The Buffalo Blog

twitter – a license to print money?

In the wake of what people are calling the ‘mainstreaming’ (is that a word? better ‘mainstreamisation’) of twitter – Stephen Fry’s appearance on @wossy’s popular talk show – it draws ever closer to the moment that all social media start-ups inevitably; the ‘how the *!@£ do we make money out of it’ stage.

 

In an ideal social media world, of course, this moment would never occur and we could continue having fun in our ‘web 2.0topia’. But this is the real world and when something becomes a big success, founders inevitably want something for their hard work and rightly so. And so, the twitter founders crawl away from their computers after however many million tweets, and start looking for their holy grail – how to make millions from 140 word messages…

 

I say this stage is approaching, but the truth is that the wheels are already in motion with last week/month’s hiring of the first commercial twitter employee Kevin Thau. Interestingly though, it seems the founders aren’t in it for the quick buck after turning down a reported $500m purchase approach from Facebook late last year. Perhaps the contract was too restrictive in terms of future profits for them to accept, or perhaps they’re still loathe to see their grassroots social media site become another lumbering web 2.0 behemoth and all the restrictions that come with it – we can only guess. Either way, they’re sure to be planning something and it’s not likely to be long ‘til users find out what this is.

 

As is usual in these cases, if twitter does bow to a takeover eventually or continues to seek market-based funding for organic growth, it all comes down to how the thing is going to make money. How they do this is of course, the million/billion dollar question.

 

But there are a few things that need to be worked out beforehand to make sure any roll-out goes smoothly and avoid the frosty reception received by Facebook’s Beacon system:

·         The technology – Drew Benvie of Hotwire commented on the latest failure of twitter to cope with big peaks in demand. Not counting on the weight of British support on twitter, they were not awake to the inevitable usage peak that would come after Stephen Fry’s appearance on Jonathan Ross’s chat show. The old PR faux pas occurred where thousands wanted to check out the website and due to sheer numbers, nobody could. Quality and continuity of service need to be foolproof before any thoughts of cash are had

·         Understanding uses – twitter is a boon to marketing types and journalists but there is still a massive portion of web-savvy consumers that don’t use it. Twitter is amazing for information sharing and that’s why we all love it, but some people still simply can’t see the point. Many now-advocates of twitter (including me) dismissed it on the first try and many others will inevitably join, but some will never get involved. Stephen Waddington, MD of Rainier PR looked at the tech adoption lifecycle in his blog. Twitter and marketers using twitter need to understand this if they are to do anything profitable with the site.

·         Understanding users – people are often put-off when new media sites are ‘tainted’ with the corporate dollar. Twitter needs to tread carefully, understanding the who, how and why of using the site before anything is even beta tested on the site

·         Innovation – obviously advertising money has to come into the bargain at some point, but an innovative service demands innovation in monetisation. So many sites just slap on a load of banner or flash ‘slide over’ ads in a quick stack ‘em up and pile ‘em high selling mentality. If twitter is to carry advertising, it needs to develop something non-intrusive and useful whilst addressing any data privacy concerns that arise. Although, the fact that everything uploaded to the site is public anyway may negate certain problems from the outset.

There’s definitely a fair way to go before twitter makes any significant cash but they’re bound to start trying soon enough. For the when and how we’ll just have to wait and see…

Events are shrinking

A rather ominous email landed in the inbox this morning, stating:

"The Retail Business Show" and "The Retail Business Show Awards" have unfortunately been cancelled. With the current economic slump and more specifically the carnage within the retail arena right now we are not able to put on this year's event, thank you for your interest.”

That was pretty much it apart from an email signature at the bottom; nothing but dismal, downturn depression.

The email piqued my interest firstly because this is usually such a vibrant and well-populated event and secondly, because it’s a subject Buffalo’s just recently been writing about recently.

Obviously retail is a special case with the torrid times the high street is currently going through, but this is likely to be an ongoing trend across the entire event industry. The decline of the mega-expo and conferences with 500+ delegates are really inevitable as marketing budgets are reeled-in.  

During the downturn all businesses are looking to justify every little bit of marketing spend. The mega event, all too frequently, can be a hit and miss affair if delegates don’t plan their involvement properly or don’t have the necessary information to make the best of their time.

The result of this reining-in of events budgets is going to see a rise in more specific, smaller events, creating high-value face to face interactions. Creating smaller events can often see a much more direct result; converting warm leads and strengthening business relationships by devoting more time and effort to those that matter.

Having said that, both big and small events have their individual merits, so this isn’t the end of large events as we know it. However, the trend is starting to emerge and is only likely to increase in 2009 – look out for it.

Wash your mouth out...if you dare

“You should use mouthwash and floss regularly for healthy teeth and gums” – for a long time I always wondered why I pretended to heed this dental advice while secretly ignoring it completely – well now I know. Apparently mouthwash causes cancer!

 

Yes, it’s finally happened, mouthwash (containing alcohol) has joined that ever growing list of secretly evil, carcinogenic consumer products. It seems my ignorant ignorance of sound dental advice has stood me in good stead against the perils of mouth cancer. But what now of the poor embattled mouthwash companies? What do you do when peer reviewed scientific research suggests you main product could inherently kill people?

 

Well, cry is a likely first reaction. Then you read the story again…as per usual, the story has been sensationalised out of all proportion. But it’s out there, and people are going to be worried, leading to loss of reputation and sales.

 

Of course, for a big company crisis management 101 is likely to swing into action right away. But the case is slightly different here, in that there isn’t actually anything wrong with mouthwash products. There isn’t any tampering or malicious intent etc. As such, a recall is out of the question and would cost a company dearly; even further increasing worry about the products. In which case, making spokespeople available, informing consumers that the company is looking into the research, even a pledge of support in both money and time for further research, should all follow.

 

Listerine (Johnson & Johnson) is one brand that has been targeted by the media, although presumably any alcohol-based mouthwash is at threat. Statements (“Johnson & Johnson Ltd UK, the manufacturer of Listerine, said: "There is no scientific evidence to support an association between the use of alcohol- containing mouthwashes, such as Listerine, and an increased risk of oral cancer.”) have been issued but it remains to be seen what else will be done and how the brand will fare.

 

Watch with interest – these are dangerous times for mouths and mouthwash companies…

 

MEDIA ALERT – Satyam Chairman resigns over inflated profits

Story: The head of India's embattled Satyam Computer Services resigned on Wednesday after stating that the firm's profits had been inflated, sending the stock down more than 80 percent and roiling investor confidence.

Buffalo Communications MD, Kerry Hallard, comments:

“This is a massive media crisis for Satyam that is en route to completely destroy its reputation. Investor confidence is already gone and customers are also going to be very worried. Derogatory online comment abounds and is growing by the second with some branding it the ‘Enron of India’. Yet comment from the company is scarce and its website largely lacking comment. A press conference in 24hrs simply isn’t quick enough when one’s reputation is falling apart by the minute.

“It’s clear that Satyam must act decisively if it is to salvage its tattered reputation, allay customer fears and ultimately rebuild its once impressive reputation. Effective and rapid communication during a crisis such as this is absolutely paramount especially when the online conversation is passing judgement on a second-by second basis. Silence now will only help to fuel rumours and detrimental speculation.

“Satyam should take the following steps to make sure that all stakeholders get the information they need as quickly as possible:

• A clear action must be taken, such as an external investigation. This concrete action must be conveyed, directly and indirectly, to audiences through the website, press, blog, YouTube and other available routes.
• The PR team should be assembled and appropriately briefed with FAQs for every possible question. PR teams should be aiming to effectively communicate what went wrong, why it happened and how the problem is being rectified. The FAQ should also be released as above.
• The most appropriate spokesperson should have his or her diary cleared, be briefed on what the company is doing to resolve the situation, and be made available for comment through all major news channels.
• The company should not let an information void occur. The internet is rife with speculation and lack of company comment is quickly replaced with derogatory conjecture. The company should ensure a constant stream of communication, even when there is nothing new to say, creating transparency is key.
• Internal communications should also be taking place. Resignations and possible fraudulent activity will cause concern amongst the workforce. Briefing and reassuring employees is vital to maintain morale. PR crises will get worse if disgruntled employees give damaging statements to the press. Making sure that they understand what the company is doing about the situation and the effect it has on them will mean that they feel valued and in safe hands.”

A year for fear or PR cheer?

Periods of festive stupor frequently bring to light some of the best ideas – it’s a shame they only come but once a year. One such occasion in the Brown household this year occasioned thoughts on the future of PR, and while not the best and most original thoughts in the world, they do warrant a blog at least. The key questions ‘Is 2009 a good year for PR?’ and ‘Who will win in the race to dominate online?’

Unquestionably 2009 will be a tumultuous time for PR. The credit crunch and the ongoing step-change in the way publishing works, will necessarily force a change in the PR industry. This change will occur both in the way we all think about communication and in the overall makeup of the UK’s PR scene. Budgets are likely to be squeezed, yes, but the biggest change will be the way PR professionals look at communications.

Both in national news and trade press, circulation figures continue to slide as more readers turn to online and blogs for their daily information. The ongoing cuts in advertising expenditures due to the recession is also punishing publications forcing publishers to reassess staff levels, strategy, circulation and, of course, their online strategies. This combined with widespread confusion amongst advertisers over exactly where and how to advertise online is already severely changing the face of print media.

To have a good 2009, the PR industry needs to keep up with these changes and adapt its business accordingly. There are already more freelancers out there, less full-time editorial staff, more bloggers, many more publishing business models and many more niche, more intensely targeted communication channels to address. Not to mention the opportunities presented by video and audio communication. More changes and opportunities will no-doubt come to light this year.

The problematic thing for out-of-touch PR’s is that the world just won’t wait for PR to take up the mantle at their own pace. There are any number of candidates looking to seize business in areas that are technically PR’s. The key tenet of good PR still holds true, interesting, quality content is key. But it’s the dissemination of the stuff that’s changing and that requires new skills: SEO, keyword marketing, digital marketing, advanced web skills to name but a few, will all be vital. The industry is constantly evolving and PR professionals must evolve at the same pace to avoid being usurped. Some will undoubtedly fail to do this.

The internet is constantly presenting opportunities for customer communication but with this diversity comes complexity, calling for a more diverse number of competencies from today’s PR companies. Being able to use traditional media relations alongside the company website, blogs, social network group, news releases, whitepapers, e-books, videos and so on, in an integrated, targeted manner is absolutely vital to gaining interest. Ultimately bringing customers through your virtual, and consequently, physical door.

Change in the media and marketing landscape is constant and inevitable – PR companies that don’t recognise this and ignore the change are sadly doomed to failure.