Daily Archives: July 5, 2009

Questions in Air at Allen and Co. Media Summit

I just wonder, after years of feting MySpace and Facebook and Twitter, whether the media industry’s largest companies and their investment bankers will realize that most Web 2.0 entities are muddled fringe players.

The next well-hyped social-networking site probably isn’t the prescription for all that ails the media industry, which admittedly needs to think carefully about the creative and not-so-creative destruction that technological innovation has wrought.

Such introspection and deliberation, however, are unlikely to lead to acquisitions of dodgy startup companies that have no idea how to generate revenue or profits.

The big media companies — most of them, anyway — still possess brands that have greater commercial value than anything a Web 2.0 startup could bring to the table. In most instances, the ideas and technologies behind those web startups are not patentable intellectual properties. Barriers to entry are minimal, and sustainable technological advantage usually isn’t a practical consideration.

The solutions to many of big media’s problems can’t be bought from boutique investment bank. Media’s titans need to think through their dilemmas, realistically look ahead at how demographics and technological evolution will continue to roil their once-peacebale waters, and then devise practical strategies that leverage their brands and partnerships to best effect.

They can remedy at least some of the problems they created for themselves. They don’t need to throw money at media neophytes who will bring a different set of problems along with them.

Viable Product or Service First, Then PR

The New York Times ran a feature article today in its business section ostensibly about how the nature of public relations has changed in an epoch no longer dominated by print and broadcast media.

In the era of Web 2.0 phenomena such as Facebook, Twitter, and blogging, public relations must adopt new strategies and tactics to remain relevant and effective, reporter Claire Cain Miller suggested.

It’s an interesting thought, and there’s some merit to the argument.

But to these jaded eyes, the story seemed a cleverly devised advertising vehicle for Brooke Hammerling and her company, Brew Media Relations. As the story unfolds, the writer grapples less with big questions about media and promotion and focuses more on how Hammerling seems to know everybody in Silicon Valley and beyond.

Still, at one point in the story, light shines through. Talking about a company called MobShop that she promoted in 2001, Hammerling notes that it got “more press than I’ve ever seen,” but that it still died.

Said Hammerling:

“It shows that P.R. can’t be the end-all and be-all,” she says. “Everyone knew who they were, but at the end of the day, they couldn’t make any money.”

Whatever one thinks of the remainder of the story, that’s a nugget to take away and remember.

One can attempt to polish and shine a ball of dust, but it will never be a diamond. Similarly, technology executives can mount an aggressive public-relations campaign, getting somebody such as Hammerling to attract the notice of various industry grandees and media potentates, but public relations – no matter how it’s executed –cannot and will not, in and of itself, make a technology business successful.

Public relations, whether aimed at new-media bloggers or old-media newspapers and magazines, can help spread the word about a new product or service; but it is incapable of creating a good product or service.

At the end of the day, a company must have a product or service that delivers value to customers, be they consumers or businesses. If it doesn’t have that, all the PR in the world won’t make a difference.

Yes, PR can draw attention to a company, and to its product or service, but that’s all it can do. Once customers investigate the company in question, they’ll make their own decisions as to whether the product or service on offer has value or utility. If they decide the offering is irrelevant to them or of poor quality, the PR payoff will have been negligible and fleeting.

Even Web 2.0 companies need to keep that in mind. Before launching the PR salvos, they should start with a well-defined product or service that delivers tangible value to a clearly identified target market, sometimes known as cusotmers. They should do the market research, submit to the discipline of rigorous product management, and come up with a well-qualified creation. Then, they ought to try to devise a sustainable business model, one that ensures ongoing revenue and profitability. This tends to be the hard part, especially for Web 2.0 companies, as evidenced by the chronic business-model struggles of putative success stories such as Facebook and Twitter.

When all that is sorted, these fledgling companies will be ready to take their messages to the world, or to that part of the world that will care about what they’ve created. Then, and only then, should they unleash the media-relations hounds. If they make that move too early, they might get some exposure, which tends to gratify egos, but they will not see meaningful business benefits.

After all, nobody wants to end up like MobShop.