Watch your back, PR is about to steal your lunch

A quick definition before we go on. When I refer here to social strategy I am assuming that we agree it’s simply a strategy of getting into the brand into the consumer conversation. If we agree on this it’s something PR agencies have been doing this for years.  Even before social strategy had a name, PR was beginning to encroach on territory that used to be the domain of advertising firms. They used chiefly to pitch story ideas to media outlets and try to get their clients mentioned in newspapers. Now they are into organising events and web launches. Christopher Graves, the boss of Ogilvy Public Relations Worldwide said that in future “when you look at advertising versus public relations, it’s not going to be those clearly defined silos, It may be indistinguishable at some point where one ends and the other begins.”

This you might say is just big talk from the PR leadership believing their own hype! But while the rest of us in the media world have suffered in the past year, it has been much better for PR firms. According to data from Veronis Suhler Stevenson (VSS), spending on public relations in America grew by nearly 3% in 2009 to $3.7 billion. This you will say has been all the work the banks and car manufactures have needed to make us love them again but PR’s growth looks even rosier when social marketing is included, this has increased by more than 10% in 2009 and VSS forecast that overall spending on PR in America will more than double to $8 billion by 2013.

Perhaps these figures are only relevant to the biggest and most established PR firms and just to put this budget into perspective, US advertising media revenues alone (not counting creative spending) remain at around $150 billion a year. PR spending is less than 3% of that and online media alone is already 10 times the spend on PR. However the timez they are a changing. The same billions spent each year on media continue to contain an enormous amount of waste that marketers [their financial leads at least] are becoming less tolerant of.

A new study by Forrester and The Association of National (US) Advertisers seems to back up this point. Out of a survey of 104 U.S. advertisers that collectively spend almost $14 billion in measured media, 62% said that TV advertising is less effective than it used to be. While a 2008 survey found advertisers committing 58% of their media budgets to TV, the new crop of respondents indicated they had allocated less than half their budgets to TV in 2009. Of the marketers surveyed, 73% plan to shift that money into online advertising, 59% to search-engine marketing and 46% to e-mail marketing and a whopping 77% [that’s 3 out of 4 people0 say they plan to shift TV dollars into social-media investments in 2010. Only 15% said they plan to increase spending in traditional media such as radio, outdoor, magazines or newspapers.

PR in the recession has done well in part because it’s simply cheaper than mass advertising campaigns. Its impact, in the form of favourable coverage offline or online, can be measured [I hear some sniggers] at least as well as traditional media. But if more spend went PR’s way, combined with new digital measurement tools like BuzzLogic, Radian6, TNS Cymfony,  Buzzmetrics, the argument for what offers more ROI will be clearer.  Think of a future world where the billions spent on mass advertising and production is actually put into actual value to the buyer. Personally I believe that this real value will create its own momentum that will be amplified by a good social strategist partner.

So who do you offer my social strategy budget to?

So the question for those marketers is who will do my social strategy best? Will it be at their Media agency, their web company, their PR agency or will they look to a growing number of specialist Social strategy agencies? Many big firms have already chosen their strategy to be overseen by PR staff. PR firms are increasingly called on to track what consumers are saying about their clients online and are trusted to respond directly to any negative commentary. So I am betting PR will in the short term at least will grab a disproportionally big slice of this action.

The macro factors that will drive the drift to PR will be as follows. 

1. The falling price of content: The ongoing global recession and related fall in media spends has exacerbated the cost of content debate. With no obvious workable solution yet the focus is on cost containment rather than revenue growth. The price of generating content will then continue to fall to compete with low cost bloggers and UGC. The trend to have fewer Journalists and those journalists will work harder and have much less time to create original, planned and researched work. So a well-written press release slipped their way at an opportune moment is likely to get happily pasted in rather than given the full and proper editorial treatment. The net result is the news will be increasingly PR driven.

2. The shift of news from mainstream channels:  Over that last 5 years especially the growth of alternative sources of news and information has accelerated. This means that opinion formers are now more numerous and talking to one editor of a mainstream newspaper does not a story make. You have to get out there and court bloggers that think they are the new world order. PR has already been doing this, for years. Where does media start on this process, outside of placing ads and sending people to the story?

There is of course the argument that social conversations are not about selling that all PR companies do is pitch stories to media outlets and hope one sticks. In other words they force the conversation on the public and measure success on how many channels and how often that story appears. I agree that they do this, but is it not also naive to assume that all conversations, from the ones that you have with your friends and family to work conversations are not about selling something to some degree.

3. The waste factor in traditional media: The biggest argument to keeping PR as a support function is it does NOT drive markets on a consistent day-to-day basis and it never will. This may be true but this big-stick approach to marketing must have a finite number of years left due to the enormous waste. PR is benefitting from the cost cutting exercises of the recession as it is currently cheaper and the proportion of waste is not as enormous as a result. Also it’s worth remind us all that the world’s biggest brand Google grew not from mass media advertising, but from the social networking effect alone. This is a big shift from the Coca Cola school of brand building. They focused on the product, listened to feedback, people talked about how great it was and evangelised it in a very short time.  That’s driving the market through social strategy so if you had a product that is better than your competitors would it not be wiser to try an alternative to our traditional mass media approach, and let your PR agency have a go.

4. The skill sets needed: As mentioned in the second paragraph, Social media must encompass on and off line media. Its a process of ongoing review, assesment and response. What appears in the press piece must be consistent with the blog piece, which must complement the event. Their must be constant vigilance and not the plan, lock, run, report approach of traditional media. So the skills needed within media agencies are lacking and this is more a PR job.

So the field looks vacant and the team that seems best prepared to meet the challenge may well be the PR firms. However regardless of who takes the lead in Social strategy implementation land grab there will be different degrees of change needed within all contender structures, in the skills and cultures necessary to do the job properly.