When All Media is Social: Navigating the Future of Communications Speech by Richard Edelman, CEO, Edelman Worldwide 2012

Edelman Academic Summit June 21, 2012 To set the tone I would like you to view a snippet of video. It underscores the power of taking a complex idea and recasting it in a more whimsical, visual and therefore shareable style. The video was produced by George Mason University professor of economics Russ Roberts to highlight the differences between the economic theories of Keynes and Hayek. The video underscores our opportunity - to take complex ideas and make them more understandable. At our Strategy Committee meeting held in San Jose a couple of weeks ago, Adobe CMO Ann Lewnes said: "Public Relations is the number one driver of revenue for Adobe, as articles prompt searches, which lead to visits to our website. PR is the most efficient and best way to immediate awareness." I share this because our remit in PR is larger than ever. We see great distrust in the institutions of government and business. Over the past year, there have been 11 government changes throughout Europe and an abundance of corporate crises including JPMorgan, Walmart, Best Buy, Yahoo! and News Corp. Trust in a person like yourself, according to the 2012 Edelman Trust Barometer, is rising. This group now ranks third behind technical experts and academics. More significantly, they are also three times more trustworthy than CEOs and government officials. This is now a multi-stakeholder world and we see tremendous changes in brand marketing. Nike is an exemplary leader here in the way they are using Nike+ to convene a community around a common bond, running and fitness. This elevates the customer relationship beyond transactions by keeping the customer in their orbit. At the same time, companies must go beyond the license to operate toward the license to lead. This calls for moving from rules-based to principles-based leadership, addressing the key issues of our time and addressing employees as their most important stakeholders. Unilever, with its sustainable living program, is the perfect example of this. Through the program, the company has promised to double its revenue without increasing its resource footprint. With this as the backdrop, let’s hone in on the media landscape. Sixty years ago Dan Edelman, my father and founder of our firm, came up with a simple insight - earned media can significantly build brands. He used this as the basis for the creation of the media tour and used celebrities and experts to travel across the country touting brands such as the Toni Company, Sara Lee, Orville Redenbacher, KFC and countless others. He still believes that PR is cheaper and more effective than advertising and that it drives the conversation. In Dan's time, media was analog, local and national. And the news cycle was daily. Today it's digital and global, far more expansive and it operates in real-time. This is why we conceived the Media Cloverleaf and Transmedia Storytelling - a concept we introduced in 2010.

We believe there are now four distinct types of media: traditional mainstream players, digitally native "hybrids" that blend community and journalism, social networks and corporate/brand-owned media. At the center sit two prominent forces that circulate stories: search and visual content. Change in the media continues to accelerate at breakneck speed. “ABC World News Tonight” this week added a Twitter hashtag that stays on screen throughout the broadcast. It reminds viewers where the conversation can continue. Meanwhile “The New York Times” paywall is proving effective: 500,000 digital subscribers drive 90 percent of the page views. They are all moving toward convening communities – just like Nike with Nike+. What’s more, they are also rapidly expanding their brands to the fourth screen - tablets. This comes as global tablet shipments are expected to reach 106 million units this year – a significant addition to the existing three screens: TVs, computers and smartphones. But there’s much more. There are five key ways that technology is changing how content is produced, distributed, consumed and, ultimately, monetized. 1) New Social Giants Are Emerging While Facebook, Twitter and LinkedIn remain juggernauts, new players such as Pinterest, Instagram and Tumblr are growing rapidly. Tumblr, in fact surpassed 50 million hosted blogs in March, and Instagram was purchased by Facebook for $1 billion less than two years after it launched. What's notable here is that the new players are visually very strong, which is helping them catch on with consumers. This is why just last week we moved eBay's Inside Source site into Tumblr. It's easier to go to the audience where they are, rather than trying to bring them to you. But it's not just new social networks and platforms, however. There are social startups in the news business as well. Buzzfeed is one such example. Buzzfeed started as an aggregator of shareable video content. Today, they are making an aggressive push into social publishing. They employ what CEO Jonah Peretti calls “The Mullet Strategy”: A mix of serious news upfront, and a party in the back. And the media giants are following their lead. 2) Paid Media Now Amplifies Social It's no longer just about display or search. There's now a huge opportunity to use paid advertising to highlight organic social conversations and support PR. Facebook, for example, has a platform called Sponsored Stories that brands can use to turn organic advocacy into promoted messages. Edelman Digital recently used the platform for Ben & Jerry’s new Greek Frozen Yogurt line and ran sponsored stories in “fans’ newsfeeds.” Twitter's two primary ad programs allow marketers to highlight their tweets in their existing and popular structures - such as the list of Trending Topics.

We're going to see more of this in the future, particularly as mobile devices and apps become the primary gateway to social content. Display ads don't work that well on three-by-four inch screens. But paid amplification of organic content does indeed work. 3) Search is Morphing with Social All of the major players have tweaked their algorithms in recent months. Search engines now use social network data as signals to hone in on authoritative content and sources of knowledge. Google results now spotlight brands and personalities that are using Google+. For example, a search for “food” will spotlight people on Google+ who are engaging on the topic – including celebrity chef Jamie Oliver. Bing meanwhile has tied up with Facebook and will point you towards experts in your extended Facebook network who might have deeper expertise in an area you're searching for. 4) Amplification Now Trumps Circulation There are now new pathways to news. Although search remains a prominent means of discovery, Facebook CCO Elliot Schrage recently said the Internet is evolving from information-centric to social-centric. This is also having a major impact on PR. It's no longer about circulation of media but amplification and reverberation. This changes the rules. Not all media however are equally skilled here. Some hybrids like “The Huffington Post” and “Business Insider” are extremely adept at using "listicles," (i.e. “Five Things to Do on the Stanford Campus” or “10 Hotels with Awe Inspiring Architecture”), clever headlines, humor and visual devices that get shared because they help you boost your online identity. You look like an influencer for sharing their content. Traditional media players meanwhile, like “The Washington Post” and “The Guardian,” are investing in creating immersive news experiences inside Facebook - "Social Readers," which have led to record gains in traffic. 5) Visual Storytelling is in Renaissance All of the major networks are making an aggressive push to create "second screen" experiences meant to utilize two screens at once: smartphones or tablets and TVs. The goal is to create a show around the show. Meanwhile, print media is making a big push into video. “The Wall Street Journal” runs a streaming network for tablets that airs live during the business day. Visual storytelling is no longer the domain of broadcasters. One manifestation of this is the slideshow. This simple visual device is helping them get more traffic from social networks.

Three Ways Forward for PR The good news for your students is that there's never been a more exciting time to enter public relations. The industry grew 10 percent last year and our share of the marketing mix is growing: now at around 10 percent. However, there's always more we can do... 1) Show and Tell We have become a profession that is brilliant with the written word, but we must become a profession that knows how to show as equally as well as we tell. Video and photos are not only more snackable, they're emotive and therefore more sharable. You need short-form visual content on lean-forward devices such as computers and smartphones, and longer form content on lean-back devices such as tablets and TVs. There is a huge place for deeper, more informative visuals as well, which infographics – visual representations of information, data or knowledge – provide. Through the use of images, data and charts we have created a number of compelling infographics for clients. Everyone entering the profession today should be adept at understanding how to show not just tell. 2) Be Rational and Emotional In a social networked world, new psychological norms have emerged. We all now have two personas: there's our true identity and our online identity. This means that news we read and news we share are sometimes two different things. Our mandate is to craft stories in two styles: one that is more sharable because it is emotional and another that is more apt for solo consumption because it is informative and rational. This requires that we know our audience - not just their demographics, but also their psychology, the devices they use and how they use them. Storytelling today must be completely situational and dynamic. For example, when GE launched their Innovation Barometer in Davos, Edelman used an array of assets. Some, like the web site, media outreach and an event for opinion leaders at Davos appealed to the rational. Others, like videos CMO Beth Comstock shared with her Facebook subscribers, tended to be a bit more human, emotional and therefore shareable. 3) Dig the Data Finally, PR historically has been a profession that attracts creative types, strategists and writers. This means that many of us are rich with words and poor with math. This puts us at a disadvantage in an era of big data, which is being used everywhere today to make business and society more efficient and effective. However, it's not just the digital marketers and the advertisers who have mastered data. It's the press as well. Quants have invaded the newsroom. “The New York Times,” for example, has a tool called Cascade

that helps them identify the influencers on Twitter who are driving the most traffic to their site as well as the topics that resonate within the community most. But we as PR people must be just as comfortable with data. This includes understanding how to use Google search insights, web analytics and to be fluent in dayparting - a practice that tailors the delivery of content based on time of day. For example, most of us tend to check Facebook in the morning and at noon. So we advise our clients to post at 7 AM and at 11 AM to get the full momentum of the day. We must embrace radical transparency to counter those who think we use this data to manipulate. This is a different level of truth telling, which explains not just the “what,” but the “how” and the “why.” In conclusion, it is the responsibility of the industry and educators to shape the future of our profession. We must together equip the next generation of communicators to be cross-trained in not just classic PR, but social engagement, emotional intelligence, data and - perhaps above all - visual storytelling. With that, I leave you with a bit of professorial advice. It comes from Shakespeare’s “All’s Well That Ends Well.” "Our remedies oft in ourselves do lie, which we ascribe to heaven; The fated sky gives us free scope, only doth backward pull our slow designs when we ourselves are dull…Impossible be strange attempts to those that weigh their pains in sense, and do suppose what hath been cannot be."

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