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Opportunities for PR people in the digital revolution

By Kim Harrison,

Consultant, Author and Principal of www.cuttingedgepr.com

Creative public relations practitioners can seize online opportunities to promote businesses and products in ways that have never been done before. These opportunities reflect the long-awaited arrival of the digital age. Consumers are already accessing information and entertainment in new ways that are changing marketing techniques forever. However, many media companies and marketers are only just starting to realize what the changes mean.

Marketers are being forced to realize the changes:

  • Magazines are losing advertising to the Web (ad revenues have declined about 2% per year since 1998).

  • Radio stations are losing listeners, talent, and revenues to satellite upstarts and iPod playlist

  • Television networks are seeing the rise of video-on-demand, video downloads, interactive game networks, Internet TV, and other options that threaten their future.

  • Broadcast advertising revenues declined in 2004 and 2005 – the first-ever decrease in two consecutive years – which is predicted to continue in 2006. 

The winners among brand marketers and media companies are those who:

  • shift their focus to digital media.

  • develop formats to promote interaction with audiences.

  • create new research approaches and metrics that measure outcomes, not inputs.

  • combine “above-the-line” advertising (TV, radio, and print) and “below-the-line” marketing (promotions, sponsorships, events, public relations) in new two-way, integrated campaigns.

  • create their own branded entertainment assets and appeal to customers directly through them.

Changes in media technology and format are changing consumers’ expectations of advertising, along with their behavior as consumers. In US studies, 70 % of consumers say they like products that block advertising, especially TiVo and other digital video recorders (DVRs). They report fast-forwarding through 92% of the commercials they receive.

The consolation is that consumers respond positively to relevant advertising: 55% of respondents in a Yankelovich study said they would pay extra to receive more personalized marketing. In a Washington Post survey of working women, 44% (all of whom conduct at least part of their work online) rated the Internet a “very important” medium for pre-purchase research on health-care products. That was more than twice the percentage saying they considered magazines, the next most significant research medium, “very important.” These results paint a bleak picture for companies whose marketing depends on traditional advertising.

Yet most major marketers still allocate only 4-10% of their media budgets to online advertising. Many of them remain fixated on television. 

Consumer behavior has leapt ahead of these marketers. For instance, some automotive manufacturers can now correlate consumer usage of configuration sites - Web pages that allow buyers to experiment with color and trim combinations - with subsequent orders. This allows the manufacturers to plan shipments more accurately and reduce holding costs of inventory. But online spending is only a tiny proportion of many auto advertisers’ budgets.

An analysis of the automotive manufacturing industry shows the mis-allocation of marketing resources. Companies were persisting with traditional media while consumers were influenced most by other media. Research in 2003 showed:

Media Impact on consumer’s
purchase decision %
% of car company
ad budgets
Internet 22 1
Radio 4 2
Newspaper 30 12
Magazine 17 35
Television 27 50
Total 100 100


Source: CNW Research, TNS Media Intelligence/CMR

Astute television executives recognize opportunities in the new media. Comcast, the largest US cable television company, says 65% of its customers with access to video-on-demand use it, with new users accessing it on average 23 times a month. Researchers estimate that the market for advertising connected to video games will grow from $30 million in 2004 to $750 million in 2008. Some video game companies are experimenting with interactive ads contained within video games. Consumers report that they like the authenticity that real-world advertising brings to a fictional game environment.

Opportunities are also arising outside the television sector. Apple has sold more than 8 million video downloads since it began offering them in October 2005.

Rather than passively absorbing traditional media content such as television shows, consumers have started creating their own media environments. As the cost of creating creative content becomes negligible, consumers are putting together their own podcasts, playlists, online periodicals, and even original music recordings and films. A total of 8 million Americans maintain their own blogs, an astonishing number. The social networking Web site MySpace, on which men, women, and children post about themselves and their interests, has more than 50 million registered users and was adding 4 million new members a month at the end of 2005.

The shopping site eBay, entirely consisting of consumer-created content, has 79 million registered users. eBay’s automotive section alone attracts 10 million unique visitors per month, with each visitor spending an average of 45 minutes on the site. And YouTube, a site launched in February 2005 for member-uploaded video clips, already streams more video than either Google or Yahoo; it is becoming the premier video site for those in younger demographics.

Instead of marketers talking vaguely of CPM and other input measures, they can now ask questions about outcomes such as, “How many toll-free calls or online registrations did that ad generate, and how many were converted into sales?”

Much as in the early days of television, when Procter & Gamble produced its own soap operas to showcase its products, marketers today are appealing to consumers directly by creating their own programs. Blue-chip brand marketers such as Coca-Cola and Mercedes-Benz are already major players in the digital music arena with www.mycokemusic.com and www.mercedes-benz.com/mixedtape.

Other big name marketers are thriving in the post advertising environment. Coca-Cola, Nike, Anheuser-Busch, McDonald’s, and AT&T have developed games and other ways to engage consumers on mobile devices.

Nearly 70% of all US companies have reorganized their marketing departments during the past five years, according to research by the ANA and Booz Allen Hamilton. One major cause for the changes has been their need for new expertise in digital technology, relationship marketing, and media innovation to supplement their traditional brand management apparatus.

Underlying all these new practices is one fundamental skill: the ability to deal with unprecedented complexity and make choices accordingly. Each major marketer must learn to develop its own approach to reaching dozens, if not hundreds, of differentiated audiences.

Major opportunities for growth and market leadership are being created. At no other time has the potential been so great for smart players, whatever their size, to invent new rules for the game. At no other time have marketers and media companies possessed so many compelling ways to entertain and engage the consumer. At no other time has marketing been so measurable, accountable, and interactive. Together, these factors are sure to ignite a new era of creativity and innovation in marketing, as well as in media and entertainment. The strategies pursued now by senior management at media and consumer goods companies will play a defining role in who wins and who loses relevance with today’s generation of consumers.

- via www.strategy-business.com.

 

About the Author

Kim Harrison is a recognized authority in the public relations field. His website, www.cuttingedgepr.com, provides a wealth of informative articles and resources on public relations techniques and management.

 

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