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The Financial Impact of Blogs

I've been a little behind on catching up on all my favorite blogs lately - so, forgive the repetition if this is old news, but I've seen a number of hits on my traffic reports this week from Google Finance. Seems that the BETA engine thinks blogs are an important driver of corporate reputation - the same page that includes topline financials and management bios also includes a snapshot of the latest blog coverage of the brand.

Edelman's Blogging Blunder or Bloggers Edelman Blunder?

Hmm, what does it mean when your boss sends you (a known blogger) an article that includes the phrase "most of us know bloggers need to be watched"?

Not much of a conspiracy it turns out - just another great story about what happens when BDAs (big dumb agencies) and even bigger clients (Wal-Mart in this case) rush into word-of-mouse media with all the customization and audience awareness of a big clunky direct mail campaign.

This time - Edelman PR gurus appealed to blogger egos with an offer of exclusive access to PR-generated "news stories" about Wal-Mart.

Interestingly, the Motley Fool criticizes bloggers for the ethical lapse of just repeating the company line verbatim and - in doing so - dinging their own credibility. And, the New York Times questions why bloggers didn't cite the source in their praise of Wal-Mart.

These PR tactics may make the hiring companyies look sneaky and under-handed, but the media is holding bloggers accountable, too. Turns out playing online in your jammies requires social responsibility.

In other blogging faux pas news - Bob Lutz of GM is being criticized on the Web for calling for customer feedback and then not responding to it.

No question - it's hard to do everything right in this new customer-focused conversation marketing.

Question: We've seen a number of these heavy handed blog strategies go bad lately. Do agencies who blog (like the fabulous Hill & Knowlton writers) have a better pulse on bloggers than agencies who just stick to their clunky Flash Web sites?

What do you think?

As goes P&G, so goes PR?

Despite their hefty $4 billion advertising budget and history of marketing innovation, Procter & Gamble has gone back to the basics - measuring the marketing tool kit of tactics against ROI.

The surprising leader? Public relations. P&G's campaign review concluded that the return was often better from a PR campaign than from traditional forms of advertising

As P&G starts to look at upping their PR budget, they'll be joining a nationwide trend - in fact, PR spending is projected to be growing at 9% per year, faster than advertising and marketing overall (growing at 6.7% a year).

Cites and more.

Who do we trust now?

The latest Edelman Trust Barometer ranked “someone like me” as the most credible source of information about commercial organizations.  "Someone like me" has risen to surpass doctors and academic experts for the first time. In the USA alone, trust in "a person like me" increased from 20% in 2003 to 68% in 2006.

[You won’t be surprised to know that I’m wondering if the democratization of media – including blogs – in fueling this trend.]

Respondents also consider rank-and-file employees more credible corporate spokespersons than CEOs (42% in 2006, compared to 28% in 2003).

Other key findings:

• Microsoft Corporation is the most trusted global company, followed by iconic companies in their home markets, including Toyota in Japan, Haier in China, Samsung in South Korea, and Petrobras in Brazil.

• Opinion leaders in Europe apply a significant "trust discount" for major US brands, such as:

• Coca-Cola (US = 65% vs. Europe = 41%);
• McDonalds (51% vs. 30%);
• P&G (70% vs. 44%);
• UPS (84% vs. 53%).

• Companies in the technology and retail sectors are the most trusted, while energy and media-entertainment are the least-trusted industries. Pharmaceutical concerns face considerable skepticism in the US and Germany, while financial firms fare much better in the US and Asia than in Europe.      

• Television is the big loser in media trustworthiness. When asked where they turn first for trustworthy information, 29% of respondents in the US still cite TV first, down from 39% three years ago. The internet is now cited by 19%, up from 10% in 2003. The same trend is evident in the UK, where television has declined from 42% to 33% as respondents' first choice, while the internet has risen from 5% to 15%.      

• Newspapers show rankings essentially unchanged in most markets, at approximately 20% across the board.

• Articles in business magazines are the most credible source of information about a company (US = 66%, Canada = 53%, Brazil = 75%, and Europe = 60%), followed closely by friends and family, which has grown very strongly in the US (2003 was 35% vs. 2006 at 58%), and in Brazil (2004 was 66% vs. 2006 at 73%), and in Canada (2005 was 43% vs. 2006 at 58%).      

• Trust has important bottom-line consequences. In most markets, more than 80% say they would refuse to buy goods or services from a company they do not trust, and more than 70% will "criticize them to people they know", with one-third sharing their opinions and experiences of a distrusted company on the web.