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

A Saturday Post: Social Media Is Not Free - And The Disruption Of The PR Business Model

Posted by Tom Foremski - June 13, 2009

Chatter.jpgCan you charge for news? Can you charge for social media? Two questions that show how the economics of the online world are affecting media and PR.

I've long said that the same media technologies transforming the business model for journalism are transforming the business model for PR. Yet this relationship wasn't as evident in PR for several years because the old business model was still working. The difference between the two industries has been in the timing of the disruptive trends affecting them.

Last year I spoke with Todd Defren, owner of Shift Communications. He said that social media was the tip of the spear in terms of winning new business. However, he said that it takes a lot of work and that clients often aren't willing to pay for the extra work.

This situation is fine if you are still able to sell the traditional PR services of media relations, etc. But as the economy cuts budgets, and as media shrinks and shatters into a thousand shards of "social media," the reality of having to manage media relations in this kind of world becomes daunting and extremely time consuming.

Without the crutch of the old business model, the new business model in PR becomes very challenging. It mirrors the challenges in the media industry, where the old business model is disappearing and the new model can't support the old cost structure.

In the old business model you pitch 50 journalists and maybe get 5 bites and your message reaches an audience of 20 million.

In the world of social media you pitch 50 "influencers" you get five bites and your message reaches an audience of 200,000. (I'm pulling these numbers out of a hat to reflect relative reach.)

It can take just as much time in both scenarios but can you charge the same for both?

You are getting a more targeted audience in the second scenario but will clients pay for that? After all, 20 million versus 200,000, doesn't look great.

Or, you create a video for client and it gets shown on a popular TV program that has a reach of 30 million. You create a video and pop it onto Youtube and 3,000 people see it. Again, you are likely hitting a more targeted audience but the numbers look crappy.

The problem is that clients still buy numbers, in the same way ad agencies still buy numbers. Even though this old metric is inappropriately used, it is the one that people -- especially bosses -- know.

Media is facing the same problems. For example in my business. It can take me the better part of a day to drive to meet with a top executive e.g media mogul Patrick McGovern, founder of IDG. By the time I get back, write up the interview, produce the piece and publish it, plus the research before the interview -- that's a full days work.  [ThoughtLeader Interview: IDG Media Mogul Patrick McGovern]

But if I were to tot up the number of readers, and if I were having to rely on online advertising, I'd not be able to make a living. And that's true for large newspapers too. The amount of traffic they get on an advertising supported news article is not enough to cover the costs of the reporter, editors, photographers, office space, pension plans, healthcare, etc.

Similarly, the online world is disrupting the economics of traditional PR firms.

I'd like to welcome the PR world into this brave new world and to it's hand basket to hell :) [Media industry is going to hell in a hand-basket - Where is PR industry's hand-basket?]

Social media is media

I've always refused to make a distinction between media and the "blogosphere" or between "social media" and mainstream media -- it is all media, is all one "mediasphere." And I believe the term social media will eventually disappear as more people realize the oneness of all media. In the meantime, it is a widely used term and currently applied to blogs, Twitter, FaceBook, MySpace, YouTube etc, -- anything that allows content to be shared (republished) and commented on.

Marketers and PR people have welcomed the rise of social media because they can get past the "gate keepers" in traditional media. And there have been several instances where they've managed to promote their clients at seemingly little or no cost. (Again, clients will be asking why should they pay big bucks for simple "social media" promotions that appear to cost very little in time and effort.)

However, those instances of easy promotion and big results through social media will become harder and harder to achieve because the noise level will rise tremendously, as it already is. Then you are left with the hard slog of PR to rise above the clatter and chatter -- and that isn't free.

But will clients pay for something that they see as free, will they pay for audience numbers that look puny? Will they understand the hard work that will be required to do PR in this world of fragmented media?

Here are some more thoughts on "Social Media is not free."

A Smart Bear: Please stop saying social media marketing is free -

Social media is expensive. In fact, it's more expensive than traditional media. It just comes in the form of spending time instead of spending money.

The "cheap" claim is everywhere.

A Social Media Gut Check | Altitude Branding | Brand Elevation through Social Media

Are we willing to spend money on this?

Social media is not free. You need time and money. 2-5% of your marketing budget on average, more if you need to develop specific tools or applications to accomplish your goals.

FRANDEAVOR BLOGS ON (AND ON) » Franchise Lead Generation

Social Media is not free. You need a staff member and a brand champion to lead your social media efforts. This person needs to be a skilled writer, fluent in the language of social media, and they need to be an authentic FAN of your brand. You need to pay for their dedicated time in executing your social media plan. Don’t assign your social media efforts to the intern or the receptionist; assign it to a key member of your team.

MediaPost The Future Agency Of Record Will Be Social

Because "free media" is a bigger fairy tale than unicorns. There will be significant capital outlay to earn people's attention in social media, which will need to be spread across various social media vendors and creative partners. It will be incredibly important to track real costs and measure ROI.

Top 10 Social Media Myths BUSTED | Digital Operative

...planning and launching a social media campaign is extremely expensive in man-hours. The amount of time it takes to research your audience, architect conversations, build creative, and engage them effectively is anything but cheap.

New Social Media Marketing Industry Report | Implications for B2B Marketing | B2B Marketing Blog

64% of marketers are using social media for 5 hours or more each week; 39% for 10 hours or more. The median for people using social media marketing for years was 20+ hours per week. Social media is not free. While you’re not paying for hard costs, like advertising placement, it requires a dedication of time and talent to create great content, to engage in conversations, and to continually learn.

Just as Difficult as it Seems | chrisbrogan.com

Building a new plan for your organization that encompasses using listening tools, media creation like blogs and podcasts, social network interactions on services like Twitter and Facebook, is very difficult.

Help! The Recession Ate My Marketing Budget.

Unless you consider man hours free, social media is not free and it can in fact be a costly time suck without a clear vision of the social media campaign...

Social Media - Do Big Business Get It? SES Toronto 2009 | Search Engine People | Toronto

Social Media is NOT FREE… although to sign-up to most platforms maybe free the strategy, time and equity that need to be built and doing any of this takes energy and money. If a company is not able to commit to this investment they need to stay out of this space.

...Social Media is not easy. There has to be a tremendous amount of research, content development, engagement and tracking that goes into any social media effort.

Also, taking part in social media is not free. Here is a view from the ground floor:

Some Fantastic: Social Media is Not Free: The Broke Blogger Blues

I don't sit behind a desk all day, I don't have the internet in my pocket and I can't afford too.

I'm offended when these socialmedia/tech enthusiasts think that this is free, easy and accessible for everyone. You know what? It's not.

...I mean, if it was truly free and accessible to all, why aren't we seeing more blogs written by joe-blows like me. People that don't have computer access at all times. Waiters, bus drivers, mail carriers, massage-therapy receptionists! I know I'd like to read those.

So how do you reach the people that can't afford to take part in social media?

. . .

Here is another issue that I'd like to explore in a future post.

How does a PR firm remain genuine representing clients? Online you can spot a phony a mile away...

[I'm experimenting with a "A Saturday Post" posted every Saturday evening. A longer form essay-like post that can be developed further over the weekend. Hopefully with input from others. Let me know your thoughts on this. You can comment or send me a guest post or send me an email Tom at Foremski.com. ]

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