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…

6. PCTV wins the battle with IPTV
Early next year we are likely to see both 02 and Orange join the battle with BT Vision and others to displace the Sky, Virgin and Freeview set-top boxes in our living rooms. As they spend big to each attract at most a few hundred thousand subscribers, millions of consumers will instead top up their TV viewing online. The implications of the Kangaroo initiative, which will bring together the on-demand services from the BBC, ITV and Channel 4 shouldn’t be underestimated. Kangaroo has the potential to bring PCTV into the mainstream via a single application and EPG. But it will need to quickly become compatible with all those Vista enabled PCs people will have got for Christmas.

In fact one of 2007’s most exciting moves for both online broadcasting and social networking, was Bebo’s landmark deal with the likes of the BBC, Sky, Channel 4 and Endemol to allow users to embed TV programmes in their profiles. A fundamental shift in taking TV to specific communities rather than trying to attract specific communities to TV. The implications of the deal for much hyped but little used services like Joost should be keeping their investors awake at night.

Finally, as millions stream TV content to their desktops, the spotlight will again turn to the performance levels of broadband providers. Download limits and throttling connections will be exposed as the disingenuous excuses for poor service they really are. ISPs and telecoms companies will need to think carefully about where they direct their infrastructure investment, or face a very public consumer backlash.

7. DIY Social Networking
Want to create your own social networking site? Of course you do and so will everyone else, well maybe. As I wrote recently vertical social networks are gathering momentum. With so many categories currently un-catered for, it will be a boom year for the software companies providing off-the-shelf solutions. Many firms will also see the benefits of creating their own social networks as a replacement or as an alternative to expensive and cumbersome corporate intranets and extranets. Whether they will give their staff enough time to use them is of course another question.

8. Traditional media decline accelerates
David Crow at The Business has a great analysis on the seismic shifts in the media landscape this year and the likely developments in 2008. To reverse the general declines in newspaper circulations, more national newspapers will need to follow the example of the Daily Telegraph and invest in their digital operations. The amalgamation of the BBC’s offline and online news operations could lead to a decline in both the quantity and quality of online content, allowing other news organisations to catch-up. The Wall Street Journal liberated from a hefty subscription by Rupert Murdoch, will also be a new force to be reckoned with. Crow also looks ahead to the growth of DAB radio with Channel 4 launching a number of stations to compete directly with the BBC. He concludes by saying, “The firms that succeed in 2008 will be those that focus on the needs, desires and interests of their consumer in the contemporary marketplace – and discard their archaic, elitist prejudices born of a different era. For those still referred to as the “traditional” media, 2008 will be the make or break year.” Couldn’t agree with him more!

9. The Press Release’s condition becomes terminal
In response to the traditional media going increasingly digital, the demand from journalists for well packaged multimedia content will be stronger than ever before. The SMNR and Social Media Newsroom will become the industry standard for modern communication with press and bloggers. The days of four pages of double-spaced waffle will thankfully be nigh.

10. Google struggles with the forces of darkness
Once one of the most loved of internet brands, ordinary internet users will begin to reassess their warm relationship with Google. As with its recent announcement to obliterate Wikipedia, the brand will behave in a way that challenges Microsoft for its evil empire crown. While doing little to damage revenues at first, the loss of public goodwill will prompt a harder line from the competition authorities and legislators, curtailing the extent of Google’s long-term growth. In 2008, while its takeover of Skype gets through, its hostile bid for Apple is seen as a step too far.

The backlash against price comparison sites in recent weeks is proof if any was needed of their growing power and influence in the online economy. Moneysupermarket.com’s IPO at the end of July was one of the largest for an internet firm this year, valuing the company at a cool £840 million. Its success with 55% of the UK market according to Hitwise has led to a spate of new and well funded competitors who are spending millions on advertising to attract shoppers - Comparethemarket and Gocompare.com to name but two. Established brands are also trying to get a piece of the action with Thomson Local this week launching its own financial product site ThomsonLocalMoney.com.

When your middle aged uncle starts eulogising Kelkoo when you mention you’re looking to by a new TV you know that price comparison sites have become an integral part of the modern shopping experience. Their growing power has prompted the likes of Direct Line to attempt to strike back with campaigns urging people to shun the ‘middlemen’ and buy direct. The question of impartiality is one the sector is going to need to develop an answer to as it comes under further attacks from major brands and greater scrutiny from consumer groups. I suspect few people realise that Confused.com is actually owned by Admiral Insurance for instance.

Research this week from online cash-back site Quidco goes further. It claims that one in three British consumers has stopped using price comparison sites, while 47 per cent said they would not use them again after finding out the results can be biased according to which listed company is paying the most. Figures suggest that the use of price comparison sites is still increasing so whether these results are a case of wishful thinking remains to be seen. If true, they are a timely warning to the new imitators looking to make millions from their own lucrative IPOs in the coming months.