The New York Times is about to announce that it is starting a hyperlocal product called The Local working with our students at CUNY’s Graduate School of Journalism. PaidContent has the story early. So I’ll tell you about the school’s and my involvement and plans.
At CUNY, we were working on a hyperlocal plan of our own, aimed at taking one New York neighborhood and turning it into the ultimate hyperlocal community as a showcase to both demonstrate how a community could be empowered to report on itself and to create a laboratory where our students could learn to interact with the public in new and collaborative ways. The problem with teaching interactive journalism, which is what we call my department, is that students don’t have a public with whom to interact.
I spoke about our needs and plans in a trade group meeting of online editors in The Times building and the paper’s digital head, Jon Landman, pulled me aside to say that The Times had its own similar plans. We decided, I’m delighted to say, to team up.
The Times is working in two neighborhoods in Brooklyn — Fort Greene and Clinton Hill — and three towns in New Jersey — Maplewood, Millburn, and South Orange. In each of these two pilots, they’ll have one journalist reporting but also working with the community in new ways. The Times’ goal, like ours, is to create a scalable platform (not just in terms of technology but in terms of support) to help communities organize their own news and knowledge. The Times needs this to be scalable; it can’t afford to – no metro paper can or has ever been able to afford to – pay for staff in every neighborhood and town.
We also need to find the ways to make this new structure sustainable with ad revenue; that’s why I’ve asked the business school at our fellow CUNY campus, Baruch, to lend business expertise, working with The Times’ business people. We need to find new ways to both serve and sell very local advertisers.
At CUNY, my faculty colleagues Sandeep Junnarkar (fellow interactive prof) and Jere Hester (head of our NYCity News Service) recruited a half-dozen students from many eager volunteers. They will work with the Times’ reporter and editors in Brooklyn to both report and help the community work on its own in ways we can only imagine now: recruiting people, training them, creating crowdsourced reporting projects, helping people create their own sites, and more. These are mostly new frontiers. Our students will also work on the project during the summer, as Times interns, to provide continuity.
We at CUNY are seeking a grant to then take this all up a few notches. If we are successful, we plan to hire a part-time faculty member to oversee the project, work with other faculty members in other courses (e.g., we offer an urban reporting track), and probably create a course around the effort. We will hire trainers to offer hundreds of locals courses in the essentials of new media tools and journalistic practices and buy some equipment to support that (think: lots of Flips). And we would record our lessons learned in a blog and manual for the benefit of other news organizations, communities, and journalism schools.
The entire effort kicks off this coming week with Phase I (that is, what we can do before we get full funding). See comments from Timesmen under the Brownstoner , TechCrunch , and PaidContent posts. I think there’s a bit too much talk there about using free labor from bloggers and students. Instead, I hope we’ll see economic models that help support their work and encourage more to join in. But everything in its time.
At the same time, there are other hyperlocal projects in New Jersey in which I have a glancing interest. Friend Debbie Galant at Baristanet – the queen of the hyperlocal bloggers – is now so successful that she is expanding, doing a deal with one other local site in Montclair, and planning to expand in more areas. She talks about it here. And there is Patch, personally funded by Google’s Tim Armstrong, which is covering the same towns in Jersey as The Times; he wants to help communities organize what they know.
The one bit of advice I’ve given all these players is not to compete but instead to collaborate. We have to move past the old newspaper notion that one organization will – and can afford to – “own” a town. Those days are over. Instead, we’ll have ecosystems of local news linked together, and to support them we need complementary content and coverage and networks to sell ads into and for all the players. In a network that links to its own members (as Glam as proven) all ships will ride with the tide of links.
Whether my Kumbaya intentions can come true or not, we at last may be on on the verge of finally tickling the golden fleece of hyperlocal. It matters that The New York Times is trying to build a platform to cover local communities not with its own staff but by empowering those communities. It matters that a technology and advertising leader like Armstrong is investing in local. It matters most of all that a journalist like Galant is succeeding at reporting on her communities – journalistically and commercially.
When I envision the future of local news – what rises out of the ashes of metro dailies (and witness this week’s news: they are burning) – these are the kinds of structures I envision at the center of it: new slices adding up to a new pie. There will still be news organizations – and their job will, indeed, be to organize news – but they will no longer be at the center but at the periphery, helping those inside. There will be people who contribute to the ecosystem for many reasons: to make money, to inform the community, to learn, to catch the bastards. There will need to be an economic system and model that can support the best of this. That’s the hardest part, I think. But this is a start. Bravo for it.
It’s with profound amusement that I read Newsday will attempt to “end the distribution of free web content.” (Next, Cablevision will try to charge us for its deeply boring News12 that no one watches.)
But it’s with profound sadness, exhaustion, exasperation, and deja vu that I read Hearst’s memo about its attempts to update – a memo that could and should have been written and tried out 12 years ago (I’m sure people in this company and others did write versions of it; I know I did). If these actions had been taken back then, there still would have been time to make change and survive. But that time is over. Now the memo comes off only as desperation as the company threatens to close its papers in San Francisco – its onetime center of gravity – and Seattle. Now it is too little, too late.
The memo wishes to charge for online content. See above. It also fantasizes about charging more for the print product. “Our print subscribers don’t pay us enough today that we can say they are actually paying for content. Rather, we only ask readers to pay for a portion of the cost of printing the paper on newsprint and delivering it to the reader’s doorstep. We must gradually, but persistently, change this practice.” That’s put precisely 180 degrees from how it should be put: not what the public owes the paper for its expenses but what the journalism printed on that paper is worth. I was just in San Francisco and read the Chron there. I can’t imagine paying for the product I saw every day in any medium. As I travel across the country, I have to say that’s too tragically true of too many local newspapers, many far worse. They’ve cut themselves into irrelevance or just crappiness rather than concentrating their resources on what would make them truly valuable.
It says they need to find efficiencies and savings. That has been the case for years. It notes that “all newspapers look pretty much alike” and so they should be produced with shared services; I can’t believe that chains did not do that a decade ago. Why didn’t they share those expenses so they could concentrate resources on reporting – on value? Turf and ego, probably.
It says that papers must serve new populations of smaller advertisers with new sales methods: “…we cannot afford to do so by calling on every advertiser in person every other week and then having a team of artists build and rebuild their ads.” Let me dig my memos about that out of the file. Hearst’s memo says: “…we must fully make the leap from simply selling pages to selling audiences.” Yes, but that was the lesson and mantra about 10 years ago. Now, with a new population of marketers – smaller, more local – and with search and Google and maps and mobile changing the local economy utterly, the goal has shifted past “selling audiences” to helping local businesses enhance their services and relationships and using anything – even Google – to do that. Plain, old advertising won’t cut it, no matter how you sell it.
It says that “we have a revenue and business model problem as opposed to an audience problem.” Well, yes and no. The audience online has grown. But engagement with newspaper sites is short and sporadic versus true community services. The question is whether, when papers disappear, the community will care or shrug because newspapers were not enough part of their communities, serving them as platforms instead of products.
At long last, the memo sees the need to get rid of printing costs. It says Hearst will use outside printers to get more color (presumably because they think they can charge higher rates for that). I’d say the way to get rid of printing is to get rid of paper and move to the future. But that’s still too radical.
It finally recognizes the opportunities to collaborate with the community: “We must do a far better job of reaching out to prominent citizens in our communities, those who already have a blog and those who don’t, and providing them a prominent platform to state their views. We must develop a rich network of correspondents to help us grow the deepest hyper-local community microsites in our markets.” That is the key revelation that should have come long ago, but I won’t grouse: It has come at last. See my upcoming post about The New York Times and hyperlcoal.
At the end, the memo brags that they have a new marketing campaign on the way. That’s the last thing they need. A good platform serving the community will sell itself. A bad product can’t be sold no matter how much you advertise it.
Bottom line: Hearst says it will try to get 50 percent of revenue – to support a business 50 percent smaller, according to reports about San Francisco – from circulation and digital advertising. Good luck. I mean it: Good luck.
I’ve been saying recently that I realized I thought we’d have a peaceful passing on of power, like Jan. 20, from the print president to the digital president (and the metaphor ain’t far off). But more and more I see that there won’t be an orderly transition. There will be destruction. There will be voids. But out of that will grow new news
On the verge of extinction, the SF Chronicle and Newsday decide, after “emergency” meetings, to put up paywalls. It’s not a risky move, any more than it would be risky for a hospice-bound cancer patient to start an aggressive course of Jack Daniel’s therapy. And, it’s about as likely to work. There might well be examples of businesses that bought their way back from the brink by raising prices. I’ve just never seen one.
So now the American society of Newspapers Editors has canceled its annual meeting, joining the Magazine Publishers of America, joining the World Association of Newspapers and the World Editors Forum before them. There aren’t enough dollars to send them to Vegas or its equivalent. And the way things are going, there won’t be enough of them to get a quorum anyway.
I was wrong about the Kindle. When I unboxed it two nights ago, I excitedly bought my own book to feel all cyber and tweeted about it. But the book wouldn’t show up. “Opening,” it said forever. Two hours went by and I called Amazon (which – new for them – made the phone number easy to find and answered it in a minute). The lady said the modem had to be fully charged. That made no sense; it would mean essentially that it would never work unless plugged in. But, fine, I waited for the green light. Still no book. Two hours more. I called Amazon again. The man said it must be a defective unit and he nicely said he’s ship a replacement (this is why I am happy I have Amazon stock). I chronicled my frustration on Twitter, and word passed around there.
The next day, I tried the Kindle in Manhattan and it worked fine. Two more tests verified that the problem was not the Kindle but Sprint, which was never great at home when I had a Sprint Treo but would at least work. Now, it took more than four hours to download a book and even going to a new store menu page takes minutes. I confessed my mistake on Twitter and shifted blame to the phone company. Sprint monitors Twitter – that’s the good news – but they might as well not, as the Sprint guy merely tried to sidestep responsibility, saying that there wasn’t a network outage (I didn’t say there was) and shifting blame back to Amazon: “Spoke 2 @Sprint Care, Retail. Kindle issues should go 2 Amazon customer care.” Amazon should learn to pick its partners more wisely in the future. And I need to learn to cram caveats into tweets when I have problems.
So now I have a Kindle that works in some places, not others – and not working at home may be a killer. This is why I wish it came with wi-fi, or at least the option (especially for when I travel overseas). I prefer my control of communications on my iPhone. But then the problem with the iPhone is also that it has to be connected; I’d like to download content – such as the New York Times – to it so I could read the paper on the train.
The iPhone and Kindle are a study in contrasts. The biggest is, of course, the business model: One may buy books on either, but current content on the iPhone will, in most cases, be ad-supported; on the Kindle, it is paid for by the reader. The iPhone UI, right down to its flowing scrolling on its touchscreen, is elegant and happy; the Kindle is klunky and irritating. The Kindle lets me download and read anywhere; I like that; the iPhone won’t let me download The New York Times to read on the subway and that’s too bad. The iPhone lets me control my communications better. The Kindle screen is larger, yes, but the iPhone isn’t that much smaller:
So I’m undecided about the Kindle. Its organization is still inelegant to say the least. For example, when reading the Times, it wants me to go story-by-story – that’s bookthink. I want to see the menu of articles in a section. But when I then go to an article and page through it, to get back to that section listing, I have to go back to the top and then back to the section. When reading a book on either device, I miss easy ways to thumb through.
If I traveled a great deal and took books with me everywhere – which I don’t – the Kindle would clearly be a godsend. And maybe it will make me start traveling with books – and reading them – more often, as the web has been bad for my book reading habits. But I’m still not sure.
I also wish that the business model of book publishing were different: that I could buy the contents of a book and get it in any and all media: I could read it on paper when I’m home and on Kindle when I’m on the road and listen to it on my iPhone when I’m driving. I disagree strongly with Roy Blount Jr.’s assertion on behalf of authors (other than me) that the Kindle shouldn’t be reading books aloud to readers because it would cannibalize audio-book sales. This assumes that people who buy the print book also buy the audiobook in great numbers and that having a book read by the computerized and irritating voice of a Kindle will hurt sales. No, I think a book should be sold as a package: buy access to the ideas and get them however you like. I think that would spur greater sales. The next step is to move past selling books as a product, frozen in time, and start selling them as a process. But that’s a post for another day.
I’m holding onto my Kindle for now. I was wrong about it at first blush and so I need to give it more of a chance.
When I visited the Bay Area last week, I first went to Google and the next day, for old time’s sake, I met a long-ago colleague in the historic John’s Grill in San Francisco and then revisited the Chronicle and former Examiner newsrooms for the first time in decades. I had left the Examiner in 1981. The contrast could not have been greater and the ghosts more evident. Google was bright and shining and optimistic with ideas and invention. The Chronicle was dark and dusty and depressing (and the Examiner was already as good as dead).
Well, now the Chronicle may die as Hearst announces – like the Star-Ledger and plenty of other papers before it – that if concessions and cuts are not found, the paper will fold. San Francisco would be the first major American city left without a daily newspaper.
I see this as an opportunity squandered. Here was the paper atop Silicon Valley that should have seen the changes in our world clearer than any other, that should have anticipated the importance of October, 1994, when the commercial browser was introduced, that could have reinvented itself over a luxurious decade and a half. But now, instead, it’s hurry-up-or-die for the Chron.
Before I moved out of San Francisco, the friend I had lunch with the other day and I went to the basement of the old Hearst building as it was moving and we were invited to pick up junk before it was hauled away. Junk, hell, it was history. I have on the wall in my office at home a framed statement from WRH – William Randolph Hearst – admonishing his staffs:
To Publishers and Managing Editors of All Hearst Newspapers
Please keep our newspaper NEWSpapers.
Please do not allow them to degenerate into propagandistic organs….
That Examiner was, you see, very bloggy. It was opinionated, no matter how much WRH protested that it was fair and balanced. It was entrepreneurial. It was the start of an era, not the end of one.
I say in my entrepreneurial journalism class that for the first time since William Randolph Hearst himself, journalists can think and act like entrepreneurs. They can start new news enterprises with the vigor of a WRH or a Nick Denton or a Mike Arrington or a Krishna Bharat (the creator of GoogleNews) or a Upendra Shardnand (my partner, founder of Daylife).
If – Hearst forbid – the Chronicle dies, I have no doubt that something will rise from its dust and ashes to serve the news needs of the Bay Area. But the transition will not be orderly, as I once thought it could have been. There will be destruction as people in that newsroom – a few of them, a very few of them, old colleagues and friends – lose their jobs. But then a new WRH will come into town and create a new Examiner for a new age. Bet on it.
I’ll be assisting Michael Rosenblum in teaching a one-day seminar at CUNY’s Graduate School of Journalism on March 28 (10a-3p) on joining the video revolution in news and media. If you’ve never had the chance to catch Michael in action, believe me, you’ll want to; he’s compelling and convincing and empowering and helluva lot of fun. I’ll be adding my views on the opportunities in the fundamental changes in media for what promises to be a rich and meaty discussion. Details are here.
[Disclosure: The fee for the seminar goes to CUNY, where I teach; apart from my princely professorial pay, I'm not profiting personally... though I do get an alliteration bonus.]
“They are doubling down on the technocratic approach,” Siva Vaidhyanathan, who’s writing The Googleization of Everything, said in today’s NY Times responding to news that Google.org will focus its philanthropy more on its own science and technology and integrate its charitable arm more with the company. Agreed.
But then he adds in the Times: “The habits and ideology of the company will lead the philanthropy rather than the needs of the communities or the planet.” No, I think it’s actually more hubristic than that: Google believes its technology, science, methods, and intelligence are best suited to solve the needs of the planet.
On its blog, Google.org head Larry Brilliant said – as he announced that he’d be moving to corporate to become philanthrop evangelist and would hand over the foundation to long-time Googler Megan Smith:
During our review it became clear that while we have been able to support some remarkable non-profit organizations over the past three years, our greatest impact has come when we’ve attacked problems in ways that make the most of Google’s strengths in technology and information; examples of this approach include Flu Trends, RechargeIT, Clean Energy 2030, and PowerMeter. By aligning Google.org more closely with Google as a whole, Megan will ensure that we’re better able to build innovative, scalable technology and information solutions. As a first step, Google has decided to put even more engineers and technical talent to work on these issues and problems, resources which I have found to be extraordinary. In this global economic crisis, the work Google.org is doing, together with our many colleagues around the world, to help develop cheap clean energy, find and fight disease outbreaks before they sweep the globe, and build information platforms for underserved people globally, is more important than ever.
In moment such as that, we see how Google think its ways can solve big problems. And maybe they’re right. We can only hope so.
For today’s 30 Days of WWGD? snippet, here’s an excerpt from the chapter about Google.org’s technocratic method brought to the energy and environment: the essential scientific optimism of invention as a means of solving problems:
* * *
Here is our one example of an industry being remade in Google’s image that is not hypothetical. Google?.org, the company’s philanthropic wing—supported with 1 percent of Google’s equity and profits—is trying to reinvent the energy industry and with it, our energy economy. It is funding companies and research looking for ways to make power that will cost less than that generated with coal. Their geeky name for the initiative: RE
Unlike Google?.org’s other projects—devoted to early warning of health crises, better management of public services, and entrepreneurial growth in the developing world—RE
At the World Economic Forum meeting at Davos in 2008, I attended a forum at which Google’s founders presented their energy vision and I came away with a sense of how they would manage other industries and even how they would run the government (more on that later). It gave me a window into the engineers’ worldview. Just before this Google?.org forum, I had attended a session with Bono and former Vice President Al Gore. They presented their core causes: extreme poverty, debt forgiveness, and disease for Bono; the planet for Gore. The two men tried to insist to the powerful in the great hall that their causes were complementary—can’t solve one without addressing the other, they agreed—but in truth, they were competing for the political and economic attention of the governments and corporations there. Gore spoke with passion, even anger, as he insisted that the way to attack global warming is carbon taxes, regulations, prohibitions, sacrifices. He delivered the environmental agenda we’ve often heard, and did so with authority and determination.
Then I went up the mountain to hear the Google team—founders Page and Brin with Google?.org executive director Larry Brilliant. The contrast was stark. To summarize if not oversimplify their vantage points: Where Gore demands taxes and regulation, the Google team proposes invention and investment. Gore and company want to raise the cost of carbon—the cost of polluting—whereas the Google team wants to lower the cost of energy. I’m a bit unfair to Gore, for he would argue that the proceeds of his taxes would fund technology development. But Google doesn’t need tax dollars. If it were a country, its $20 billion revenue would rank it about 80th in gross domestic product. It can invest in energy research on its own.
Still, we see different worldviews at work. “You can’t succeed just out of conservation because then you won’t have economic development,” Brilliant said. “Find a way to make electricity—not to cut back on it but to have more of it than you ever dreamed of.” More power than you ever dreamed of. Create and manage abundance rather than control scarcity—as ever, that is the Google worldview. Whereas Gore talks about what we shouldn’t do, Google talks about what we can do. There we see the contrast between the politician’s brain and the engineer’s. Google people start with a problem and look for a solution. They identify a need, find an opportunity, and then systemically, logically, and aggressively attack it with innovation.
Page explained that there is a market now for green energy at 10 cents per kilowatt-hour. Some people and companies want to buy it, though it is expensive, because they want to do good or need good PR. But the true market cost of energy is still far below that. Google?.org wants to find a way to produce renewable power at three cents per kilowatt-hour, cheaper than coal, which not only gives them a good deal but also shuts down dirty coal plants.
If it succeeds, the foundation would change Google’s business and other entire industries, starting with autos. With energy that cheap, Google?.org envisions cars plugged into the power grid, solving the problem of pollution from burning gasoline and changing the political balance of oil power (though they point out that the power grid is in woeful need of an upgrade). Google is also supporting an electric-car initiative called RechargeIT, which is trying to accelerate the adoption of plug-in hybrid cars. As a demonstration, Google is converting its own fleet of cars to modified, plug-in Toyota Prius hybrids. Google set up web pages for every car to display data about its energy efficiency—we know how Google loves data. Those cars are plugged into solar-powered charging stations on Google’s campus, where the company was producing 1.6 megawatts in solar power by 2008. “It’s been great,” Brin said. “It produced shade. It reduced cost.” Google created a platform for electric-car devotees to make YouTube videos and place them on a Google map, demonstrating popular support and demand for the cars. Google clearly believes it can help create a market for plug-in cars—and why not? It has created new markets for technology and advertising. . . .
If Google did run a power company, what would it look like? It would give us all the power we could use at the best price possible, and then it would find ways to take advantage of that. Google could use the power grid itself to distribute the internet and that, too, would help Google, creating more advertising revenue, which could be used to subsidize the cost of our power and access. Google would give us data about our use of power—especially as more appliances become internet-connected. Imagine if every house were to have a web page detailing power usage by every device, as Google has done for its cars. That data would tell us how to conserve (if we even needed to anymore) and it would tell Google how we live (which, in aggregate, will make Google smarter). In his book Hot, Flat, and Crowded, Thomas Friedman proposed a similar future with connected devices that manage their own power. If we can generate our own homemade solar, wind, or geothermal power, I have no doubt Google Power & Light would create a marketplace for us to sell power to the grid or donate it to charities. Power could become not only a new market but a new currency.
* * *
[Note: Google recently announced PowerMeter, which begins to do these things.]
It’s a damned shame – but not a surprise – that the company that publishes the Philadelphia Inquirer and Daily News just filed for bankruptcy, joining Tribune, Journal Register, and more surely to follow. There’s a reason I picked Philadelphia as the poster child in my New Business Models for News Summit: destiny. Brian Tierney and his fellow investors took over the Philly papers with the best of intentions but running them under the old economics of newspapers and hedavy debt was doomed to failure; the recession only accelerated that ride down the slope. We need completely new models for news, not old models adjusted by increments. But bankruptcy can be an opportunity to make drastic moves (as I suggested with the LA Times) and it is also an opportunity for a new player to ender the market with new methods.
LATER: But Forbes reports that even while sliding down the slippery slope, he took a big raise.
PR magnate Richard Edelman takes me to task for arguing in What Would Google Do? that PR people, like lawyers, can’t be Googlified. After saying nice things about the book, he adds: “But it is hard to love a book that assigns your profession to the scrap heap of history. Jarvis contends that lawyers and PR people cannot evolve their business models ‘because they have clients….’” He urges me to reconsider (or at least to separate PR from lawyers).
OK, I’ll try. I’ll take inspiration from Doc Searls’ VRM (vendor relationship management, as opposed to customer relationship management) and from adman Rishad Tobaccowala’s argument, in the book, that agencies should focus on consumers – on agencies’ customers’ customers – and “should be the champions of those people.” [Snippets below.]
PR and ad agencies are at war – undeclared or at least quietly declared – to take over more of clients’ marketing budgets and also to help recast companies’ and brands’ relationships with their customers given the realities of the new world I describe in WWGD?. Those goals may be in conflict. Let’s start with the latter.
I argue in the book that the goal of companies and brands must be to have direct relationships with customers, cutting out the middlemen of ads and PR (and – newspapers, magazines, and TV be warned – media). This new agency should try to help them have that direct relationship. Then it should, in the words of Craig Newmark in the book, “get out of the way.” In that sense, the agency is a consultant and when its job is done, it should exit. That’s not a very sustainable business model, particularly for ad agencies, which make a cut of what they spend for clients and thus are never motivated to help companies spend less on ads. In that way, PR agencies have an advantage; they already act as consultants.
PR also acts as a company’s mouthpiece and that puts them in conflict with the ethos of the Google Age, when we distrust the institutional voice and expect to have a human conversation (see Cluetrain: markets are conversations held by humans). Don’t you hate it when so-called customer-service people at phone, cable, and airline companies say they they won’t do what you want as they insist on explaining their policy. I tell them that I have a policy, too, and they should listen to it. They don’t. It’s not in the script.
So if there is any vestigial middleman in our relationship with companies, shouldn’t that be our advocate who explains our policy to the company? That would be the new, inside-out agency. It would represent our interests and help make our case and make the company smarter (which will make them more money). If you want a good relationship with your customers, doesn’t that simply make sense? When I visited Google, I met someone at the book talk who said her job was “customer advocate.”
There’s just one problem with being a customer advocate as an employee or agency: Who pays you? Who’s the boss? I come back to the reason I argued in the book and the reason Edelman argues with me: Being paid by the client puts you in the service of the client. Can there be a church/state wall, as there has been in newspapers, that allegedly separates the holder of the public’s interest – the journalist – from the revenue – the advertisers? Well, indeed, perhaps a PR agency could be that. Perhaps it could act as the voice of the customers.
But to maintain its credibility with those customers, this advocacy agency would need to fire clients when they don’t behave. To get quite specific, if I were the agency for Wal-Mart – which Edelman is – I would have fired them (or as an employee, I would have quit) after so many of the deaf-and-dumb things that company has done to harm its relationship with its public. (I’ll let you fill in your own litany of sins.) But Edelman hasn’t fired Wal-Mart and I well understand that. Wal-Mart pays them a lot of money. Wouldn’t it be foolish to pass that up? Wouldn’t firing them make the next client skittish about hiring an agency might embarrass them by firing them?
Richard Edelman argues in his blog post, as he punctures my myths: “No client is worth the risk of long term damage to the reputation of the PR practitioner or its firm. We recognize that relationships with reporters, with the public and other stakeholders are a true asset, imperiled by obfuscation or prevarication.” Does that necessarily say that Edelman endorses Wal-Mart’s behavior and its sins, or at least slow learning? Or if they are trying to fix Wal-Mart, aren’t they judged on that success? It does affect the company’s reputation with consumers and those other stakeholders.
That is the PR agency’s risk. That is why I still wonder whether PR people can be open and transparent and keep their income.
But perhaps there the possibility of creating a new kind of agency that is really is owned by the public – the people formerly known as consumers – that is so good as representing customers that companies gain credibility by working with it and paying attention to its precepts. That, I think, is what Doc Searls is trying to build with VRM: a platform for that new relationship. Is that the new agency?
* * *
For today’s 30 Days of WWGD? snippet, then, we bring you snippets from the advertising chapter:
To quote Google’s own No. 1 rule, “Focus on the user and all else will follow.” Australian ad executive Peter Biggs spoke for much of his industry when he told ABC Radio National’s The Media Report: “It’s a consumer-driven business, but they are not our most important audience. Our most important audience is our clients, and their brands.” Tobaccowala says the opposite. “Our fixation should not be on our clients. It should be on the people our clients want to engage, sell, and interact with. We should be the champions of those people. That is where we are missing the boat.”
I wonder whether focusing on the consumer instead of the client ends up usurping much of the job of the agency as we know it. Fixating on customers should be the job of everyone—everyone—in a company. In business, we’ve long said we’re customer focused. But today you have to mean it or your customers will call your bluff. Focusing on customers can’t be outsourced to agencies.
Agencies will resist change until the economics of the industry change. Because agencies make a cut of what they spend, they are motivated to spend more on ads rather than to replace ad dollars with more valuable relationships between brands and customers. So clients may be the first to evolve. Just as I tell newspapers to imagine a day when they stop the presses and book publishers to think past the book, so I advise marketers to imagine as an exercise firing the agency, canceling the ad budget, throwing out the ads, and starting over. What is your relationship with your customers then? Where should you put your money? Where should you spend your first ad dollar and why?
Start, of course, by investing in your product or service. Tobaccowala said no amount of advertising will make up for a bad product. “Stop this yelling and screaming about what’s your Facebook strategy,” he tells clients. “Make absolutely certain that you have a great product or service. Make absolutely certain you have great customer service. Those are the first two rules of so-called advertising in this world. If you don’t have those, don’t pay any money to anyone to do anything.”
Then turn the relationship with the customer upside-down. First, invest in customer service, making it a goal to satisfy every single customer. Remember that your worst customer is your best friend. Second, invest effort in social tools that enable customers to tell you what you should be producing; hand over as much control to them as you can (I examine this idea from another perspective in the chapter on manufacturing). The goal must be to produce a product people love. All companies claim that customers love their brands. But I mean customers love your product so much they want to tell the world—that kind of love, Apple love. Third, hand over your brand to your customers—recognizing that they have always owned it. Don’t tell them what your brand means. Ask them what it means.
Every product is great; every relationship is satisfying—shoot for nothing less. So now you are spending quality dollars and relationship dollars over advertising dollars. You have handed over control of the product and the brand and gotten out of the way. If you haven’t gone out of business by now and convinced every boss, board member, analyst, reporter, and stockbroker that you’ve gone mad, then it probably worked.
Won’t you still advertise? Ask yourself why. To interrupt and irritate random people? No. To convince customers that a bad product is good? No. To inch ahead of your competitor with the brute force of media spending? No. To get people watching Sunday morning shows to buy your stock? Please, no. Do you advertise to tell customers something they didn’t know and need to know about your product, such as an improvement or a better deal? Well, OK. Tobaccowala defines advertising as “the economics of information” (the title of a 1961 essay by Nobel laureate and University of Chicago professor George J. Stigler). Advertising is supposed to tell us about a product or its price so we can save effort, time, and money in our search for it. The internet has made that much more efficient. If the customers’ goal is to reduce their transaction cost—the effort to find the right product at the right price—then doesn’t the internet itself replace advertising? Often, yes. . . .
The agency and advertising need to get out of the way in the relationship between companies and customers. Agencies may help solve problems—teaching companies how to build networks with customers, assisting them with product launches—but once the consultation is done, the good consultant leaves town.
And here is what I said about PR people and lawyers (note that lawyers already protested):
The problem for public relations people and lawyers is that they have clients. They must represent a position, right or wrong. As they are paid to do that, the motives behind anything they say are necessarily suspect. They cannot be transparent, for that might hurt their clients. They cannot be consistent, for they may represent a client with one stance today and the opposite tomorrow, and we’ll never know what they truly think. In a medium that treasures facts and data, they cannot always let facts win; they must spin facts to craft victory. They must negotiate to the death, which makes them bad at collaboration. It’s not their job to help anybody but their clients. They are middlemen. They won’t admit to making mistakes well; clients don’t pay for mistakes.
* * *
Here are the other “myths” Edelman answers in his post:
Myth #2—PR people must spin facts to craft victory. This is to define PR by a tiny minority of political PR agents who are masters of leaking, attacking and exaggeration. The best PR work combines policy and communication, because truth is the most effective approach. Jarvis himself notes the possibility of companies having sites where they share information and are factual as part of “the new ecology of information online.”
Myth #3—PR people only help their clients. PR campaigns work when they premised on both public interest and private gain. There is a mutuality of benefit from a partnership forged between a non-governmental organization and, say, a corporation to grow bananas in a more environmental manner.
Myth #4—PR folks won’t admit to making mistakes well—quite to the contrary, we constantly fight lawyers to get clients to acknowledge their actions, to apologize, and to provide a way forward that is measurable and accountable. . . .
In Jeff’s world, companies speak directly with consumers, giving up control of product development, focusing on customer service instead of marketing/advertising, building strong relationships within communities of interest. Public relations actually plays a vital role in this new construct by making valuable information easily accessible and open for improvement. We provide big ideas that bring together constituencies (such as the Quaker Oats Substance) for action. We also offer advice to companies, encouraging them to take on the big issues of our day that inspire employees while offering new opportunities to make money.
What do you think? Can PR live by the ethos of the internet age: open, honest, transparent, collaborative? Is the inside-out agency possible? Or does the paycheck rule the relationship?
My Guardian column this week on newspapers trying (again) to imagine a world in which they can force people to pay online. (I’m told that the print version has some dropped lines; this is my draft):
Like a gopher in the garden, the notion of newspapers charging for content online keeps popping its nose up out of the dirt. Pardon me while I whack this pesky rodent in the skull.
Mind you, I’m all for charging for content if you can. I’m charging for content myself right now (want to buy my book?). The Financial Times and Wall Street Journal—always cited in this discussion—manage to charge their readers (well, their readers’ employers). And, yes, we pay for movies, some TV, and now music (thank you, iTunes).
But online news is different for many reasons. First, as soon as knowledge is known, it’s a commodity—and not a scarce one that can be controlled. Second, there is no end of competition online. As countless publishers have observed about their nemesis, craigslist, it’s impossible to compete with free.
More important, in the complete P&L of paid content, charging brings expenses and liabilities. It costs money to market to acquire purchasers or subscribers (a magazine in the subscription-heavy U.S. market may spend £30 to get £9 in circulation revenue; profitability comes from advertising—or it used to). Charging for content reduces audience, which in turn reduces advertising revenue. And putting a wall around content keeps it out of the conversation and devalues brands (this is why New York Times columnists were said to hate their paper’s aborted effort to charge pennies for their thoughts).
But here’s the killer: When content is hidden, it cannot be found via search (not to mention bloggers’ and aggregators’ links). In a link and search economy, content gains value only through these recommendations; an article without links has no readers and thus no value. The real cost of charging for content—and it’s a cost born by the content owner—is a loss of Googlejuice.
In the complete P&L of news online, keep in mind as well that costs decline when a newspaper need no longer be all things to all people (it can, in the words of my favorite PowerPoint line, specialize: “Do what it does best and link to the rest”). Costs also fall when the paper can jettison the expense of printing and distributing its words.
It is this complete business model that we should be focusing on as we try to bring news into its next generation, not desperate efforts to shoehorn old models into a new world.
Yet whenever the downward vector of newspapers’ fortunes takes another dive, you can be assured that there’ll be calls—as there have been across U.S. media in the last month—for financial rescue in the form of micropayments; subscriptions; antitrust exemptions to enable newspaper cartels to shut themselves off behind a giant pay wall; wishes for charities to take over newspapers; dreams of government bailouts; hopes that the Amazon Kindle will become a platform for payment; and demands that Google should be forced to share its revenue. In the U.K., there have been rumors that at least one company will try to stand alone and charge for its content. Good luck.
To respond to each: Micropayments have never been shown to work except when distribution is tightly controlled (see: mobile phones and iTunes). Subscriptions have been abandoned by The New York Times and others because the costs, enumerated above, are too high. A newspaper cartel is an oxymoron, as publishers have never shown the ability to self-organize (the last attempt in the U.S., the New Century Network, was a flaming disaster). Charities are lovely, but even the Scott Trust that generously supports this newspaper rose not out of pure altruism but out of a need to avoid inheritance taxes that would have forced a sale. Government support has been discussed in these pages but I, for one, am fearful of the notion of the prey feeding the watchdogs. The Kindle is cool but has a tiny audience.
As for Google: Its detractors have the value proposition exactly backwards. Google shouldn’t be paying newspapers. Newspapers should be grateful that Google doesn’t charge them for the value it shares in links and audience. Google is their generous, free newsstand.
As various bloggers have lamented lately, all this talk of pipedreams and preservation is a waste of precious time when we should be exploring and executing new business models and exploiting new opportunities to transform journalism for a new age.
I had fun this week taping an episode of Press:Here, a Silicon Valley show on the NBC station in San Jose, talking with host Scott McGrew, Forbes’ Elizabeth Cororan, and reporter of many hats Sarah Lacy.
Also on: Facebook Chief Privacy Officer Chris Kelley talked about the week’s kerfuffle. Corcoran and Lacy said they thought that involving all Facebook’s users in a constitutional convention of sorts was mob rule. I said it was Googley to be listening.
