Wolf Tracking

Season’s greetings from the Corporate & Technology practices at Cohn & Wolfe and welcome to Wolf Tracking, where we follow the ever-evolving media landscape.

2006 has been a very eventful and exciting year. We’ve seen dramatic shifts in the corporate, telecom, media and tech arenas, all of which continue to drive a changing marketplace. While the media play an ever important role in shaping society’s opinions and actions, new technologies and evolving consumer preferences are creating new opportunities as we head into the New Year.

On the technology and media front, we saw, as research group Stifel Nicolaus reported, increased disruption of the telecom and media sectors due to greater broadband penetration and a new and exciting set of voice and video applications.

Network TV had its lowest weekly ratings ever in July. CBS, ABC, NBC and Fox averaged 20.8 million viewers during the average prime-time minute the week of July 4th, according to Nielsen Media Research. That sunk below the previous record of 21.5 million, set during the last week of July in 2005. The music radio listening audience continued its multi-decade decline, dropping 8.5% this year alone, and newspaper circulation, which peaked in 1987, is declining faster than ever and is down another 2.6% so far this year.

YouTube announced in July that viewers are now watching more than 100 million videos daily on its site creating an enticing lure that resulted in Google’s $1.65B acquisition. eBay’s Skype service has 136 million users and grew by 122% in North America in 2006.

This market disruption fueled additional consolidation among telecom and media behemoths. AT&T merged with BellSouth. Time Warner and Comcast absorbed Adelphia’s assets and as recently as December 5, Time Warner confirmed that the company is actively exploring new Internet content and ad technology deals. Not to be left out of the party, major newspaper consortiums entered into agreements with Google and Yahoo! looking for ways to remain relevant to today’s consumers.

Business was far from usual for corporate America in 2006. Changes in communications, product demand, partner liability and ethics grew exponentially faster. In the beginning of the year, most corporations did not have the words “pretexting” and “option backdating” written into their crisis plans. As a result, well-recognized global brands publicly struggled to adapt to the power of the social media landscape.

Now, anyone can self-publish their own stories, anecdotes, and recommendations online in the form of blogs, videos, and forums. This is the emergence of social media and it’s spawning a new set of influencers. In fact, Time magazine’s 2006 Person of the Year is “You” – meaning “You,” the self-publisher, are responsible for the explosion of content on the Internet. Now people have more information on topics that interest them. This shift in power has produced a fragmented network of influence for both corporations and traditional media outlets as consumers and professionals turn to the Internet as the primary source of information intake and output.

Dell realized the power of social media when its faulty laptop batteries became an unwieldy crisis this summer. In November 2005, Dell knew about the faulty batteries but believed that the problem was limited. By spring 2006, an army of bloggers pointed to Dell’s battery situation but the company failed to address the issue in time. In June 2006, a video surfaced online showing a Dell laptop exploding into flames. It quickly became the number one topic in the blogosphere and resulted in reporters jumping on the story leading to thousands of negative media reports. Shortly there after, Dell begins the largest battery recall in history – 4.1M – which was estimated to cost $200M-$400M.

At Cohn & Wolfe, we help leading brands navigate this ultra-competitive environment to build lasting and meaningful connections with their core audiences. This has been a banner year for our team marking a renewed spirit and enhanced credibility evidenced through industry leading campaigns. We have been working tirelessly to grow the practice while delivering outstanding client service and this success is a testament to our talented group of professionals that has grown significantly this year. We have pioneered new ways to leverage social media to form relationships with consumers and stakeholders. In addition, working with The Venice Project, the latest venture from serial entrepreneurs Niklas Zennstrom and Janus Friis – aka, the guys behind Skype, has put us at the forefront of the evolving video entertainment market.

We hope that your 2006 was as exciting and successful. 2007 holds a great deal of promise with all indications that we are in the midst of a “Goldilocks” economy; not too hot, not too cold.

We encourage you to explore ways that your business can monitor and leverage social media tools and platforms. If you are a public company here are some rules to consider:

Monitor Information Disclosure
- Set up a policy on blogging immediately and align it with compliance laws/corporate rules
- Search the depth and breadth of the blogosphere to uncover nuggets of information not found among key online influencers

Be Transparent in Online Communications
- As Wal-Mart has shown us, it never pays to produce fake blogs to promote a corporate brand
- Avoid marketing speak and communicate in a conversational matter
Consider Outsourcing the Blog Function
- The Blogosphere is changing every minute and its nuances and protocols are continually redefined
- Companies have started to outsource blogging/social media functions to PR experts who can optimize online content and navigate the blog universe
- New technology solutions, such as Cohn & Wolfe’s TruCast system, are helping companies monitor, analyze and act upon information that appears in blogs. Please let us know if we can answer any questions or help you navigate the evolving media and influencer landscape. We wish you the best during the Holiday Season and look forward to an even more fulfilling year in 2007.Happy Holidays!