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

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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By Tom Foremski - March 5, 2006 | Permalink | Comment | Category: Media Watch
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Comments (12)

Tom,

Could you perhaps say a bit about how branding will be affected by blogging and online marketing? I hear a lot of discussion about marcom and advertising but I am still rather fuzzy on the branding scenerio going forward. Thanks.

-Doug


Tom Foremski - Silicon Valley Watcher [TypeKey Profile Page]:

Marketing and advertising and PR all work to support and define a brand. And brand is a media brand and media brands take a long time to become established because the relationship is built on trust and trust has a time component.

To the extent that blogging and its functions change the costs of marketing, it will also make it less expensive to develop a brand. But I'm not sure if you can develop a brand more quickly...?

What is clear is that in internet 1.0 we thought brands could be built quickly by throwing money at the problem. This time, money alone does not work as effectively as money + reputation and the actual delivery of the promise of the brand. And you'd better not mess up on the promise .. :-)


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

For many -- esp. for most -- companies, that won't be true for a long time. Look at the stats from Pew and others: Blogging is still in its infancy in pentration. It's even younger when you look at its impact across the wide business spectrum.

Yes, blogging is growing. But, for most companies, it is not an effective marketing tool. Like with your suggestions for PR, one cannot throw a blanket statement out there and expect it to cover all or even most cases.

The smart PR pro, marketer, etc., will see what his/her company or clients need, then develop the plan best suited to accomplish those needs.
-- Mike


Tom Foremski - Silicon Valley Watcher [TypeKey Profile Page]:

Mike, yes, blogging is in its infancy, in fact, it is even younger than that. I'm just pointing to the future and you all can make it at your own pace :-) I hope I can give some of you a leg-up!


Tina Lang-Stuart:

Oh Tom, it's always a pleasure reading your "devil's advocate" posts! First the press release is dead, now it's PR all together! (Bad news, since I just got a new job in PR.)
For one reason or another, you don't seem to think that PR people have the guts, foresight or passion to adjust and embrace PR 2.0. Come on, the whole blogosphere, CGM, viral marketing, etc. is an opportunity for us to do something new and exciting. I've been in PR a long time and I am truly thrilled about the changes taking place. So, the traditional press release and the traditional media pitches will go away - I won't shed any tears. And many of my colleagues feel the same way.

Now here's directly to some of your points:

Blogging does disrput the MSM because it takes time away from it. If I am spending 1 hour each day to keep up with my favorite blogs and podcasts, I might not read the paper anymore or skip People Magazine or GQ or Cosmo or Travel & Leisure.

Who says hired communicators can't blog. If they're honest and transparent about what they're doing, just wait and see. It's what you said about Robert Scobel - it they're passionate about their jobs and what thye're writing about - they'll be heard! It will all get blurry after a while - who's blogging for whom.

I agree, however, that PR people (including me) are still trying to figure out how to integrate blogs, etc. into their PR routine. Maybe trying to find out how to pitch bloggers is not the right approach. Maybe it is indeed offering ourselves to companies to blog for them (since most of us know how to write well) as long as we feel passionate about their product or service. This might not work in B2B but for sure it's worth thinking about for B2C. Maybe we need to find a way to become a part of GCM. There are all kinds of opportunities!

Keep those disruptive posts coming!


Tom Foremski - Silicon Valley Watcher [TypeKey Profile Page]:

Tina, thank you for your kind words...all I'm saying is that the press release and PR in its current forms will have to change. It will take time to change, I'm just hoping to point some of you in the direction things are going.

And yes, I do think some PR people have the guts to change, but many others would prefer that nothing change and that things go on as they are. We've had to make big changes in the media world and we are not done by far.

Blogging by itself, would not disrupt mainstream media--you have to attack the business model for something to be disruptive. Search engine marketing is taking hundreds of millions of dollars from mainstream media. The blogosphere is taking a small, incremental amount.

And BTW, both cannot compete against search engine marketing. I had my electricity cut off last week for three days--blogging can't even keep the lights on :-) Unless you have something else to sell--blogging is not (yet) a profession. But it is the most honest form of self-promotion bar none! Because if you can't walk your walk it becomes readily apparent.


Tina Lang-Stuart:

Thanks, Tom, for acknowledging that some of us PR people can be movers and shakers, too. Yes, I am all for honesty and transparency and - for lights on!


Tom Foremski - Silicon Valley Watcher [TypeKey Profile Page]:

Tina, it is people like you that I like to chat with. Because you are new, you haven't been taught how not to do things.

I'm tired of people telling me "that's not the way it is done we've been doing this for 15 years." I hate that attitude.

In my world, there is always a big Undo/Go-Back button. I want to try new stuff. But that's because I don't have a business model to defend. In fact, I don't yet have a business model--(but I know I will have one :-)

If you have a business model to defend, one that is paying the bills--you can't readily jump to the new. It is what I call "You can't get there from here" a wonderful uniquely American expression but one that is so well suited to what is happening now; it speaks to the culture and business gap (chasm) that has opened up between old rules and new rules companies.

The old can't move to the new because the business model won't support the cost structure of the old.

I left the Financial Times because I realized that I could produce a column inch (a measurement of editorial copy) of Tom Foremski, more cheaply than the Financial Times. And on a very robust and powerful technology media platform that was virtually free (a $100 Movable Type license plus $40/month hosting.)

Yes, I don't yet have a business model that can keep the lights on, but it can only get better for me and more difficult for my former employer, and its peer group of newspaper businesses.

I'm a journalist blogger with a laptop--the only way you can compete with me is if you are living rent-free at your parent's home, and using your sister's computer (plus 20+ years building your personal brand...).

These are great times for journalists and PR people because at no other time in our lives will we be at such a disruptive point in our professions. And disruption is good if you are not married to the old--because that's where the next generation of leading companies will grow.


I'm with you on the business model thing Tom - mine keeps coming in and out of focus almost from day to day. Like you I WILL get there. Just don't when and how seems terribly shaky one day and rock solid the next. My advantage? Rent in spain is a lot less than SF (and we don't have the misty weather thingy)


Steven:

Hey Tom -

I'm the Waggener Edstrom person you spoke with at lunch during the conference. It was great to reconnect. If you remember, I appreciated your opinion about the current format of the press release needing to evolve in some manner. I took away an interesting point of view to consider how I might better serve folks like yourself in communicating the information you're already interested in learning about but with greater effectiveness.

In regard to the conference, I was attending out of pure curiosity about "the conversation" and found it tremendously elightening and inspiring. Besides, a good friend of mine (Jory des Jardins) was keynoting. In the end, I realized that my passion about photography is just as valid a contribution to the conversation in the blogosphere as all the technology content I read each day. I now have a sense of how to go about being more engaged and participatory in the process.

Additionally, I imagine this experience and enthusiasm for participating in the conversation is something I can eventually coach my clients on. Am certainly not intending to ghost write a blog for them... To your point, I think what is being called out here is that PR pros need to gain a deep understanding of social media, blogosphere, etc. before barreling ahead with outdated perspectives - and by outdated that could mean as recent as 6-12 months ago. The rate of change in the blogosphere is mind blowing.

Anyway, it was a great couple of days. Robert Scoble and Shel Israel's luncheon keynote and all the other content delivered during the conference inspired and educated me. I will soon have a blog presence to share with everyone - pls forgive the lack of a link here.

Cheers.


Tom Foremski - Silicon Valley Watcher [TypeKey Profile Page]:

Steven, thanks for your comment. I enjoyed our chat at lunch and yes, you are right, things change quickly in the blogosphere. There are distinct fashions of expression, and this is also true for different age groups, and within different sectors. In each of these, there are accepted ways of communicating and you have to be aware of them, before as you say, barreling ahead.

However, I do recommend barreling ahead because otherwise the time will never seem right :-)


a high pagerank doesn't mean that the site is good too...


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