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December 13, 2005
I Am Even More Certain That Now Is Our Time
I convened our annual Edelman Executive Committee meeting last week in New York. We were fortunate to have outstanding speakers who gave their views on the communications business. The experts were Lauren Fine, media and advertising analyst from Merrill Lynch; Jonah Bloom, deputy editor of Advertising Age; Jeff Jarvis, the blogger behind BuzzMachine.com; Andrew Heyward, outgoing president of CBS News; and Michael Hansen, global director of strategy for Bertelsmann. After hearing these gurus, I am more persuaded than ever that now is the time for our PR industry. Specifically, this type of move of tectonic plates in a business environment happens only rarely, and we are at one of those moments. Here are some highlights of the remarks:
Fine--For the first time in recent memory, there is actual deflation in the media business. The same numbers of advertising units were sold in 2005 but the price was 2.2% lower, as competition from Internet and local cable was felt. Key growth categories such as auto and entertainment were flat to down. Those under 30 do not want to be advertised at--they seek out information. Media companies are experimenting with selling content a la carte, such as episodes for podcasting at $1.99 without ads. Viral marketing is PR, so is event marketing. Media products are becoming more niche, such as the Chicago Tribune's Metro Mix, widely referred to as the Internet in print form.
Bloom--Clients are not automatically using advertising, though up to 75% of money spent in a traditional budget was 30 second spots. WOM is a big chance for PR. PR firms have been bad at selling themselves because marketers do not think of us as having marketing capabilities. Marketing is part of PR's role--there has been too much emphasis in the PR agency business on CEO positioning or corporate reputation. When P&G says PR is the most effective marketing tool and Wachovia Bank says PR is #2 just after Internet ads, it is the time to press forward. Consumer created media is a big opportunity--BBC.com is pioneering in this.
Jarvis--Consumer is an old word, implying that we eat content and crap cash (my favorite line of the day). If you give people control, they will use it--if not, you will lose them. We're living in the post scarcity era of media where the wars over content and distribution are over and neither won--in fact Trust wins. Trust is the organizing principle, utilizing the wisdom of crowds. This new world is not isolating, in fact it relies on community and craves validation. Examples given include Flickr "interesting-ness" tag which shows most highly-ranked photos or Digg.com where people submit stories and vote them up to the front page. Brands will differentiate themselves by humanizing.
Heyward--Era of media omniscience is over. Don't run away from contradiction, embrace it. There is no single or simple truth--the dialectical tension should be understood. Authority of media brands is no longer a given--convenience and what's cool may be more important to news brands. Authenticity is at a premium. Note the benefit to CNN and Anderson Cooper from Hurricane Katrina coverage, which was an honest voice reporting, with all of its raw emotion and advocacy. Need a real connection with your consumers, with credibility based on honesty, admission of complexity, offering genuine diversity of opinion. Platform specific content will be very important, with the end of "shovel ware" where you just try to cram content made for TV onto the PC or cell phone.
Hansen--There are no integrated media companies, just conglomerates. The media industry has lost the ability to grow from an investor standpoint, with the sole exceptions of video games and on line distribution (think Google). There is a flight to quality in TV advertising, with the top 1 or 2 brands still healthy but big damage to numbers 3, 4 and 5 in a market. The mental shift for corporate clients on advertising seen in the move from 70% of time purchased in 2004 in the upfront market to only 30% in 2005. There is a real chance that advertising on demand will be offered. An example is a person in the market to buy a car who might want to see 20 or 50 car ads at that time. But a key point is loss of control of the customer, who does not have to see the car ads regularly. Europe is 6-18 months behind the US in move toward new environment, with France and the UK ahead of Germany, Italy and Spain. Traditional media companies cannot survive on the advertising from their new media versions--they must get a piece of the eventual transaction.
Here are my key learnings from the above:
1) We have to promote PR as a discipline ideally suited to this next period. We should take some chances, put aside money for specific venture investing in projects with our clients and then publicize the results.
2) We should modify our tone from selling to factual, our concept from one big bang to continuous conversation. We need to admit complexity and contradiction. We need to persuade our clients that less control, of the message and the messenger, means enhanced trust.
3) We can have direct connection with consumers, particularly those who are avid users of specific products or experts in their area of choice. The same goes with employees who are the new influentials, as credibility is enhanced with communication coming from the inside out.
4) Social networks are a big deal. I am not clear how we enter into the conversation on MySpace or Facebook. But I am certain that my 14 year old spends an hour a day in her little community and that these intersecting circles are the next big idea. Can we put up compelling content on consumer technology products or other high interest categories that penetrates the teen consciousness in the same way as the Bush-Kerry cartoons on Jib Jab? That is our challenge.
Posted by Edelman at December 13, 2005 8:49 AM
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Comments
After watching "The Changing Face of Media" on Infusion, I was again struck by the opportunity for PR to connect people to information, whether it's about consumer products or medical treatment options in healthcare. We just need to fundamentally change the way we connect.
Full disclosure: I am 24. I actively seek out information online, and don't enjoy being advertised at. I use MySpace to stay connected to friends, family, old coworkers, and my favorite music artists. I work in Chicago Healthcare. I don't know what I would do without Google.
In case you haven't noticed how MySpace is changing the face of music, ask your 14 year old about MySpace Music. Any artist - from the latest American Idol to my friend's band - can have a site that allows them to post sample songs, upcoming concerts, and information on the band. I can add the band to my list of friends, and then be updated with bulletins they post. I always know the most recent information, I can listen to the latest music, and can go out and buy the new album if I like what I hear. For unsigned bands, prospective record companies can gain a sense of their music, fan following, and potential before offering artists a development deal. The folks at MySpace have just released their first compilation CD in what is sure to be the first in a series highlighting their favorite artists.
As Jeff Jarvis noted, active seekers need corporations to provide attention, materials, training and revenue. MySpace Music does that - gives fans attention, concert information, and free songs in advance. Bands also get attention. Corporate banner ads, song downloads and compilation CDs provide revenue. Bands do not try to proactively penetrate a market, they simply provide information for active seekers.
In healthcare, I believe PR can directly connect with people with a particular ailment, provide them with information, train healthcare providers on new treatment options, and fund valuable research and clinical trials. PR does not claim to provide treatment. Doctors are responsible for that. We are simply trying to connect individuals to information. As more people seek healthcare information online and DTC ads lose their hold in the media, pharmaceutical companies and medical associations have an opportunity to become the source of information. The first company or organization to figure out how to overcome regulatory and medical hurdles will pave the way.
I agree, this is a time for PR to emerge, offering timely information straight from the source. If each citizen can become a journalist by posting online, then every effort we make on behalf of our client to provide factual and timely information on a peer-to-peer level is a form of media relations. We need to encourage our clients to accept the bad with the good, and to disclose complexities.
I see my generation as less formal and more demanding in terms of disclosure, speed and accuracy. PR needs to participate in and provide information for, not penetrate and try to control, existing social networks. Edelman can lead the way in changing the way we connect.
Posted by: Kim Guenther at December 14, 2005 12:55 PM
Richard,
Good to see that we (as pr-experts) try to "listen" to teh market, my favorite quote was form ANDREW HEYWARD though:
“I think that credibility is going to be built on honesty-- not just reputation, not just style-- honesty, including the honestly to acknowledge mistakes and to acknowledge complexity. And that again, is something that people I don't think have quite-- you see the trend is starting. You know the pioneers are pushing for this. It's going to take a while for the mainstream to follow, because as you know your business better than I do, the reflex is so often the opposite.”
That is what PR is really about - honesty. Advertising is on the decrease, especially in Europe, no one "believes" it anymore. God save the remote- bye bye god old ads.
The only problem is that companies, particular over there in Europe, still have to realize that they have more possibilities than to advertise in order to get the message out.
They are even not "listening". Still conservative business as usual. However, PR hast to become more popular in showing how we can use relationships, communities (Facebook) to understand by entering conversations what clients want/need and to give them exactly that.
Therefore we have to go an aggressive way of self-promotion/marketing and grow into areas which are hot. (Berlin!? ;) ). Aggressive/pushy spreading of credibility- that is the way pr has to go in Europe, also to differentiate pr from hyperbole, boring advertisement. Independent organic grow is a good way into that direction.
Therefore isn’t our challenge on the two front’s pr-battle to convince CFO’s and CEO’s to spend money for pr than just to convince costumers?
Sebastian
Posted by: Sebastian at December 14, 2005 4:28 PM
Absolutely we have to push hard with the CFOs and CEOs but most especially with CMOs PR is now proven to be more effective than advertising, per a P&G study.
Posted by: Richard Edelman at December 15, 2005 2:46 PM
Exactly why I am so militant about the pay for play mentality! It is not only unethical, it is ineffective. Once the source is questioned, the content is diminished. Thanks for reading my blog
Posted by: Richard Edelman at December 15, 2005 2:47 PM
You get it. The whole point is peer to peer instead of top down communications. That is why MySpace is so effective. It is a self selected buddy group sharing experiences with confidence in the information given by friends. Thanks for reading my blog
Posted by: Richard Edelman at December 15, 2005 2:48 PM
However, the problem which is remaining still-
How to be in the position to gain access to those peer groups without being questioned?
You cannot just hire peers from your target audience-
It will turn out (see Bush?s administration approach to hire journalists in Iraq) and either way you would be in the advertisement area again.
I think these two areas are becoming indistinct. You are right, I as a consumer don't like it when somebody is speaking down to me, and no one likes that in general. But first of all you'd need a good and satisfying product, first then you can start to persuade peers via direct (mouth2mouth) communication. However- as I just said- the question is staying- how to enhance the perceptions of trust and especially- referring to the Blogosphere- how to counteract negative publicity by "using" (I don't like the word in this relation, cannot think of a better one though) target audience influencers?
Sebastian Goeres
Posted by: sebastian goeres at December 15, 2005 3:11 PM
I went to LesBlogs a week or two back in the hope and expectation of hearing you speak. As one of the few PRs who are engaging with the blogosphere, it seemed like a great opportunity to hear you and, maybe, be able to hear a conversation between you and the audience.
Sadly, you didn't materialise.
What happened?
Posted by: David Tebbutt at December 17, 2005 3:40 PM
Richard is there a link online to the P&G report referenced in the blog post? Thanks Ged
Posted by: Ged Carroll at December 18, 2005 3:29 PM
Richard, I agree completely that we are in the midst of "tectonic plate" change in the media landscape, and with that, enormous change is on the way for the public relations profession. I also agree that now could be our time. For that matter, now should be our time, as marketing "at" people is being replaced gradually by two-way dialogue, a natural fit for our profession. However, two trends temper my optimism: 1) I don't see yet widespread understanding of this change within the profession (on the client or agency side) and 2) clients and employers have unfortunately misdefined our profession so narrowly around traditional media relations that we have a lot of convincing to do before we will find acceptance in this new, broader world. Feeling that the future is now, I started a blog recently about my thoughts on where PR might be headed. I invite you to visit http://marcelgoldstein.blogspot.com/ and I welcome your comments. If enough of us keep talking and blogging about this necessary change, then we can usher in a new era for the public relations profession. All the best, Marcel.
Posted by: Marcel Goldstein at December 19, 2005 10:42 PM
Hello Richard.
I think that one of the most interesting of your observations is the transformation "...from selling to factual, our concept from one big bang to continuous conversation".
It does look as if the current "age" of the internet is all about building affinities, both between business and customer/consumer and business and business. I'm interested in your thoughts about where the point is that those affinities will become coin of the realm.
Of course, even more interesting to me is the fact that the head of a large agency is not just mouthing empty sound bites and actually engaging in conversation via his blog.
Posted by: Andrew McFarlane at December 30, 2005 9:42 AM
Sorry I had a client issue. Am just back from European trip. Glad to see you on next round
Posted by: Richard Edelman at January 4, 2006 11:42 AM
GED
I need to get the piece from Ad Age inserted into this blog. I did speak with the head of research of P&G who confirmed the finding. He told me he did multivariable analysis on six different brands--different spend levels, different types of brands (new products, old products, high and low interest categories). This is huge for PR. DC pls put in link
Posted by: Richard Edelman at January 4, 2006 11:47 AM
MG
Sorry it took so long to respond...vacation and promise not to go on line for a few days I really liked your blog, particularly the Washington Post vs. Washington Post on line story. Is there really any such thing as local anymore? What is the economic model that will work for the on line versions of traditional media? Thanks for reading my blog.
Posted by: Richard Edelman at January 4, 2006 12:24 PM
You call it affinities, I prefer relationships. Why? Because the word relationship implies a trusted connection that lasts. And yes I like these on line conversations.
Posted by: Richard Edelman at January 4, 2006 1:19 PM
Mr. Edelman-
I recently did some research into online communities/social networks and posted my thoughts on my blog (justin.prblogs.org). I would certainly welcome and appreciate your opinion on the subject since I know it's something that you think will be big for PR in the future.
Posted by: Justin Estes at January 17, 2006 10:20 PM
I just came across this blog post, and realized it is from Dec., 2005. I visited Germany in the late 80's prior to the fall of the wall, and this sent shivers down my spine.
I think the German people are a proud group, and I was wondering if you have information (first hand) as to how Berlin is doing now? I don't hear anything on the U.S. news, and I have not been back to Germany, although I would love to travel there.
Cheers,
Chris
Posted by: Chris Anderson at May 4, 2008 8:27 AM