Thursday, August 27, 2009

The Influence Game

Anyone working in IT knows the power and influence exerted by Gartner, Forrester, IDC and the rest: Industry analysts can create markets, shape buying behavior, and even determine the fate of entire companies. They have a direct and measurable impact on the way organizations and individuals buy and use technology, from ubiquitous consumer products to esoteric emerging technologies.

I'm employed by an enterprise software vendor, and working with the analyst community is a central element of our marketing mix. Analysts are uniquely positioned to provide a highly informed yet objective view of our ideas, strategy and product development plans. But more importantly, they also act as valued advisers and translators for consumers of information technology, aka our customers and prospects. And as a breed, analyst can be delightfully quirky individuals that are fun to know. (They can also be infuriating, pig-headed and far too enamored with themselves, but I digress...)

I've run AR programs for a handful of companies, and recently I inherited the AR brief in my current job. It's been a couple of years since I talked to analysts on a regular basis and it feels like the landscape has changed. If you've got experiences you can share – or resources you'd recommend – please get in touch.

Thursday, August 20, 2009

Social Media Makes Money?

A lot of people, including me, have made fretful bleating noises about the dismal economics of conventional media. Not so many have made the same bleats about social media, even though these businesses aren't exactly printing cash.

Just today the Wall Street Journal reported that YouTube owner's Google are “aggressively pushing new ad formats and ramping up deals with media companies” in an attempt to make some money from the popular video site. Google acquired YouTube over three years ago and has struggled to make it pay.

Google isn't alone. In 2005 News Corp. bought MySpace for $580 million, only to see the site's popularity wain as Facebook adoption exploded. Earlier this month News Corp. announced a quarterly loss of $205M, citing MySpace as a big cost-sink. Not that rival Facebook is exactly rolling in cash itself – the company hopes to get cash-flow positive by 2010, even as the number of subscribers spirals above 250 million. In March this year Facebook let go of its CFO, and in May sold stock at an evaluation well below the price Microsoft took when it bought into the company back in 2007. Meanwhile, the social media darling Twitter is enjoying a kind of celebrity and ubiquity that seems to eclipse even famous users Obama, Kutcher, and the Iranian nation state, yet the company has essentially zero revenue and is fumbling for a business model.

This is an enviable problem to have. As more and more of our lives drift into the ether, many of these companies are becoming invaluable. Most will find a way to extract payment – directly or indirectly – from us all. The usual default model – advertising – might well work, although I remain skeptical that over the long haul this alone will be enough. And without a doubt some of the social media giants of today will wilt and disappear: People are fickle, fads change, and the very success that many social media sites enjoy will make them less appealing to users who's time and attention become stretched thinner amid all the clutter and noise.

All these services are turning the Internet into a modern-day Babel. The real money may be in technologies that keep all this information at bay, and offer ways to filter, find, manage, and assimilate content, or mechanisms for presenting and preserving our digital indentities in a coherent and controlled way. We need protection. Social media services may not charge a dollar but they ain't free -- they cost us all way too much time.

Tuesday, August 4, 2009

Source Credibility

At the end of last year Eric Schmidt, CEO of Google, described the Internet as a “cesspool where false information thrives.” He advocated that “brands are the solution, not the problem.” While many saw great irony in Schmidt's comments, it's hard not to agree: most of what passes for information on the Internet is at best regurgitation, and much of the rest is vapid opinion or self-serving nonsense.

In the good old days, before said Internet, it was pretty easy to know who was saying what and why, and to form a reasonable opinion on how credible the information was. Back then, the media that mattered were massive, and they had a brand, and they had a certain credibility: ABC, New York Times, BBC, NewsWeek, NPR. They even had handy signposts to indicate when they strayed into overt opinion – the Editorial Page, for example – and they published retractions when they screwed up, which they did a lot. They had editors, even. And Ombudsmen. Really.

Now all that's shrinking away, and many say good riddance. We now have the wisdom of the crowd and we certainly have a more democratic media. Everyone has a voice. The problem is, we don't know who to believe and who to trust. As Peter Steiner cartooned it, “On the Internet, nobody knows you're a dog.”

This isn't a new problem, it has just got a lot worse. Back when I was teaching Mass Comm classes it was labeled “source credibility” and was something academics studied and organizations strived towards. Public relations professionals aspired to be seen as wise, informed, trustworthy sources of news. Hack and Flacks traded on news as a commodity.

Today, the burden of being a credible source lies not with massive news organizations but has fallen back on the PR professional and the organizations they represent. This is where Schmidt has it right: more than ever before, PR is about brand preservation and about creating a voice for the brand that can be trusted. It is about providing valuable information. PR needs to assume many of the responsibilities that used to be the function of the mass media, and let the new social media do what they do best – express opinion and be a critic. To paraphrase Steiner, “On the Internet, everybody is a watchdog.”