Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Microsoft's ROI on Robert Scoble - the disruption of PR by blogging

Posted by Tom Foremski - March 5, 2006

By Tom Foremski for SiliconValleyWatcher

It's the last hour of the New Communications Forum and Shel Israel and Robert Scoble are performing their very entertainiing double act promoting their book "Naked Conversations." The room is full of marketing and public relations people--some of them are high-PageRank bloggers themselves.

Both men are promoting the idea that blogging provides corporations with valuable feedback, and it provides an effective message delivery medium, and they cite many examples. This is all very true about blogging--it is an incredibly powerful communications technology.

Robert mentioned a startup company that collected 400,000 beta users in one week from a mention on just a few key tech blogs. I thought it a good time to stand up and join the conversation and make an important point that many people don't understand about blogging.

I said that blogging is not disrupting the mainstream media--blogging will disrupt public relations. The company geting its message out to 400,000 beta users is a great example, and I've been collecting many more.

It's an important point to make because many PR people come to conferences such as New Comm Forum because they want to learn how best to pitch to bloggers and how to use the blogosphere as a channel for corporate and marketing communications as the mainstream media gradually melts away. What few realise is that mainstream media is being disrupted by online marketing--specifically search engine marketing--and not blogging.

It comes down to this simple fact:

It is far cheaper to sell products and services through search engine marketing than through mainstream media.

The millions of bloggers aren't taking any money away from mainstream media...but Google, Yahoo, and Craigslist certainly are.

The inability of the blogosphere to find a business model that can keep the lights on, is similar to mainstream media's struggle to survive. They are both in the same boat (except the bloggers have a day job.)

Let me say it again: Blogging is not disrupting mainstream media--blogging will disrupt public relations.

It comes down to this simple fact:

You can get a company message out to your potential customers far more cheaply and far more effectively through the blogging medium.

However, the company message in the blogosphere cannot be delivered by hired communicators. It has to come from the people inside, or close to the company, who are passionate about the company and its products. It has to have an authentic voice. You cannot fake an authentic voice.

Therefore what role can public relations professionals play in this new world? They cannot be "authentic-voices-for-hire" because that doesn't work in this medium. (Try it and you'll see...it will look and smell fishy.)

Look at Robert Scoble--who I sometimes describe as Microsoft's second most powerful executive. This A-list blogger has single-handedly spruced up Microsoft's public image in so many areas. And he continues to be Microsoft's best promotional engine because he is passionate about his job and his life and that reflects well on Microsoft.

The value of the positive PR that Microsoft has managed to reap from Mr Scoble's authenticity, his passion, and his stellar PageRank--must easily be in the tens of millions of dollars--and that's a conservative estimate. I would estimate his software engineer salary at about $200k--so that's a pretty damn good ROI.

As the Robert and Shel lunchtime New Comm Forum show started to wind down, I realized a delicious irony: I'm sitting next to a senior executive from Waggoner Edstrom--Microsoft's long standing PR company. Wagg Ed receives many tens of millions of dollars from Microsoft for PR work.

Robert is a far more effective communicator than Wagg Ed. Okay, he doesn't write press releases, but you can see the point I'm making. (If Wagg Ed were to be benchmarked against Robert...!)

This is why PR in its current form is becoming less relevant and less effective because of blogging and its technologies.

Yet just the opposite seems to be happening: PR companies are hiring like crazy--one PR exec told me, "it's just like 1998--we are paying ridiculous salaries to try and recruit people."

That's why the coming fall will hurt because the economics of communication through the blogosphere are at least a factor of ten less expensive than through traditional PR. It just hasn't hit yet--but it will.

When the PC industry started forming in the early 1980s the mainframe and minicomputer companies were doing better than ever. But eventually the economics of the PC caught up with them and they were the victims of a disruptive innovation.

Blogging is a disruptive innovation; I define a disruptive innovation as something that is so powerful and happens so quickly that companies cannot get out of its way. They can see the train-wreck happening right in front of them and they can't get out of its way. That's what happened to all those minicomputer and mainframe companies--even IBM barely survived the disruption from the PC--it had to reinvent itself as an IT services company.

Blogging is a disruptive innovation and the PR industry will eventually see the train wreck happening in front of it and not be able to get out of its way.

Traditional PR won't go away but it will shrink considerably--just like mainstream media. It will be replaced by something else--I might tell you what that will be if you if you ask me in person :-)

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(tag newcomm)

I met the very impressive Denise Howell at Newcomm, she is a lawyer working in some of the grey areas kicked up by blogging--and she is also a blogger: http://bagandbaggage.com/.

Please read her post on advertising--it is an eloquent way of describing how blogging is changing things in marketing.

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