and Share

Comments

Great thoughts, Richard. It does seem like a fundamental shift in media and journalism will mandate a fundamental shift in our profession. Your final statement, about new ways to "innovate and lead" is maybe perceived as more of a challenge than it needs to be.

I've seen several posts floating around in the blosophere lately about the merits of "licensing" PR practitioners. The line of thinking seems to be that if we certify the professional standards and quality of PR practitioners, we'll be worthy of the respect we're due.

That seems wrong to me.

I keep getting the feeling that many PR professionals feel marginalized in the executive suite and desire permission to speak out. To me, that's like the employee who constantly complains of never being "empowered" but has all the tools and authority required.

What's lacking is courage.

As your post so aptly points out, there has never been a time when media has been such an integral factor in the life or death of an enterprise. Entire businesses now exist solely in the media. The speed of information is now the defining parameter of organizational operations and change. And as those speeds increase, executives and entrepreneurs who understand how to manage information in the media will continue to see their stock rise.

Put in its most simple terms, one bad move in the media today can be disastrous for a company. In two to three years, such a move might be terminal.

PR professionals, because of their focus on positioning and the strategic relationships between brands and stakeholders, are in a unique position to capitalize on this opportunity. We just need the courage to take advantage of our own strategic opportunity.

Thanks,

Mike Bawden
Brand Central Station

Posted by: Mike Bawden at November 21, 2005 5:55 PM


For PR professionals, they are susceptive enough to know the media trend including BLOG, but it is difficult for us to know how to use BLOG as our new tool properly, helping both clients and media.

Posted by: Camy at November 21, 2005 9:24 PM


Richard,

These are very astute and timely observations that should give pause to anyone plying their trade in the PR profession nowadays.

A couple of thoughts: practitioners need to recognize that the transformation we're seeing applies to both entertainment and news content. Much of what's being reported on paidcontent.org and other sites revolves around the new distribution channels for entertainment programming, and the monetization thereof, e.g., pay-per-view episodes of "The OC" on one's cell phone. While PR practitioners need to be mindful of the "placement" opportunities (and potential partnerships) offered by this media genre, it is the providers of news and information content (mainstream and citizen-types) who continue to serve as primary pipelines to our clients' constituencies.

On this front, the fragmentation and explosion of "media" outlets -- not just online, but new niche magazines and cable channels -- make our jobs these days almost unscalable. You are right in your call to make our clients' news "smarter." RSS-enabled and keyword-tagged news releases, in addition to more efficient use of digital images, audio and video, better accommodate the growing legions of online journalists and media consumers who parse their daily intake of content with RSS readers and TIVO.

Finally, while we shouldn't underestimate the "influence and credibility" of citizen journalists, we should rest assured that the knowledgable PR professional will not be disintermediated anytime soon. As Los Angeles Times New York bureau chief Josh Getlin recently noted, "There are no substitutes for an informed publicist...I've yet to see anything that competes with that."

Posted by: Peter Himler at November 22, 2005 11:11 AM


Richard, I am a penultimate PR student from Sun-yat sen (Zhongshan)University, Guangzhou, China.I am going to have an part-time job interview 3 hours later, and guess what? That is no other than Edelman's department in Guangzhou. I'll do my best to get a chance to work with you for sometime:)
I'm a blogger too, it keeps me thinking and being sensitive to the changes of the society around, it helps me in the PR affair someway.
Well, I'm going to Edelman now~ Wish me luck~

Posted by: Rose.Chang at November 24, 2005 9:16 PM


By the strangest of timing, I was refelecting on the consequences for the PR industry today.
The heat is on traditional media and fewer editorial pages is going to impact press relations a lot. The PR industry has to take these developments very seriously.

Posted by: David Phillips at November 26, 2005 10:16 AM


Mike you are right--we do need courage. But we also need the discipline to do it better--to have more content, 100% accuracy on facts, compelling video. We should also bring the employees and enthusiastic consumers in early so they can opine and contribute to the outcome (even product design). Thanks for reading my blog.

Posted by: Richard Edelman at November 28, 2005 8:59 AM


Richard,

I think you're exactly right. It's my hope that strategic communications professionals like PR's will recognize what's at stake and, as a result, will recognize the need to be more vigilant, more accurate and more passionate about their jobs and the brands they advocate.

Your comment about the need to bring in employees and enthusiastic consumers is so right - and, almost embarrassingly, so common sens-ical. After all, we all know, deep down, that it's much easier to live up to a brand's promise if we all pull together. And we know it's much more credible to have enthusiastic consumers endorse, live and communicate a brand's USP than any amount of "marketing" messages sponsored by a company in its own self-interest (either directly through advertising or indirectly through media relations).

Yet, not until the rise of the blogosphere have corporate managers really started to take note.

Thank you, Richard, for taking these issues head-on. In your position you can bring them much more visibility than a "small-market, ad guy" like me.

I'll keep reading your blog. Just keep writing such compelling stuff.

Best Regards,

Mike Bawden
Brand Central Station

www.brandcentralstationc.om

PS - I didn't comment on your post a month or so ago, but I just wanted to thank you for your insights into the Polish market. I've been to Poland twice on business in the past twelve months and agree with your assessment that it truly is a land of optimism and opportunity.

Best,

Mike

Posted by: Mike Bawden at November 28, 2005 9:00 AM


Peter, I completely agree with your point on the establishment media. I do believe that there is a credibility and reach advantage. But for those under 30 years old, the new media rules and we need to change our tone, our approach and even the look.

Posted by: Richard Edelman at November 28, 2005 9:04 AM


nteresting post on the blog of PR man Richard Edelman about the future of media.

Extracted highlights:

* The largest 50 Web companies are attracting 96% of the ad spending on line.
* 9.5 million homes in the US now have TiVo or another digital video recorder. 64% of DVR users skip all ads and an additional 26% skip through most ads. The number of homes with DVRs is expected to triple in the next five years.

* Every dollar coming out of print advertising revenue for newspapers is replaced by only 33 cents online.

Changes to the media landscape are dramatic. I think many in the media industry have not yet internalized these numbers

Posted by: Thomas Crampton at November 28, 2005 9:39 AM


David,

Note today's Pew Study for latest data on Craigslist taking classified ads away from newspapers. This is real issue.

Posted by: Richard Edelman at November 28, 2005 12:34 PM


Rose as we say in the US break a leg (that means good luck)
and keep reading my blog

Posted by: Richard Edelman at November 28, 2005 12:36 PM


The 6AM post titled “Is Public Relations Ready for Discontinuous Change?” has drawn good attention in the blogosphere and has been linked to by several other bloggers.

Posted by: Paul Cordasco at November 28, 2005 4:55 PM


Your statistics are quite interesting. I'm a freshman at Northwestern University and am in Medill, the journalism program. I suppose part of this message is directed toward Thomas Crampton. Many of our lectures have revolved around the realization of the media that we need to change. And are changing. Newspapers are creating websites with live video streaming. I think the lines differentiating broadcast, print and radio and becoming blurred. Some students are worried because they had their heart set on a specific profession and they think their job will be mute upon graduation. I personally see it as a chance to have even more opportunities. On a slightly different note, I think we are experiencing a very important part of history now as far as free internet goes. I imagine in a couple of years someone will figure out how to capitalize on it--tame it so to speak. But is there a more common ground than all out capitalization? Look how popular/influencial a free internet is now. People like that and can't get enough. This is a business's dream. My possibly unaswerble question is how do we get that kind of interest and have the profit outweigh the cost? And how would PR fit into that?

Caroline Smith
caroline-smith@northwestern.edu

Posted by: Caroline Smith at November 29, 2005 10:21 PM


CS I had dinner last night with long time NY Times reporter/editor Key issue--decline in advertising in classifieds at same time as drop in circulation of print edition. They want to keep highest quality reporting--that is essence of brand. But the cost issue is relevant in face of flat to declining revenue. No solution yet--but pay for tiered content is coming Note NY Times Select as model

Posted by: Richard Edelman at November 30, 2005 10:13 AM


How do PR professionals innovate and lead? What about a new model for PR that focuses on the development of a community of interests? Media ink would no longer be the penultimate PR objective, but more often the starting place for discussion. Social networking has produced Friendster, Myspace and FaceBook. What about an online community of journalists, publicists, bloggers, users and others who share an interest in a company, an industry or an issue? This community might generate its own Wikipedia-like content, could serve as a clearinghouse of opinion, and might generate a healthy interaction and discussion among all the constituencies. What do you think? I do agree that the PR/marketing communications industry is in flux, disrupted by new channels of communication (blogs, RSS, podcasts), new media (online, citizen journalism), new constituencies (bloggers, consumers, users – worldwide and real-time), as well as the relative decline of “MSM.” The “client” has lost control of the messaging, and customers, employees or competitors increasingly set the communications agenda. Distribution is no longer linear and 2-dimensional, but must be delivered in a form and through a modality appropriate to each constituency – it probably doesn’t make sense to fax a blogger, and few newsrooms today are monitoring RSS feeds. True, the PR professional must still act and interact with MSM, but also with bloggers, users, investors, employees and others who often play a more important role than traditional media. And, the pitch isn’t made over lunch, but online 24/7. How does PR assume leadership? One approach might be to explore new ways of doing business that embrace change – how about an online community focused on whatever is top of mind?

Posted by: Jon Victor at December 2, 2005 10:40 AM


Excellent article by Richard Edelman about the future of public relations. Relying mainly on several statistics about the shift of advertising dollars to the Internet, Edelman argues that “there will be continued cost pressures on the companies, but with attendant questions about the ability to maintain quality of the product. The search for new revenue streams, whether from repurposing (such as podcasting) or pay-for-content, must accelerate.”

Posted by: Tim leberecht at December 5, 2005 12:43 AM


Dear Richard,
being a universtiy student who majors in Public Relations, I was very interested to read your comments on the future of our industry. I also think it is important to note that training should also to be initiated at a tertiary level, so as to ensure future of our industry.

Posted by: Joseph McGuire at December 27, 2005 5:08 AM


Thanks for reading my blog. Training is a sore thumb for the industry. We need to get beyond the basics of writing and pitching.

Posted by: Richard Edelman at January 4, 2006 1:15 PM


Richard, Thomas (Crampton),

I'm a little late in coming across this posting via a series of links but here I am. Anyway, as Thomas pointed out, Richard as a PR man states some interesting advertising facts..(but then again, its those outside the ad industry that better understands the online potential. Afterall, in keeping with that, the biggest ad network in the world could be Google, a search engine by definition!)

* The largest 50 Web companies are attracting 96% of the ad spending on line.
* Every dollar coming out of print advertising revenue for newspapers is replaced by only 33 cents online

It has to be noted but not often verbalised that there are many ad execs/ media planners and marketing directors who are clueless about online and their fear of the unknown makes them risk averse...however they also have to keep up the pretense of going with the flow and park advertising dollars online and so they go with the low common denominator buys. Hence the 50 web companies attracting the bulk of the media budget.
But there will come a tipping point where the ad dollars will reflect the true state of where the real audience is at and a greater distribution down the Long Tail. For now, it is ignorance and fear that dictates the media spend allocation and hence the skew to the low common denominator. After all, to paraphrase the old maxim "no one will ever get fired buying Yahoo"

Posted by: Mathew D at October 10, 2006 2:16 AM


In the course of updating my understanding of the "established PR industry," I ran across this blog and I found it quite interesting. Much of this discussion is limited to the decline of traditional methods, which I believe misses the main issue.

It seems to me that the decline in traditional media has forced all business into what is, truthfully, a much more fundamental approach to advertising. Before the advent of electronic communications (beginning with commercial radio and television and continuing to our online world), information was spread by word of mouth and various other public forums. Playbills and notices were posted on light poles, sandwich boards on kids walking the street, patent medicine sold from wagons. All where people who wanted to be entertained, fed or healed might congregate.

We're back to that era. Television, radio and mass print publications made businesses and advertisers in general lazy and apathetic. Several million dollars and your message is out there to blast anyone who turns on a box or opens a page. Today, our street corners are electronic and anyone with an online shopping cart has their modern wagon. Just as in the 1800s, media consumers are again more in control of what they see and hear. Tivo and on demand sees to that.

The "established" PR and advertising world is suffering from withdrawl. We need to be clever again. Not just with our creative, but with how we lay our information in the path of those who may want to find it. Elective messaging is what we have come back to and the industry must embrace it. This is back to grassroots marketing, but on a global scale and a nanosecond pace. This calls for a return to basics in our thinking about why people buy; and where and how they find information. Then, we apply that to these fantastic, unlimited streetcorners known as blogs, iPods, Sidekicks, podcasts and whatever's next. Fundamental marketing that is in varying degrees available to companies of all sizes. All that's lacking is a change of perspective, a willingness to work hard to get to the consumers, and a new way of earning compensation for this more granular, pinpointed approach. Innovation has taken on a throwback, yet futuristic look and we'll need to go back to basics to catch up to its demands.

Posted by: Tony Diamond at October 26, 2006 4:36 PM


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