The conundrum business magazines and newspapers face is that their readership is increasing online yet their revenues are falling. Usually both rise. The problem they face is that online advertising fetches less money because advertising itself is not very effective. In the print world it was difficult to measure the effectiveness of advertising. Everyone knew that half of their advertising spend wasn't working but it was difficult to determine which half was which. Online it is very easy to determine which half isn't working. That reduces overall advertising spend for a company. And it can also mean that it is more effective to advertise next to a search box, such as Google's than next to a column of journalism. If you are on Google, you are looking to buy or find something. If you are reading a column of journalism you are likely not looking to buy.

Advertising in business magazines online or offline will in most cases be less effective than advertising on search sites, or other types of sites. And this broader competition for ad dollars online means prices will always be low for ads. So then what will support the work of journalists? It'll have to be subscriptions.

In terms of PR, more bang for the buck may come from social media, blogs, etc. Having an article in Business Week may yield less potential revenue for a client than astute targeting of social media and blogs. But that takes a lot more work and there are many in the PR world that chafe at having to do more for the same amount of money.

I will wager Jeff Jarvis dinner at the New York restaurant of his choosing that his publisher has done traditional PR about his book. Prove me wrong Jeff, make me pay up!

I can answer the question, "What Would Google Do?" for me anyway: It just allowed me to stumble across your blog. How are you, buddy? It sounds like you're still bringing your A game. Nice to read your reference to Dan Edelman. All these years later, and I can still remember things he said verbatim - what a personality.
I'm still writing for radio and television. I had a joke on Leno last night: "Michael Phelps won't be charged for smoking pot. He had quite a lawyer. The lawyer said the bong just fell in the pool and Michael was giving it CPR." Ba-dum!
I'm siding with Rick: PR folks are better off than lawyers.
---Bill McDonald

Richard - the relevance of the PR practictioner depends on our ability to add value apart from the media model, certainly the fashion you describe is one way of doing so. Mr. Jarvis' perspective isn't new -- though it does seem (I haven't read the book) rather devoted to the "Internet changes everything" perspective. There is still a need for authoritative information -- however, that authority must derive from transparency and experience that can be independently verified. Our value continues to move away from press agentry toward communication expertise applied to problems and issues. Because that migration still encounters resistance, Mr. Jarvis and his fellow travelers will continue to find a sympathetic ear among those frustrated with the traditional models of PR and its political shouting, spinning and opaque activities that generate so much ink about our profession.

Richard, though I have not read Jeff’s book (yet), I think the idea that the Internet and web 2.0 has increased the consumers’ leverage in the communications process has serious merit. However, I agree with you that the PR industry has not, and should not, take a back seat during this evolution.

A perfect example is the recent news that PepsiCo America announced plans to revert back to Tropicana’s old packaging after the company was inundated with negative feedback about a switch in design. With the popularity of blogs, microblogs and social networks growing daily, every consumer is essentially an instant focus group and journalist in one, as pointed out in yesterday’s New York Times article. Moving forward with these types of audience, I find it hard to believe companies minus strong communicators will be able to manage such dialogues to the benefit of both parties.

Sustaining true two-way communications with the customer is becoming a central part of every practitioner’s responsibility. I’m glad to see you take a stance against those who might not see the importance of the industry’s role in the conversation.

With any/all respect due to Mr. Jarvis, he's trying to do nothing more than sell books, get ratings, maintain an audience.

While I'm sure some or even a significant number of so-called PR professionals fit Jarvis' description, most do not. I am confident of that, and this age of social media makes it harder to "pull one over."

Jarvis' viewpoint is extreme, and one he needs to continue to promote to keep him front and center in talks of media and related subjects.

For the vast majority, those in public relations are honest, ethical and more are growing to be transparent.
-Mike

Richard -

If Jeff was really drinking his own Kool-Aid, he wouldn't have printed a book at all. After all, ink and paper are antiques, right?

He printed the book because the traditional publishing business -- while not as lucrative as before -- is an effective business model that helps him pay his mortgage and build his brand.

Jeff is a thought leader who takes controversial stands because they generate interest, conversation and respect among many of his followers. You effectively countered his arguments, Richard.

Companies will thrive by doing what Google does: adapt their approach to customers and markets to take advantage of the massive disruption and disintermediation taking place across the globe, in PR and just about every other industry.

Dave Armon

Contrary to Jeff Jarvis' contention, social media are finally allowing public relations to come into its own. Direct, transparent communication with stakeholders is not only increasingly possible, it is increasingly essential.

This is strengthening our arguments to our clients/bosses to move toward the two-way symmetric style of communications. This style has always been the most effective, and not just in theory -- educated practitioners have been proving it for years.

What IS on the way out is the conflictual, secretive, confrontational style of communication practised in politics -- the one journalists seem to recognize most readily (because the other kind happens quietly while they're not looking) -- and yes, the one most lawyers practise.

For public relations professionals, this is an exciting new era, and one in which we at last have the chance to cast off the unrepresentative old image of spinning and whitewashing. Power to the people!

As a lawyer, I have to say, PR folks rarely know what they're doing. It is our job to protect our client's best interest. Trying to explain legal matters to communications people is like trying to teach addition to a cat. The PR folks want to "help" us, but by how? Right, ignorantly making things worse. I suggest the vast majority of PR folks go back to school and get a degree in something other than beer pong. They could sure use some real skills.

Richard - Your points are prescient, and to the matter of those receiving government funds, numbers one and two on your action plan are all too easy to achieve, even under "old school" rules of corporate conduct, yet I don't think we'll really see them, unfortunately. This to me, is proof positive of the traction that public relations counselors can truly gain and affect as the internet, society and business move forward. With today's and tomorrow's increasing transparency, and the 24/7 news cycle, all of these items will count for more, and it is the guidance of PR counsel that will lead them. Best Regards, Steve

Richard, a "Spring Training" visit back to the work of Peter Drucker would be well worth any organization's time and effort in these remarkable times. Your 4 points certainly are critical to restoring trust between all the stakeholders, including employees.

However, core processes also need to be re-instilled. Drucker's Management by Objectives (MBO) was a straight-forward, no nonsense metrics approach to business. Each manager's tasks must roll forward into corporate goals (imagine the government working in such a way!).

When we realize he formulated his tasks for the manager of the future over 40 years ago, their prescience is shocking. They include:

- take more risks for longer

- be able to build an integrated team, each member of which is capable of managing his or her own performance in relation to the common objectives

- be able to communicate information

- be able to see the business, and the industry as a whole and to integrate his or her function with it.

If management is about process, leadership is about dreaming. When our business leaders start to truly dream of what they might be capable, they begin the process of consistent visionary communication that is the emotional glue binding followers and leaders.

We need to revisit the institution of work as a place for dreams, self actualization and great group accomplishments.

I feel we are in unchartered territory in this financial decline. Only two years ago all the financial pundits were predicting more increases in asset prices and very few predicted the current decline, this makes me very skeptical of any current predictions on the size of the recession.

I seriously doubt that "business" has sufficient collective wisdom to do any kind of all-encompassing restoration of trust. While some will get it, most will continue to see things in short term, defensive, or in the narrowly commercial terms that tend to blot out the courage required to behave differently in this new environment.

The opportunity you describe is available to specific businesses, which build their brands on an understanding of trust and accountability. But they will be few and far between.

Attending the trust breakfast in Seattle this AM and hope you will address the role of the conventional "free" media in fostering or
fettering clean "explanations" of policy.

I'm the tall guy that played Harvard basketball but was recruited by the crew jocks every time he crossed the yard.

Enjoy the blog and appreciate you practicing what you preach.

Too bad you have not provided real insights or original analysis. Most of this coverage has already been given elsewhere.
And it's a stretch to link PM Erdogan's stance to the risk of civil unrest in these 4 countries.

I find all the talk about "new capitalism" and a "new relationship between government and business" to be over-inclusive and distorts what really occurred over the past 24-36 months. The principle problem is a finance system that does not function properly. There is a "new relationship" between government and finance, not between government and business. With the exception of the auto industry (whose problem have been well documented), American businesses are competitive, self-sustaining, and completely undeserving of a "new relationship" with government.

Think relocalization rather than protectionism. If the grassroots economy isn't healthy, Wall Street will never be.

I think advertising destroys trust and causes cheating. Let's just kick the habit.

Gender parity would mean paying mothers more than plumbers.

Thanks for the post, Richard. I'm receiving many emails in my inbox regarding the latest PR conference on how to "tweet," Facebook and bring more bling to company profiles. Social media is a terrific PR tool, but I'm wondering why there's not more discussion, as you're offering, about how comms experts can help in the current economic crisis. As we watch institutions fail, people lose their money, homes and jobs, is the comms industry doing its part? Seems there's a lot of excitement in PR circles about the medium, but not the equivalent emphasis on how we can help in these tough times with a good message. We're in a position to help our clients broadcast responsibility, engender trust and encourage consumer confidence -- but are we doing so? Would love to hear your thoughts.

Richard,

Regarding Protectionist Threat you mentioned in “A Different Davos”, the U.S. using buy American provisions to retaliate against unfair trade practices, real or imagined is comparable to using a water pistol against a flame thrower.

The text of my response to the Bloomberg article "China's Power Erodes Free-Trade Support in Developing Nations"(http://forum.themarkettraders.com/read-m/9/5730) published over 22 months ago, follows:

Your article "China's Power Erodes Free-Trade Support in Developing Nations" was
of great interest to me, as I am very interested in seeing trade issues properly vetted.

The article causes me to suspect that China’s short-circuiting the laws of economics has a pervasive adverse effect beyond the U.S.-China trade issue.

As the Chinese currency is being held relatively steady versus the U.S. Dollar while most other currencies are rising much more against the U.S. Dollar, relative to Non-U.S. Counties, the Chinese are:

- Keeping China’s exports to the U.S. cheap relative to exports from other counties with rising currencies, thereby depriving Non-Chinese Exporter of fair-trade.

- Keeping China’s exports to Non-U.S. Counties also cheap, since the Chinese currency is not permitted to rise to an equilibrium level against any currency.

- Causing China’s imports from Non-U.S. Counties to be expensive, again thereby depriving Non-U.S. Counties of fair-trade.

While the U.S. Legislative and Executive Branches are focusing on the urgent and important issue of Iraq, China is using the distractions of 9/11 and Iraq to gain an unfair and perhaps irreversible advantage over all its trading partners, bar none!

If the Chinese ultimately monopolizes trade on too many fronts, the neglect of the China Trade issue may overshadow Iraq and become the number one political and economic issue of the 21st Century.

Unfortunately, the events since April, 2007 have substantially reduced the U.S.’s ability to remedy China’s currency policy. If my hypothesis is deemed credible and enough trading partners exert pressure before the WTO, perhaps China will not ultimately monopolize as many industries as they otherwise could have.

I am unhappy with the thought of using the stakeholder model.

What Freedman came up with long after the model by Grunig and Hunt is not up to the job needed now.

Indeed, the stakeholder model may be as much part of the problem as the solution.

The idea that the stakeholders approach is a wide enough corporate response to the broader constituency is a clumsy tool.

In a time when user generated social groups form 'on the fly' and 'user generated brand values' are evident online (very often at odds with brand managers' perspective), the model that is closer to the needs of organisations is one that begins by identifying 'publics that form round issues' as Grunig and Hunt would have it in their excellence model.

As a model it also offers more to shareholders in that it identifies issues, brands values and interests in natural discourse.

It is these publics and their insights, opinions and recommendations that are the real drivers of relationships and trust.

We have to take the broad view and include the experts, media and word of mouth into consideration. It is a tough call for the PR industry but one that it has to take on as it shrugs off its media agentry milch cow in favour of broader, more professional, public relations consul and services.

I am always struck by how organisations have detractors of many hues who, when a catalytic issue occurs, focus in on it and blow it up, often out of proportion. Such events are a reflection of broader reputation more than the issue itself with a coalition of diverse publics coming together in focused criticism and or direct action.

This type of interaction is not of stakeholders but of many and divers publics.

Most people use banks and many have small niggling issues with them. Having burned up goodwill on the niggling issues, most banks now face huge reputation and trust issues (even among themselves) that will forever change their structures and how they trade. This will affect core business and traditional banking as well as the financial trading side at huge cost to shareholders but cheered on by a mass of disaffection coming from many quarters and over many issues. Yet, customers will, day by day, use the services of banks.

Transparently managing the small issues is really important and right now, for bank shareholders, the only chance they have of getting any serious return on their investment. It is the only way they can re-build effective two-way relationships and through them, trust.

Banks also have to resist the political smart fixes if they are going to detract from this work and from, admittedly a comparative position of strength, Barclays has this decision today.

I hope their PR advisor's are up to the job.

Not glamorous, no big headlines, not beneath the attention of main board members, not a vote catcher for the politicians, but great PR.

Richard,
Many thanks for sharing this.
Some thoughts as I read:
“…We must prove that markets have not failed and acknowledge that there was not sufficient regulation…”
I agree with the first half of Mr. Lambert’s statement, but might disagree with the second half. One could argue that the chief problem was that regulations that were in place had few, if any, teeth, and the people in charge of enforcing them were either 1) asleep at the wheel, or 2) willfully ignoring the transgressions for various political reasons.
In the U.S. alone, the Federal Register is at an all-time high at 78,000+ pages. There’s certainly no lack of regulation, though there is apparently a great desire to have more.
The number of regulations costing $100M or more has risen 70% since 2001. The cost of regulatory activities during the Bush administration (inflation adjusted) increased 62% from the beginning of his term to the end, cresting at $42B+. (This during a period loudly proclaimed as an era of excessive deregulation.) Bush also added 91,000 people to the regulatory enforcement payroll; Clinton actually shaved almost 1,000 – figures that are quite in contradiction with the stereotypes ascribed to each president’s party.
(I need a hobby. Clearly. My source for the above is an article by Veronique de Rugy of George Mason U.)
In a comment almost too comical to be on Saturday Night Live, Russian Prime Minister Putin warned the US Government of the evils of excessive state intervention in free markets.
Indeed!
Even funnier, I thought, was the toe-to-toe that he had with Michael Dell: http://www.youtube.com/watch?v=OMR1BZ9aYM8
Another is a German auto supplier which stopped providing free beer in the canteen to workers, who subsequently lost weight and their general health improved.
Well, yeah, but do they have as much fun? *8-)
Again, many thanks for sharing. The Trust Barometer has also ignited a fascinating email discussion with Thomas Zengage, whom I had the great pleasure of meeting last November.
Best,
/pmg

Dear Richard,

I am Aditya from IndoPacific Edelman, Jakarta. Hope you remain optimistic despite the dissapointing Davos'.

I just have a few comments if you don't mind after reading your observations:

1. Nooyis' comment that main street companies are guilty by association is most intriguing. I believe there is not one type of main street companies, in terms of business moral and responsibility. Companies like Pepsi, Unilever, and Nestle for instance must be praised for their belief that their worldwide growth hinges on their ability to grow with the local people, in the local way, for the local economy. Unilever goes a long way indeed when it decided to list local Unilever units at local stock exchanges. When I attended the Young Leaders Forum of the World Economic Forum in Tianjin November last year - a satelite event to Davos - Unilever APAC CEO surprised the audience when he said "THINK LOCAL, ACT LOCAL, THEN ONLY ONE IS GLOBAL". Many mistakenly "THINK GLOBAL, ACT LOCAL".

2. Growth vs Development. The world economy must admit that it has overlooked the importance of national developments in each member country and it has overvalued collective growth. The latest book by Boston Consulting Group "GLOBALITY" rightly recognizes the emerging trend that emerging market companies will not only become global players but also very strong and more sustainable ones because they keep building the distinct capability from winning their respective "tough" local markets. Arcelor Mittal, Tata, San Miguel, BUMI Resources are only a few examples.

The next growth cycle for world economy will be Asia driven combined with the opening of more African markets. Yet the voice of Asian and African were hardly heard in Davos, which I believe is a crucial misstep.

A real discussion must begin about trade for development and investment for development, replacing trade and investment for growth. For this to be effective a new relationship must be charted not between government and businesses, but between gov, business and multilateral organizations.

World leaders shouldn't start with asking what we have done wrong, but just ask what we have not done.

Sorry to get over excited with my comments. But that's just what I think.

Thanks Richard,

Regards

Aditya

Always finding your rather neutral summary of Davos worth reading Mr. Edelman. Thank you. Just wondering, did someone from your company cover the Belem conference as well ? Is so, could we read a feedback ?