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

Wily E Coyote: Traditional PR is Running on Thin Air

Posted by Tom Foremski - October 9, 2007

Thoughts on Strumpette Amanda Chapel resignation...

I've long warned the PR industry that it is on borrowed time. The media industry is undergoing traumatic changes yet PR is thriving. Media and PR industry fortunes have always followed each other in lock step.

Wily E CoyotePR today reminds me of the Roadrunner cartoons. The times when Wily E. Coyote is chasing the Road Runner and notices he is running on thin air, at which point he plummets thousands of feet to a distant canyon floor. That's how I envisage the PR industry today--about to plummet from a great height.

Strumpette and Amanda Chapel tried to stir up changes in the PR industry and encourage a new form of PR, by openly discussing ethical issues, and all the unpleasant aspects of knowing how the sausage is made.

But nothing changed despite all the transparency around the process of public relations.

Is this a failure of transparency? Yes. Because nothing changes unless you have to change. And you only have to change when you have to change because things have become fiscally painful. The PR industry is awash with money unlike the media industry, so it doesn't change.

Traditional media is changing rapidly because it can't make money the way it used to make money. That business model is being hacked to pieces.

Advertising is moving rapidly online, and it is moving towards search engine advertising, not journalism.

Selling products and services next to a column of journalism is not as effective as selling next to a search engine query--which magically reveals what you are looking for. This is way more useful to advertisers than revealing what you read.

In the PR world, unlike the media world, the companies are hiring like crazy and still doing business the old fashioned way: press releases, white papers, case studies, media (dwindling) relations, etc, ....

Yes, every PR firm offers "social media" or "new media" services but how many of them practice what they preach in terms of using such technologies to drum up business for themselves? Shockingly few.

It is clear that this old model of PR is going to end. In fact, it has already ended but most PR firms don't know it, just like Wily E Coyote's sudden lack of solid ground...

I keep running across Silicon Valley companies that have spent no money on PR or marketing. Zero dollars.

Slide.com, for example, has managed to attract millions of users for its online apps on Faceback and MySpace for no dollars.

There are many smaller startups who have done the same: zero dollars spent on PR and marketing. They have gotten incredible results from the viral nature of their products, services, and their personal abilities to establish though leadership through blogging and other online engagements.

What happens when venture capitalists start demanding that same type of business strategy from their startups?

Consider this: The whole outsourcing trend to India, Phillipines, etc, was significantly boosted by the VCs and their demands that their startups take advantage of the economic benefits from an outsourcing strategy. As a startup, if you can't show you have a viable outsourcing strategy in your business plan, you won't get funding.

Next: Startups will have to show VCs that they have a viable viral marketing and distribution strategy. That means cutting out about $120k to $200K of annual expenditures for basic traditional PR services for a startup.

And larger companies will be tapping into this same trend. They will be cutting back on traditional PR services and investing in their own viral marketing methods. I already see this about to happen at big companies such as Intel (an SVW sponsor), Hewlett-Packard, Cisco Systems, IBM, and this trend will grow.

Dell, for example, recently hired Andy Lark, one of the top new media strategists in SIlicon Valley, imho. What do you think Dell intends to do with that hire? It won't be marketing-and-PR-as-usual, that's for sure.

No Pain, No Change

Change in the PR industry will happen because the old ways won't be as good, or as cost effective as using new media technologies to publish and engage customers. Traditional PR doesn't provide the same bang for the buck.

It is when the PR industry feels the same pain that mainstream media is feeling right now, a kick in the pants to its core revenues, is when change will happen. But without pain, no change.

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