I’m keen to understand how the global recession is impacting social media and particularly the North American powerhouse, Silicon Valley. I’m interested in the develpments occurring at Silicon Valley mostly because today we can consider it the backbone behind a lot of the big Web 2.0 companies.
Belts seem to be tightening in all industries across the board - banking, automotive, retail and so on - yet we’re still seeing big injections of capital in many of the Web 2.0 companies.
Take micro-blogging service Twitter for example. It was announced this week that Twitter has managed to raise $35 million in venture capital in spite of the challenging economic climate. This capital has come from Institutional Venture Partners and Benchmark Capital.
Are venture capitalists finally seeing the real value of Web 2.0 in helping deal with challenging times ahead?
I think that social media will come out on top in these tough times as people start using it as a means of cost-saving on entertainment. This is especially important at a time when people are becoming increasingly budget-conscious and are rather choosing to bunker indoors and save their pennies.
I’m a good example of this. I seem to find myself on fewer outings to the movies and instead I keep my cinema experience to my lounge room with my LCD TV, entertainment system and complete surround sound system. In fact, I can’t remember the last movie I saw at the cinemas but I could rattle off at least five DVDs that I have watched at home. I also spend less time travelling and more time talking to my friends overseas via Facebook and Twitter.
There are a plethora of online technologies and digital devices out there that provide consumers with their own portal to entertainment. Aside from big screen TVs that bring you a cinema at home, there are also notebook PCs to consider.
Notebooks are another means of cost-effective entertainment to online services such as online gaming, online video, video conferencing and instant connection to friends and family via IM, social networking sites, email or Skype with those embedded with broadband solutions.
Interestingly enough, consumer experts are also already tipping that many Australians will use the planned $950 Rudd Government cash handouts to splurge on games and gadgets, following record spending on electronics last year (as reported by the Courier Mail).
I’ll be watching these developments closely but please feel free to share any information specifically around how you think social media will fare in light of the global recession.
If you haven’t been following this Australian story, it’s a stark reminder on why you cannot deceive people through social media campaigns. And if you get caught telling fibs, please admit it.
Naked recorded a video of an actress who claimed to be trying to find the man of her dreams who had left his jacket in a cafe, and put it on YouTube. It quickly became the most talked about stunt, but for all the wrong reasons. It suffered a backlash from social media commentators who opposed the deception involved in the campaign. Then a second video was produced, and so it went on. The hole was getting bigger by the day. It would only be a matter of time before someone fell in that hole, and that person was Naked’s CEO in Australia, Mat Baxter, who quit last week.
There entire saga moved at such a fast pace and there were plenty of twists along the way – first denials, then admissions, then defence of the stunt and finally more finger pointing. Naked said it was all fun and harmless, but the bottom line is that people don’t enjoy being lied too.
The last straw was when The Australian’s Wish magazine published a full page advertisement from Naked for Witchery naming the journalists and media that had been fooled into writing about the stunt. Ouch! As you can imagine, this didn’t please those journalists.
Whilst the CEO has now moved on, can Witchery recover from this mess? If you check the company’s web site, it’s still trying to turn this situation into a positive (if that is at all possible?), offering customers the opportunity to meet the ‘famous’ model from the YouTube video. Perhaps the named journalists will turn up looking for revenge!
Not quite best practice and further reinforcement that you need specialist advice to play in the social media space.
I have found that corporate communications briefs for technology companies tend to have one thing in common. “Make people see the amazing innovation we have here” they say. Sometimes that innovation is easy to find, sometimes not. The motivation for wanting that innovation brand association however can be murky but often has an undercurrent of ‘we want our brand to be more respected, valued, get us out of commodity positioning’.
So when real commitment to market- and economy-moving innovation comes along, you have to applaud it.
In this economy, you need to scream your sincere appreciation for it, because it shows a commitment to be stronger tomorrow than you are today.
Example: Intel announcing this week a $7B investment over the next two years as they upgrade their facilities for 32nm technology used for the production of new faster, smaller, energy efficient chips. (Note: Intel is a client).
Intel CEO Paul Otellini said it so well this week on NPR. http://tiny.cc/4FLW7 “New technology is what pulls companies in technology out of recession,” he said.
And when asked what feedback he gave President Obama on the stimulus package, he did not hesitate to support plans to spend on much needed infrastructure investments, with the National Science Foundation, quality of classroom infrastructure, and tackling long-overdue problems that technology can solve, like electronic medical records. “My God,” Otellini said. “How long have we talked about that (Health IT)”?
How long indeed.
And just how long have we applauded brands for ‘innovation’ when there was little substance beyond an island in second life?
Intel has set a bar. And the best thing about that bar is if you really listen to what they are saying, they want more companies to meet and beat that bar. A rising tide raises all ships.
Lets not get amnesia about that bar on innovation when things get better, OK? Who else do you see raising the bar? I’d love to applaud them.
I’m doing an interview this afternoon (4PM ET) about best practices in PR during the current economic environment - the topic of my last post. Here’s the link. There’s a call-in number if you want to join the conversation.
Sean Callahan of BtoB Magazine interviewed me last week about how companies should conduct PR in a recession. The resulting article can be read here*.
A recession is an interesting time for marketers. Companies often view marketing as an easy place to cut, yet those companies that maintain or increase spend can pick up market share. Witness Apple.
When thinking about PR in a recession the first thing companies need is an understanding of public relations. Everyone understands advertising. Advertising is something you buy. You can buy more, or less, depending on a variety of factors.
PR, however, is something you do. It is the marketing discipline most concerned with how a company communicates to its various constituencies (customers, vendors, employees, partners, media, analysts and other influencers). No company stops doing this; they just stop doing it well.
So what should companies be focused on doing well in a recession? Here’s my list:
*My comments may suggest an (attitudinal) resemblance to Alec Baldwin** in Glengarry Glen Ross***. This is (mostly) inadvertent.
**No physical resemblance, except, perhaps, with late-model pudgy Baldwin.
***No link. This is a family blog.
A great piece quoting our very own Paul Sherer. This takes a look at how we’re helping clients like SunPower enter the discussion thread on Obama’s clean energy stimulus plan.
So we’ve all been hearing and reading a lot about “The Best Job in the World”, the destination marketing campaign by Tourism Queensland. In short, Tourism Queensland put out a worldwide call for candidates to apply for a Great Barrier Reef-based job paying $150,000. This has played out quite nicely in social media - in particular on video aggregator sites such as YouTube.
The winner will need to become friendly with the locals and explore the Great Barrier Reef and indulge in activities that make up the island experience - swimming, diving, snorkelling and hanging out on the beach. As part of the ‘dream’ job, the successful applicant will also need to post their adventures on a blog, regularly updating it with the latest photos and video footage.
In order to apply, the candidates have been asked to create and submit a 60-second video of themselves. Part of a $1.7 million global marketing strategy and, according to a report in The Australian, the campaign is expected to generate more than $70 million worth of publicity for Queensland.
This is a great feat given the current financial crisis and particularly now that the heat has turned up in Australia. It was announced yesterday that NSW is officially in recession and this is expected to spread throughout Australia, according to the Access Economics’ Business Outlook for December 2008 (although there are still mixed reports about this). This campaign is raising the profile of this holiday destination at a time where people are less inclined to travel. This campaign is putting Queensland and the Great Barrier Reef on the global map.
Although this campaign is attracting widespread attention both locally and across the globe, there has also been a recent flurry of backlash. Yesterday, Tourism Queensland admitted to seeding a fake video of a candidate applying for the ‘dream’ job. The video is of a girl getting an advertisement for the Great Barrier Reef tattooed on her arm. The spoof video was uncovered by YouTube frequenters who acknowledged the video as a fake as there was no red on her arm immediately after getting the tattoo.
It was reported in The Sydney Morning Herald that this video was intended as an“…example of the creativity Tourism Queensland expected from applicants, and to spur people to post their own videos”.
This comes at a time where there has been a fair bit of scepticism around the use of video sites such as YouTube to promote a cause. The most recent example of self-promotion is the video of Heidi Clarke, a girl who posted a YouTube video about a man that she briefly met and spoke to at a CBD cafe.
The apparent man had left his jacket behind and because she insists she felt a ‘connection’ with him, she wanted to use the video site to try and find him. Not only did we see widespread coverage of this on YouTube and online news sites but this extended to traditional news outlets including TV. We are still yet to uncover whether in fact the girl and her cause is genuine but it is widely believed that this, too, is a fake.
Despite the furore of using social media and covert marketing to promote a cause, this has still been a unique and innovative destination marketing campaign. We are still seeing other applicants upload their own 60-second videos to YouTube.
The main point though – will it serve the purpose of attracting tourism, adding Queensland to peoples’ lists of holiday hot spots or at least getting people excited? I say ‘yes’.
It’s been really interesting to see how the terrorist attacks in India, Mumbai, have played out using social media - Twitter and blogging in particular. In fact, I am led to believe that social media even beat traditional media to the punch with the announcement of this news.
Some Twitter users used the micro-blogging platform to send out calls for blood donors to make their way to Mumbai hospital where existing and anticipated casualties were being sent. It was also used to get news out fast on those that had been injured and killed and information regarding support numbers for those that had friends and family involved in the attacks were also posted on Twitter.
Although this has been a great tool to get information out on what those on the ground were experiencing in instantaneous nature, it has also fuelled a rumour-mill. There are accounts of Twitter users publishing posts exaggerating the number of casualties and generally sensationalising the situation of the attacks.
CNN reported in the article I cite above: “What is clear that although Twitter remains a useful tool for mobilizing efforts and gaining eyewitness accounts during a disaster, the sourcing of most of the news cannot be trusted.”
People caught up in the Mumbai attacks, including the hotel hostages, were also using their blogs as a news medium to disseminate information on the situation on the ground in India. Bloggers posted their accounts of the tragedy when it unfolded, as it unfolded.
This is indeed a strong reminder of how powerful social media can be as a disseminator of news - whether this news is entirely factually correct or not. Social media has the power to beat traditional media to the punch due to its instantaneous nature and a force to be reckoned with. It’s an online tour de force for distributing instant information to the masses.
I’m interested to get your thoughts on this. Do you think social media played too large a part to play in telling the stories surrounding these tragic circumstances? Do you think it levels the playing field between traditional media and citizen journalists and social media? Feel free to contribute other parts of the discussion that are missing in this post.
According to a new book released by the Media, Entertainment and Arts Alliance, journalists face “two years of carnage”.
Titled “A report, Life in the Clickstream: The Future of Journalism”, the book also revealed it’s very possible that the biggest media companies in the US will come crashing down due to cost-cutting and reduced quality, while five in 11 newspapers will vanish in Britain. After all, more than 12,000 journalists around the world lost their jobs this year.
Media Alliance federal secretary Christopher Warren said that usually, journalism has traditionally “thrived on the emergence of disruptive technologies even as economic models have changed”. The Australian newspaper spoke to Christopher and filed a story yesterday.
In the article Warren says: “Like all crises, the challenges journalism faces are rewriting everything we thought we knew about the news media and causing us to question the basis on which the industry has survived and flourished.” Whilst journalists are using technology to find new and progressive ways to keep the public informed, in the report 70 per cent revealed they’re now experiencing increased workloads due to a shrinking of the workforce.
As to the future, 19 per cent said they were excited about the future of journalism, but 35 per cent said they were pessimistic about their prospects.
Just like the PR industry has to modify the rule book in terms of how it uses social media and the Internet to help its clients participate in conversations and reach new influencers outside heritage media; by the same token journalists and publishers face even tougher challenges to retain relevance, especially as audiences continue to fragment the world over and chose multiple sources for information. Add to this the financial crisis now sweeping the world and further cost pressures will only amplify the speed of change.
The Australian article looks at what might evolve if mainstream news organisations collapse, citing research from the City University of New York. That says an organic news organisation could evolve - based on bloggers, video shooters and photographers, it would be augmented by community managers, program developers artists and run by just a handful of editors, all on an annual budget of $2.1 million.
On a brighter note, and to update on my last post about PC Magazine’s decision to cull its print title, Roy Morgan has just released circulation figures in Australia for the last 12 months. The good news is that PC magazines did remarkably well. PC User’s readership climbed from 281,000 to 313,000 while APC went up from 275,000 to 280,000. PC Authority went up from 154,000 to 158,000, and PC Powerplay up from 111,000 to 115,000. Netguide was the only tech title to record a fall, dipping from 106,000 to 99,000. For even more analysis, check out last year’s results to compare.
Some good news to end on.
Whilst there is a lot of attention and focus right now on the recession and how it will impact IT spending, I am sure the Wednesday’s news that PC Magazine will close its print edition to go 100 per cent online did not go unnoticed. I would imagine this decision will have many asking themselves the question “if PC Magazine can’t sustain itself, who can?”
It is a trend that we have seen in Australia with PC World doing the same thing some months back.
So, is this a shock or simply a result of market forces?
Having spent nine good years myself at Yellow Pages through the late 80s to the mid 90s, there was a belief then that the print directory would disappear. It didn’t happen and the book is still going strong and has a place in most homes sitting underneath the phone. But of course, online consumption is powering ahead and at some stage I am sure it will all go online.
But in light of PC Magazine’s decision, is this going to be a watershed moment for the PC and technology magazine industry?
Arguably, PC Magazine has been the world’s number one PC publication for much of its history, so this decision will make many other publishers take note and consider their strategies.
Personally, I think online is not a problem and in fact opens new opportunities for us and our clients: deadline cycles change, faster news cycles, more opportunity for video, for reader comments and so on. Also, much easier to track and monitor stories. Bring it on.
But with the global financial crisis and such a Goliath dropping its print edition, it’s hard not to imagine it won’t have some kind of knock-on effect. Let’s hope not. Long live technology magazines, if not in print, online.
David Carlson: Social Media and Traditional PR