Today’s economic downturn is affecting not just banking, housing and automotive, but all industries. As businesses adjust to weather this severe economic storm through reduced spending and layoffs, expensive advertising budgets are among the first to get slashed and the media industry is being hit hard.  Print advertising at newspapers was down 16 percent in Q2 and it is steadily contracting.  While more ad dollars are still being spent online versus print, Q3 experienced for the first time a slight decline in online ad spending.  Print media in particular is being impacted; Time Inc. is undergoing significant layoffs across its multiple titles such as People, Fortune, and Sports Illustrated.  Condé Nast was recently forced to let go of staff from its newly launched Portfolio, and Forbes underwent a restructuring to combine its web and print operations. 

Given the climate, print media has had to make tough decisions.  With the bleak outlook, some are testing out new approaches and introducing innovative changes.  The Christian Science Monitor and more recently PC Magazine, the bellwether of tech journalism, announced plans to start publishing in a 100% online-only format.  There is a small silver lining for online ad revenues; the Interactive Advertising Bureau (IAB) in conjunction with PricewaterhouseCoopers recently reported that internet advertising rose slightly in the third quarter, up 2% from the second quarter, an 11% rise from the same period last year.  Yankee Group predicts that the online ad market will reach more than $50 billion by 2011.

Traditional publications are also realizing the benefits of delivering content online to supplement print issues.  The New York Times’s Pogue O’Matic and Time’s Channel Podcasts are great examples that continue to operate and produce print issues but have started to post supplementary angles to their print stories in their online outlets.  The online sections are giving journalists additional space, where they can write a follow-on piece, include new perspectives, mention other players in the space, incorporate product information, post a video interview, etc.

With more ad dollars moving to the web, news outlets still have to carefully balance the mix of interactive features within their news content so that readers’ overall experience is kept in check.  Incorporating various interactive, multimedia formats and social media tools (podcasts, video chats, streaming video, photo slides) enables media outlets to engage readers and push their content out to a broader audience of readers.  Increasingly, online news sites are catering to a growing number of readers who want to share, vote, comment on or blog about the article; thus new social media buttons increasingly accompany the articles to support readers’ needs. As print publications expand their news coverage online and include new ways of engaging readers, high tech PR agencies will be afforded extended opportunities to collaborate with their clients on how they too need to leverage these expanding channels of communication, information sharing and reader engagement. 

For any startup looking to gain a strong foothold in the market, customer traction is the name of the game.  All too often though, many Web 2.0 startups focus instead on pushing a product or service to market that they built without involving beta customers beforehand.

Innovative ideas need to incorporate early user feedback and testing and that shouldn’t mean just before the product or service is “baked.” Working with beta customers should start at the onset in order to really understand what customers’ needs are and reiterating the product or service to win their nod of approval. Since early stage, tech startups have such limited resources, the startups early version of their product/service should focus on solving the most critical customer pain points: the product/service has to be “a must have” and not — “a nice to have.”  This can be best achieved by focusing on beta customers — early and often.  Happy customers will become referenceable customers and your biggest champions.  In their words, they can best articulate why the product/service solved their problems and why it was of value.  Other prospective customers will self-select by identifiying with the same problem/pain points and move to seek out the solution.

Being on the PR side of things, we still see far too many Web 2.0 companies, as well as established companies, not involving their customers soon enough or often enough before they roll out some “beta” offering (or even worse launch a new product).  From the PR side, the best advice we can offer is not to push out new whiz bang features early and often but instead to work closely with customers, early and often, in order to build that better mousetrap.

I attended the Girls in Tech / Horn Group event that examined the notion of whether social media tools are killing PR.  The event was in part to address the ongoing backchannel blogger chatter, which is essentially asserting that PR is dying on the vine.  Kudos to the Horn Group and Girls in Tech for taking the opportunity to move beyond the negative bickering and look forward to the role that social media tools are having and how PR must harness them.  I agree with the stand that Sabrina Horn took in noting that, no, PR is far from dying and the industry is, in fact, on the cusp of being reborn. In other words, there is opportunity on the horizon for those agencies that choose to transform for the future.  The panelists were fantastic, each bringing a different and highly relevant perspective: Sam Whitmore of Media Survey served as the moderator and did an excellent job of prodding the audience for feedback while trying to cover a number of areas and keep all participants on track.  Susan Etlinger, from the agency-side, Jeremiah Owyang, provided the analyst and blogger perspective, and BoomTown’s Kara Swisher lent perspective from her traditional media experience.  Unfortunately, the 90 minutes didn’t afford the time to really dig down into how different social tools are enhancing PR or could be integrated more successfully.  Nevertheless, the exchange was positive and fruitful, providing some good take-aways.  Kara Swisher was vastly entertaining and provided a dose of reality related to the drama and antics some bloggers are exhibiting.

A few folks from the crowd provided a client perspective, noting that they want their agencies to be more expert at product marketing and SEO and web analytics.  Jeremiah was spot on in his assessment that today the PR industry has to build out core competencies in SEO, web analytics, product marketing, viral marketing and beyond in order to be able to offer a new brand of PR services and expertise to clients; This new brand of PR is one that will blend core practices of traditional PR with online marketing — while harnessing existing and future tools that disseminate information faster and farther. There are indeed new revenue streams to be realized here for PR firms.  PR is at a crossroads in its need to evolve and become savvy in online advertising and other marketing competencies so that we can help clients navigate how they can most effectively apply their marketing efforts and dollars to drive company revenues. 

Like the auto industry’s need to retool their manufacturing plants, now is the time for the PR industry to also retool.  Future core services that we begin to offer clients need to be creative and closely align with how to leverage the expanding communication channels and the different avenues in which content and services and conversations are being disseminated, shared, and consumed.

Wow, we had the opportunity to attend last week’s California Clean Tech Open Annual Competition. It was a fantastic event that was flawlessly produced by a group of dedicated volunteers who have a passion for clean tech and entrepreneurship. Next year, we hope to get involved with such an exciting group and sector. The event showcased a broad range of the most promising clean tech startups. The level of innovation taking place was amazing and holds so much promise for “what’s around the corner” in terms of job creation and better, more efficient ways to improve resource availability, transportation, renewables, power delivery, eco-friendly building and energy consumption. Each of the clean tech startups were winners in their own right.

One of our favorites in the Air, Water & Waste category was, hands down, a startup called, Over the Moon Diapers. Any parent knows and often struggles with the decision of whether to use cloth diapers or disposables. Cloth diapers raise concerns regarding air and water pollution required to clean and reuse the diaper. On the other hand, there is the matter of the disposable diaper that takes 500 years to decompose; each year, 450 billion diapers are tossed in landfills (yes, that 450 billion with a “b”). These staggering numbers indeed paint a real problem, so we applaud any company that can improve this smelly situation! Bottlestone was another clean tech startup winner that makes ceramic stone material made out of 80% recycled waste glass. With an improved ability to reduce heating and cooling costs— while maintaining all of the aesthetically pleasing aspects of natural stone, quartz and granite, Bottlestone is bringing a highly appealing product to market. In the renewables category, Renewable Fuel Technologies caught our eye. Have you ever gotten excited about straw? Well what this company does with straw is amazing. There is currently more than 200 million tons of straw and other crop waste being produced. Renewable Fuel Technologies is harnessing this by-product for its energy value and converting it into BioCoal^™. This is a win-win for farmers all across America that have literally tons of straw and other crop waste that they ordinarily would PAY others to come haul away. Even better, innovative startups like Renewable Fuel Technologies can begin to replace the environmentally scarring effects caused by the traditional processes used by the aging coal industry. Converting 200 million tons of agri-waste into BioCoal, could replace 150 million tons of fossil coal and, more importantly, reduce CO2 emissions by over 500 million tons each year. BioCoal is a new, much more promising clean tech alternative that cement kilns, power plants and other users of fossil coal can adopt, without any capital cost, while reducing their CO2 emissions footprint. There’s another win-win!

We worked with San Francisco-based Syncplicity recently on their funding announcement.  The timing for the startup was fortuitous because they managed to get their post-seed funding just before the market conditions and environment for tech startups became much more challenging.  Syncplicity and their VC firm, True Ventures, have been sharing their perspective related to the funding environment and tech start-ups.  Here are a few postings that we wanted to highlight that touch up some of the notable points of Syncplicity’s funding.

http://profy.com/2008/10/31/simplicity-still-viable-investment-syncplicity-gets-2-35-million/

http://www.thealarmclock.com/mt/archives/2008/10/cloud_computing.html

VentureWire’s Scott Denne’s piece captured that Synplicity found one of the biggest challenges in closing the round was that most venture capital firms wanted to put in more money than the company was willing to take. Since Syncplicity runs largely on hosted infrastructure, like many Web 2.0 start-ups, its capital needs were out of sync with the amounts that larger venture firms look to put to work over the life of a company.

VentureBeat’s Matt Marshall just did a post related to the current VC model and startup environment that elicited insightful, provocative comments from readers as well.
http://venturebeat.com/2008/11/12/the-vc-model-is-broken/

What an incredible opportunity we had to witness and participate in such an historical election.  Aside from voting (which I hope everyone reading this did), this presidential race, particularly the Obama campaign, afforded the public a plethora of online communication vehicles to garner support for their candidate, raise funds and get out the vote (GOTV).  From candidates’ websites to SMS, to YouTube, to Twitter, to Facebook, to Google Maps – access to information was plentiful.  For a generation that is connected to the Internet almost 24/7, there was no shortage of being able to find SNL videos, commercials posted online, speeches, polling locations, song parodies mocking candidates, etc.  It’s no surprise to discover that an estimated more than 50% of young voters turned out yesterday. 

Just as easy as it was to gather the information, so was it to share.   The candidates turned to social networks early on as part of their campaigning efforts, and it certainly paid off with election fever spreading virally across Facebook and MySpace.  In my Facebook network, friends, family members and colleagues made it easy to guess who they were voting for based on the candidate-specific videos they posted (or created), status updates they donated, and rally pins and buttons they gifted.  Brilliantly, Ben & Jerry’s capitalized on this one-to-many approach and become Facebook’s sole Election sponsor.  

Obama melded his grassroots efforts with social media tools to solidify his historic presidential win. In the process, he & his staff wrote a new page in how to use the internet to run campaigns and GOTV.  He announced his VP selection and also brought to a close his momentous win by thanking his supporters prior to his victory speech — all via text messages. The Internet has ushered in a new era of voters that are using social media to be more outspoken and mobilize others to GOTV.  Check out BusinessWeek’s list of social media sites that helped Americans chronicle this historical election – in real-time.  http://tinyurl.com/57vxpv  (“The Vote: A Victory for Social Media too”).  ReadWriteWeb’s blog also has a nice posting titled, “Obama’s Social Media Advantage.” http://tinyurl.com/create.php