PR Titan Edelman discusses the following, revealing facts:
"* 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. (Editors Note: You might say this defies the Long Tail theory. Actually, it doesn't - half of the ad revenues for Google and its ilk are actually redistributed to thousands of smaller sites, via such affliate models as AdSense. It's actually a quite good long tail example.
* 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."
Just a few thoughts:
How can PR professionals innovate and lead? PR might rethink their model and focus on developing communities. Social networking has produced mass sites like Friendster, Myspace and Facebook. But that's just the beginning. Private social networks pop up every day and they are here to stay. These might not be flashy sites, but they are relevant, they deeply engage the consumer and they tend to keep Marketing and PR out of the conversation.
In the world of Wikinomics,journalists, publicists, bloggers and consumer might think about forming a community who share a common interest in a brand, an industry or a topic. There a technological solutions out there, and Marketing as well as PR professionals should speak to companies like Passenger and Communispace. What about an online community of journalists, publicists, bloggers, users and others who share an interest in a company, an industry or an issue? Communities like that might create a microcosmos that represents exactly the communication that needs to happen. And the discussion and interaction we need to observe and listen to.
Clearly, the brand/client does not own messaging anymore and they need to understand that messaging is now in the hands of consumers. Giving up control is a hard thing to understand. It's even tougher to implement new ways of dealing with this monumental change.
The old media distribution model is dead and brands need to understand that we live in a new world of media consumption. Brands have to be where the consumers are and, increasingly, they don't tend to watch TV, listen to radio, read the newspaper to engage with a brand. Consumers are watching TV to get entertained, they listen to radio to hear music or talk, and they read the newspaper to get information. Brand engagement and discussion happens on a different level and in different channels: on blogs, on messageboards and on social networks.
The only way to deal with this monumental change is to embrace it. Online communities are out there. Every brand should beat down the doors of those online communities and get in the game. Because the game is not where it used to be.