Under Strict Embargo

How many different PR outfits should you hire in crisis? Well the answer seems to be three if you are Phorm, which according to PR Week has taken on Freuds, Citigate Dewe Rogerson and crisis guru John Stonborough to rescue its business.

For those of you who have missed the wave of negative coverage, Phorm is essentially an ad-serving company which has signed deals with leading ISPs including BT, Virgin and Talk Talk which allows it to track the browsing behaviour of customers and display better targeted ads - with the ISPs collecting a share of the ad revenues.

The current national media storm was triggered by claims from Cambridge academics at the Foundation for Information Policy Research (FIPR), that Phorm’s activities are ‘illegal’, as gathering information about site visits without a user’s consent could be considered to be in contravention of the Regulation of Investigatory Powers Act, which prevents unlawful interception of communication. The FIPR has called on the Information Commissioner to investigate and his report on the service is due in the next few weeks. Phorm’s immediate fate rests on his verdict.

Hindsight in PR as in everything else is a wonderful thing. Given the scale of the controversy surrounding Facebook’s introduction of its Beacon platform last year, it was however entirely predictable that similar concerns about Phorm would be vigorously voiced by consumers and privacy groups in the UK. Good crisis comms is as much about prevention as effective cure - having the Information Commissioner on side before going public seems like such a no brainer. It would have given the service legal credibility and helped reassure the ISPs, publishers and advertisers on which the service depends.

Ultimately though Phorm’s fate rests with the ordinary consumer, the internet users clicking those banner ads. Taking the national ID card debate as an example, I doubt there is any amount of official reassurance from government and regulators which could overturn the deep scepticism of the British public towards having their online behaviour tracked in such an all pervasive way. The near 8,000 strong Downing St petition calling on Phorm to be shut down and the growing volume of customer complaints directed to the ISPs supporting the service could just be the start.

Let’s see what Freuds, Citigate and Stonborough can do…

2007 has been an amazing year personally. Leaving the warm bosom of agency life was a difficult decision but I’ve since been lucky enough to work with some amazing clients, agencies and practitioners on some really ground breaking digital PR campaigns. It’s been a journey into the future of PR and the future looks very bright indeed. So what do I think 2008 will bring?

1. The Year of the Widget
I have been spending a lot of time over the past couple of months working with some great developers on the design of widgets. I’m not talking about Zombies here, but creative, engaging, viral and above all value-added applications which support wider PR campaigns. The integration of widgets into the armoury of digital PR tactics will really take off in 2008 as developments like OpenSocial improve the economics and allow single applications to access larger audiences across multiple social networking sites. Beyond their role in PR, the widget will continue to change the shape of online advertising, as they move onto the desktop and mobiles – this recent article in Adweek is well worth a read to get up to speed.

2. Do you Vlog?
Video blogging will be one of the biggest tech trends of 2008. This will be driven by high profile bloggers such as Iain Dale experimenting with the medium as well as new platforms like Seesmic and Magnify. Another driver will be next generation mobile handsets with better quality in-built video cameras combined with falling data costs enabling vlogging on the move. It could even capture the media zeitgeist from Facebook, speaking of which…

3. Facebook media backlash
A bit like Jade Goody, having devoted acres of coverage building it up, 2008 will see the media try to bring Facebook down. The Beacon disaster has seen the US press sharpening its knives and the shift in sentiment will no doubt cross the Atlantic. Despite the less favourable coverage, Facebook will continue to grow and members will spend more and more time on the site. Reports of Facebook’s imminent demise by a few over excited commentators are I feel greatly exaggerated. The positives that make the site so great still far out weigh the disadvantages. The Beacon saga has shown Mark Zuckerberg that he stops listening to users concerns at his peril – I don’t think he will be stupid enough to make the same mistakes twice. Removing the negatives in terms of poor data protection and privacy, overly intrusive commercialisation and the small but growing volume of application related spam will need to be his top priorities for 2008.

4. Jumping on the social media bandwagon
Johnny come lately PR agencies will continue to jump on the social media bandwagon. Expect PR Week to be full of more stories of traditional PR agencies appointing heads of social media and creating specialist divisions.

5. A high-profile PR account shifts to a digital agency
The fundamental shifts in the PR industry will come into sharp focus when a high-profile client shifts its PR account to a Spannerworks-esque agency with digital and search at its core. There will be much debate and navel gazing. A few weeks later agencies respond by – yes you’ve guessed it – doing more of number 4.

I pity the guys over at Computer Weekly. Following yesterday’s security breach by HMRC, they are no doubt being inundated with tenuous news-hijacking pitches from companies however vaguely connected to IT security and consumer data. Sympathies also to the PR folk whose advice not to bother has been ignored. Sometimes a rapid response online ad with a great image can cut through the noise – congrats to the guys at online back-up firm Total Recall for this effort.

Martin Sorrell’s WPP Group disappointed the City on Friday with 3rd quarter growth of just 5%, but PR was one of the strongest performing divisions with an 11% increase in revenues to £157m. WPP’s vast portfolio of agencies includes the likes of H&K, Bell Pottinger, BM and Cohn & Wolfe. The Guardian reports that Sorrell is attributing the high growth to social networking. Not PR 2.0 as such, but rather that the attention being paid to social media has apparently highlighted to clients the power of independent editorial, which in turn has boosted PR spend overall.

Sorrell claims that,“Social networking is really recommendation between people about the things that they are interested in and they like… this has stimulated people’s attention in terms of the importance of PR. The people who are going on these sites didn’t want to be monetised, they didn’t want to be advertised to, so again editorial communication is so powerful, they would rather be communities that can exchange views that are untarnished.”

It’s an interesting analysis, but while being in agreement, I think the social networking story is just a small piece in the far wider and more fundamental battle raging between PR and advertising spend. I do love the bit about ‘untarnished’ editorial though, perhaps he was being deliberately ironic?

Given the massive growth in online advertising, the policy by a few remaining papers to charge a subscription to access online content has become a growing anomaly. The news today that FT.com will be allowing users free access to any 30 stories on its website per month, all but sounds the death knell for the subscription model.

In many ways the FT has been bounced into this decision following the news last week that the New York Times would be making its site free. In addition there have also been well publicised hints from Rupert Murdoch that he is considering ending online subscription charges for the FT’s arch rival the Wall Street Journal. It’s clear the FT didn’t want to be the last mainstream paper still charging readers through the nose.

With a surprising 100,000 subscribers paying £99 a year, the likely erosion of almost £10m in revenues will not be pain-free for the FT, especially considering its tiny £11m profit in 2006. The gamble is that relaxing the restrictions to access will lead to a significant enough boost in visitors to power a stronger ad-funded and search-funded revenue model. FT.com claims that in the last year monthly unique users have already grown by more than 70 per cent to 6.5 million, so the signs are positive.

The official spin on the announcement is that the ‘30 stories limit’ represents an innovative ‘third way’ model between free and paid access. The obvious reality is that this is a stop-gap measure on the welcome road to completely free access. What is also encouraging is the recognition that an open access model will increase the number of blogs linking to FT.com stories and will thus help drive those all important visitors from the blogosphere – a key battleground as the FT prepares for war with a more aggressive WSJ.

With continuing speculation about a possible snap October election, the Conservative Party has today launched the UK’s first online only political advertising campaign. Promoting the new Tory slogan, ‘It’s time for change’ the banner adverts will be running on Facebook as well as major newspaper websites in the run up to the party conference in October. They are part of a continuing initiative alongside Webcameron to reach out to younger voters and professionals. It will be interesting to see how well the party takes advantage of click-throughs once the adverts go live…

Following last week’s advertising crisis, Facebook has been forced to introduce a new opt-out system for advertisers. The new feature will allow advertisers to block their ads appearing on the pages of some of the 6 million user groups on the site. It appears the UK advertising industry is leading the way in the evolution of the brand/social media relationship with advertisers in the US having to wait until later in the year to be able to exercise the same choice. The opt-out system is apparently the first of a number of new initiatives in development to give advertisers the control they are demanding. It will be interesting to see whether Facebook’s competitors introduce similar reforms in the coming weeks.

Well, the impact of this week’s Panorama seems to be gathering pace with Vodafone, Virgin Media, and First Direct (so far today) announcing that they are suspending all advertising on Facebook after skyscrapers appeared on a page promoting the far-right British National Party. The growing crisis of confidence has resulted in advertising industry bodies the IPA, ISBA, IASH and the IAB rushing out new guidelines this morning for agencies using online advertising networks. The key recommendations include:

1. Advertising agencies that purchase media space through intermediary online networks should require, in their contracts, specific warranties and obligations that the company’s advertisements will not be associated with any objectionable content.

2. When these are breached by mistake or human error, every effort should be made to withdraw the advertising immediately and no fee should be paid to the media owner.

3. Additional measures can also be considered by an agency:
- Reconsideration of trading relationship with network
- Legal action against the network

Other brands seem to have taken the decision that the benefits of advertising on social networks at the moment out weight the disadvantages. According to New Media Age, eBay are refusing to retract their advertising with an Orange spokesperson claiming that they will be working with Facebook to resolve any issues,“There are so many other benefits to advertising on social network sites. We closely monitor customer feedback and if they are offended, we will take that into account”.

Call me naive but something tells me that Orange is likely to be facing a number of calls today from offended customers and that anti-BNP political groups are likely to put a lot of PR pressure on those brands who have so far taken no action. In terms of the new guidelines the question is not if they are too little too late but whether like some previous pronouncements they will simply be ignored by the social networks themselves. Interesting times.

Update 5.09pm: The AA, Halifax and Prudential have also pulled their advertising…

Will last night’s Panorama eventually lead to a fundamental rethink about the censoring of content on UGC sites? I think the answer is yes. For those who missed it Panorama’s Children’s Fight Club examined the growing phenomena of violent bullying being filmed and posted on sites like YouTube. Listening to the emotionally charged personal testimony of the young victims and seeing footage from just some of the hundreds of videos currently online, it quickly became apparent that for those on the receiving end of these vicious beatings, the term ‘happy slapping’ couldn’t be further from the truth.

Having made a powerful case the show then approached the owners of the video sharing sites to ask them whether they are happy hosting this type of material. In the case of YouTube it was left to Google’s formidable Rachel Whetstone to mount a defence. Having personally worked for a number of ISPs her response that it’s not the responsibility of internet companies to decide what material is or is not acceptable was to me a familiar one. For the viewers, especially the concerned parents watching, I suspect this line of argument however logical came across as both complacent and cold-hearted. YouTube’s preferred method of community censorship was then shown to be ineffective when only a couple of the videos flagged as inappropriate by the show were actually removed.

Panorama is promising to keep this story under review and the police are also looking to introduce laws to make the filming and uploading of violent attacks an offence. The show’s masterstroke was however to identify and exploit the Achilles heel of social networking sites – online advertising. It’s the UGC which attracts the eyeballs and subsequently the advertisers but it is the lack of control over content, or rather the lack of control over which piece of content your banner ad will appear next to which represents the risk to brands. The Interactive Advertising Bureau featured on the show and announced they will be conducting a review and offering advice to members.

Having been approached by Panorama, BT, John Lewis and Orange have launched reviews over how their online advertising appeared on a site called Pure Street Fights. Both Carphone Warehouse and O2 have already sacked the advertising networks responsible for their ads appearing on the site. The media buyers and networks for the other brands highlighted by the show have no doubt been having a rather stressful day.

I think in the end it won’t be a moral re-think or the reams of negative PR coverage which will force the likes of YouTube to review their content procedures. The pressure from brands and the threat to advertising revenues will in the long term just prove too serious to ignore.