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February 3, 2006

Davos Conversations on the Future of Media

I've just returned from the World Economic Forum in Davos, Switzerland. This was the first year that I was part of the Media and Entertainment Governors group. We also met with the Information Technology Governors, and I thought you might be interested in some of participant's keen insights:

"The future is in our hands as journalists. We are in the business of making something special out of a commodity. We are not in the distribution business. We create a beautiful product which consumers are willing to pay for."
-- Mike Oreskes, editor, International Herald Tribune

"The future of news is shifting online. The crowd has come on the field and is trying to get into the game. We need to be open about our news judgment. Our tone must be real, as too much of what we do feels fake."
-- Richard Sambrook, editor, BBC

"The value of news is based on trust. What you produce must be respected. Journalists are in the securities business where success is based on innovation, while aggregators are in the derivatives business. We have a civic and business role."
-- Lionel Barber, editor, Financial Times

"We are a digital company that has print as well, but our business model remains too reliant on print. The web has been benefiting aggregators, which does not play to our strengths. But the web is moving to communities--look at dating sites. This is our sweet spot. If we add citizen journalism and a list of best blogs by topic, we will build communities."
-- Arthur Sulzberger, publisher, New York Times

"Who is the biggest distributor of content? It is the consumer, who does not expect to be paid for this service but wants free in kind services. We also need to enhance individuality within each community."
-- Tom Glocer, CEO, Reuters

"There are five forces pushing the consumer to be involved with on-line media. Self expression/self publishing; Aggregating to relevant people; Sharing; Collaboration; Knowing where you are in the pecking order."
-- Yossi Vardi, venture capitalist, creator of instant messaging

"There are four relevant media models: One-to-Many; Many-to-One; One-to-One; Many-to-Many. Of these, the One-to-Many or Broadcast model is the only one going down. The hot space now is Many-to-Many, the community of friends that is MySpace or Facebook. This need to express yourself is the defining experience for our future customers who are photo and blog driven."
-- Nandan Nilekani, CEO of Infosys

"The new distribution system for media allows customized content when and where the consumer wants it, in multiple formats that allow integration across platforms. Distribution windows are collapsing--you cannot hold films or other properties for staggered launches."
-- David Stern, commissioner, National Basketball Association

"With every interface, the content must change. We need unique ways of storytelling."
-- Hubert Burda, chairman, Burda Media

"User generated content is the killer application. This new form of editorial is as authoritative as traditional media because of its authenticity and creativity. The definition of trusted content is changing based on consumer preference."
-- Brandon Burgess, CEO of Paxson Media

"We are creating unique short form content for mobile phones, with two minutes as ideal length. Advertising will be based on request, not interruptive."
-- Bill Roedy, president, MTV International

"Not all content wants to be free but it needs to be easy. We allow people to find the content they want. There is a big market for the best, not just the cheapest."
-- Sergei Brin, founder, Google

"We must move from cool devices to cool experiences. The lack of open interfaces and standards is a block to what the consumer wants which is my personal content. The Internet will follow you instead of you following the Internet. Everything you can do today on a PC you will be able to do on a cell phone by the end of 2006."
-- Ed Zander, CEO, Motorola

"We are moving beyond cell phones to mobile devices. Eventually each customer will have six to seven devices, each optimized for different experiences. For example, you will have a small device with excellent audio for jogging, a large device for watching content downloaded from broadcast. Customers will transition throughout the day."
-- Paul Jacobs, CEO, Qualcomm

"Advertising will look different. It will be location based and segment based. It will be solicited by customers who can be tracked by Global Positioning Service. We believe in an open garden approach, with collaboration with all players in the media and technology industry."
---Sanjiv Ahuja, CEO, Orange

"We are at the forefront of a new advertising approach. To launch one of our new models, we created a video with Brazilian football star Ronaldino, doing tricks with a ball. It was downloaded directly 12 million times, aired in every market in the world on news shows and passed virally to millions of consumers. This is an inclusive approach, based on community and experience. The key currency is being up to date."
---Charlie Denson, president, Nike Brand

In summary, my own view is that we, in the public relations profession, need innovate and evolve faster. We need to get moving on designing content for mobile devices. Content that is short and visual. More of our programs need to be premised on story telling that directly involves consumers, and all audiences, because it is authentic and powerful. We have to facilitate the creation of community, for example a drug company with a product for specific disease that enables conversations among patients and their families. We can support traditional media by appending video or other digital material for their online versions, which are increasingly being integrated in a single newsroom for all channels. I truly believe our challenge is to innovate faster. In a world of increasing media fragmentation; on demand delivery across platforms; and of consumer generated content - how can we build a business model for PR?

Posted by Edelman at February 3, 2006 12:10 PM

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Comments

Richard, this is fascinating stuff, and it stimulates me to ask a naive outsider's question. Traditionally, public relations was mostly (in very high percentages) about reaching the clients' audiences through intermediated media (journalists, etc.) There was always a lot of both standard and creative non-intermediated PR (events, direct mail, etc, etc.)but I have the impression thatthis was a lower percentage in past times.

My outsiders question (sorry if it's dumb)is this: what percentage of PR fees today (compared to yesterday) are spent on intermediated PR, and given the opportunities that hyperspace now offers, what percentage do you think it will be in three years? Five years?

Don't the trends you report mean that PR just doesn't NEED the media anywhere near as much as you did before? Are the days of "working" the journalists on the decline? What does THAT say for your business model?

Posted by: David Maister at February 4, 2006 8:04 PM


Those are really encouraging and inspiring quotes!
Thank you!
=)

-Joa

Posted by: Joa Kim at February 5, 2006 7:03 PM


Though it is an excellent question, I am not in a position to respond with any data about historical trends in PR fees.

I would like to raise another thought that I assume has already been brought up elsewhere, but occurred to me just now. Is it not appropriate to correlate the rise in credibility of bloggers with the findings of Edelman's trust survey that "a person like me" is the most trusted source?

One challenge, in addition to expanding PR practices into new media like the 2-minute mobile VNR, will be to use the growing influence of social networks like MySpace, Facebook, etc. to seek out the "person like me" credibility. The algorithms and underlying technology of these networks already do the demographic footwork, key to success will be adapting the message. Furthermore, since MySpace and Facebook have attracted millions of investment dollars, their business models are moving in the direction of sponsored initiatives.

Eric Hansen
Student (PR/IT)
Newhouse School, Syracuse University

Posted by: Eric Hansen at February 8, 2006 9:12 AM


I am a corporate communications student at Southern Methodist University, and instead of a comment, I am posting a question for you. I was wonderng what you think are the best ways to get ink on your clients. This topic came up in my advanced communications skills class, and I wanted to hear the opinion of an established PR professional.

Posted by: Jessica Jackson at February 8, 2006 2:27 PM


Dear Mr. Edelman,
I am a junior at Southern Methodist University studying Corporate Communications and Public Affairs. I came across your blog today and I am really interested in your opinions on Public Relations. I am in a class right now where we are studying blogging and how it is affecting the PR world. I was wondering if you have any stories or tips you could share with me about getting clients good exposure. What do you think are the best, cutting edge ways for "getting ink"? I would love to hear from you and I would really appreciate any opinions or comments you may have about this topic or any others. You can write me back on my own blog at www.beccaburnitt.blogspot.com. Also, please feel free to check out our class blog at www.smuccpaclass.blogspot.com. Thank you so much and I look foward to hearing from you!

Posted by: Becca Burnitt at February 8, 2006 5:38 PM


Below is my "Fishwrapper" column this week for our group's newspapers. It involves an Edelman client, Wal-Mart, so I thought it would be of interest. It's written for a mass audience, not communications professionals, but it addresses changing strategies.

John


Fishwrapper
Evangelist for the Church of Wal-Mart
Spokesman puts out positive spin for the mega-merchant
By John F. Sugg
Wal-Mart is … well, it’s huge. And blue. Ubiquitous, too. How big? In Georgia, 97 Supercenters, 17 discount stores, 21 Sam’s Club and nine distribution centers employ 52,728 folks, as of last month. Another 105,805 supplier jobs are created by Wal-Mart.
Each one of those Supercenters dotting the landscape churns through about $140 million a year in cash register cha-chings. Add it all up — 3,800 facilities, 1.6 million associates, and $285 billion in worldwide sales last year. Whew!
So, like it or not, Wal-Mart simply “is.” Not all of the lawsuits, not all of the union activists, not all of the “evil corporation” documentary DVDs for the MoveOn.org folks, not all of the carping liberal columnists (Who? Me?) are going to wipe Wal-Mart off of the globe.
Now that we’ve got that straight, here’s my confession: Yes, I shop at Wal-Mart. I’ve got five kids. You figure.
As Michael Mills — we’ll come back to who he is in a minute — says, “I can get my organic lettuce, have my car’s oil changed and buy a widescreen TV all at one stop. You can’t beat that.”
I’m a hypocrite, too, often chiding the world’s largest retailer for squeezing the life out of small-town businesses, for pushing its employees’ kids onto public health care programs, and even for being chintzy in spreading its advertising dollars to, um, weekly newspapers.
Taking shots at Wal-Mart in the past wasn’t much fun. The giant seldom noticed detractors’ Lilliputian darts. Sam Walton, the man who put the “Wal” in “Mart,” frequently opined from his Bentonville, Ark., Mt. Olympus that his stores were the best public relations. People could easily find out the truth about the low prices and abundant merchandise. The company’s focus was directed inward, tuning the efficiency machine to a screaming penny-pinching roar.
Times change. Wal-Mart ballooned so large, it drew attention for more than its prices.
Were wages too low, and health benefits skimpy? Did women and minorities hit glass ceilings? What about those pesky reports of illegal aliens being hired to clean stores? Were local retailers sucked dry by the blue vampiric monster skulking on the edge of town? And with shelves stocked from China, whatever happened to “made in America”?

Let’s meet Michael Mills, that organic lettuce guy I mentioned. The new “face” of Wal-Mart, Mills is 32, with twinkly blue eyes, a natty blue blazer and a never-flagging, big-tooth grin.
He talks the environmental talk, having toiled on such sacred-to-the-left issues as the Kyoto Protocol on climate change. He wants buildings constructed with more attention to energy and conservation — and actually thumped his chest when he reported two new Wal-Marts were built last year conforming to such stringent standards. He tutors kids at risk for dropping into the pit of poverty and despair. He’s been active in the League of Women Voters and has labored on get-out-the-vote drives with a group headed by Rebecca Lieberman, the daughter of Sen. Joe.
Hell, if that isn’t enough, Mills beams about his latest project: “I’m starting a record label,” he says with a bit of uncharacteristic shyness. “It’s called the Barefoot Mailman, and we’ve already got our first performer lined up.”
This is not the corporate spokesman of bygone days. Wal-Mart, until about two years ago, epitomized the worst in company communications. Responses — usually in the form of ponderous pronouncements — rumbled from faceless execs in Bentonville. Problems were always discounted, without much evidence or logic. Questions were rebuffed. And Wal-Mart became a punching bag for unions, some politicians and reporters.
Two years ago, Wal-Mart began launching return volleys. It set up a website (www.walmartfacts.com) that touts its achievements. “We gave $24 million to Hurricane Katrina relief, and when we do something like that, we’re going to tell people,” Mills says. “We did good things 10 years ago, too, but we could have done a better job at getting the message out.”
Mills earned his spurs in the piranha pool called Georgia politics. A Rochester, N.Y., native, he graduated from Georgia State University and landed a job as a legislative aide to a cabinet officer. In 1998, he signed on with Democrat Mark Taylor, who was running for (and won) the lieutenant governor’s race.
“It was a brutal time,” Mills recalls. Taylor ended up suing an opponent for libel over ads claiming Taylor had used drugs. In his first recorded response to a hardball question, Mills reacted to an opponent’s broadside by telling the Augusta Chronicle in September 1998, “Maybe, um, I don’t know ... we have no comment.” Not an awesome start as a spokesman.

Mills is no longer tentative. He’s been with Wal-Mart for six months, and his portfolio has expanded from Georgia to include seven Southeastern states.
One of his early assignments was to meet with an environmental group. “They wanted to know why we flatten so much land. It was 45 minutes of getting beat up.” But Mills and the treehuggers found some common ground. As a result of the meeting, Mills had many non-indigenous “predator” plants pulled from stores.
“It’s easy to sleep at night,” he says while sipping latte at a downtown Atlanta Starbucks — and looking like he could be the urbane, hip, wired poster child for the coffee dealer. “I know, I know that there are a lot of good things we’re doing, and to me it’s a lot of fun getting that word out, breaking preconceptions.” As an example, Mills handed out $8.5 million in charitable contributions in Georgia last year — this year, he’ll be playing Johnny Appleseed around the Southeast.
Or, he beams, “We’re expanding by 20 percent our fleet’s mileage, and we’ve put in place a program to reduce waste at stores by 25 percent. How can anyone argue with actions like that?”
Critics contend their anti-Wal-Mart campaigns are muscling the company to change. Mills shrugs at that suggestion, saying the company is responding to its own associates more than anything else.
He confronts criticism head on. What about all of the kids of Wal-Mart employees who end up on taxpayer-paid-for health care programs? Mills answers that Wal-Mart has 18 new insurance programs, beginning at $11 a month, with all a family’s kids taken care of for 30 cents a day. “Thirty percent of our associates didn’t have health insurance before they came to work for us,” says. “I like to talk about the 160,000 that have been taken off the rolls of uninsured.”
Low wages? Mills: “Pay is competitive” with other retailers, and average income is double the minimum wage. Dead-end jobs? “Our regional vice president, Tony Samples, started 30 years ago pushing carts for one of our stores. Three-quarters of our managers started as hourly associates.”
As for killing small business, Mills points to the growth of new retailers around Wal-Marts — and mixed-use residential-retail projects at many urban centers. “Retail is changing,” he says. “We’re part of that. Some people want convenience and price. Others want something else. The mix will be different than today, but there will be room for everyone.”
Mills is evangelical in his zeal. I don’t convert easily. But I’m thinking about attending Mills church this weekend for a sermon on low-priced big-screen TVs.

Senior Editor John Sugg’s blog is at www.johnsugg.com. He can be reached at john.sugg@creativeloafing.com.

Posted by: John Sugg at February 9, 2006 10:48 AM


Wow, impressive initiatives on Wal-Mart's behalf. Thanks for sharing the article John. So, what is Edelman's relationship with Mills? Is most of their PR done in-house, or does Edelman handle it?

Eric Hansen
Student (PR/IT)
Newhouse School, Syracuse Universit

Posted by: Eric Hansen at February 10, 2006 3:37 PM


Eric, my colleague Kevin Cook runs the Mills program from Chicago office.

Posted by: Richard Edelman at February 13, 2006 1:11 PM


Eric, As Richard noted, for Edelman this is a national account. I didn't deal with the account supervisor in Chicago. However, I did rely on the Edelman office in Atlanta, specifically Howard Lalli, a senior VP. I've known Howard for several years (I was his editor when he wrote an excellent media column for my newspaper). Without getting too effusive, the teamwork of Howard and Wal-Mart's Michael Mills was a model of how media relations should work (and I owned a PR and marketing agency in Miami for years, so I know both sides of this street). I sensed a contrarian story about Wal-Mart, called a public relations professional I know and trust (Howard), and asked him for help. Howard expedited getting me background material, and set up the meeting with Michael. I wasn't doing a "puff" piece, and Howard knew that. He also knew that I wasn't going to snooker him with promises of a smiley-face column, and then butcher his client. Michael was more than I could have hoped for -- a very likable straight-shooter. My column addressed the criticisms leveled against Wal-Mart by allowing Michael to speak directly to my readers. It was effective, I believe, for Wal-Mart because Michael came across as very real and believable. The credibility was enhanced because it was my column -- I'm known as a pretty tough guy, so if someone gets my approval, I think people will believe it. Indeed, I heard from several union friends -- who still aren't in love with Wal-Mart, but are at least conceding that the retailer is taking many positive steps.

John

Posted by: john Sugg at February 14, 2006 3:22 PM


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