Social Media's Biz Impact Exaggerated - NYU Prof

A New York University study has found that less than 3% of the traffic going to websites of major brands and advertisers is coming from social media while 33% of the traffic is coming from consumers doing searches for products and services.

"Social media, placed in context, isn't having as large an impact as originally thought on the business world," said Scott Galloway, clinical professor of marketing at the Stern School of Business.

It was once thought that Facebook would be "a huge point of distribution for retailers" but that has not happened, he told Bloomberg editor-at-large Tom Keene Aug. 4 in a 2.34-minute segment titled, "Social Media's Diminished Impact on Business."

Facebook and Twitter serve as "funnels" to direct consumers to websites where they experience banner ads, he said.

He called Facebook "the most nimble of companies with a billion-plus in sales" because it has created products that are accessible to hand-held devices. About 41% of its ad revenues are now from mobile devices, he said.

Companies are still interested in SM because they want to be seen as innovative to their audiences and because they are still trying to "figure out and experiment" with SM, he added.

"But there are telltale signs of a blowback" against SM, he said. The number of job listings in SM has been declining and the pay "is not what people thought it would be."

Business school grads are showing interest in e-commerce rather than SM, he said.

Companies Reach Stakeholders via SM

While the NYU study shows that search engines rather than SM are driving buyers to company websites, that does not mean that SM has little value to organizations.

They are using SM, blast e-mails and their own websites to communicate directly with constituents and customers and are putting less effort into media relations. SM is a way for them to engage, and perhaps mobilize, individual stakeholders.

Some organizations have just about washed their hands of media because they feel the press does not treat them fairly.

One of these is the PR Society of America which has numerous anti-media policies and practices.

Stephanie Cegielski, associate PR director who has assumed the duties of VP-PR Arthur Yann, who died June 13, has told us the Society has not made a decision on whether O’Dwyer reporters will be “credentialed” for the 2013 national conference in Philadelphia Oct. 26-29.

She was responding to a request for such credentials. We also asked whether the Society will allow reporters to cover the 2013 Assembly and whether O’Dwyer reporters will be allowed to enter the exhibit hall. The last two questions were not answered.

All reporters, for the first time in the Society’s history, were barred from the 2011 and 2012 Assemblies.

Yann had posted on a LinkedIn PR News Group in October 2011 that the Society "is a private member organization and our national Leadership Assembly is a private meeting of our members. We’re well within our rights to bar any and all reporters from attending."

Cegielski said the press credentialing form has not yet been prepared and requests cannot be accepted.

She said the policy this year is only to allow a one-day pass to any one member of the press. She told us to check back in coming weeks to see whether the credentialing process has been started.

Submission of the form requesting credentials does not mean they will be granted, she noted.

The Society takes the position that it is doing reporters a favor by allowing them to cover its activities and such access must be rationed out carefully.

There was almost no local coverage at the last national conference in Philadelphia in 2007. The Philadelphia Inquirer printed not a word of the meeting although publisher and Society member Brian Tierney was a featured speaker. He left the paper in 2010 to start Brian Communications. Local businesspeople bought the paper for $55 million in 2012. It had sold for $515M in 2002.

O’Dwyer Reporters Barred in 2011-12

Not only were press credentials denied to O'Dwyer reporters in 2011-12, but this reporter was booted from the Marriott in San Francisco after we talked to a friend in the lobby.

The initial response of Cegielski indicates a continuation of policies and practices carried out by Yann.

He had published a statement on prnewser.com March 14, 2012 that the Society did not have a boycott against any media.

However, when he saw us in the Marriott on Saturday morning, Oct. 13, 2012, he immediately called a hotel security guard and gave her orders to escort me beyond the area rented by the Society. Guards then told me I could not talk to anyone nor pass out any written materials, even business cards. When someone talked to me in the hotel lobby, I was ordered to leave the hotel. A guard walked me out shoulder-to-shoulder to the door with orders to stand across the street.

The Society’s specs for the new VP-PR say he or she will report to COO William Murray and other Society staffers. The new VP-PR will not report either to the elected CEO of the Society or to the board. The indication is that Yann was also under those reporting lines.

Exhibitors Will Be Contacted

Since it appears likely that O’Dwyer reporters will be barred from the exhibit hall again this year, we are contacting the 88 PR service firms that exhibited from 2010-2012, asking them for news of their new products and services.

The stories will be included in the 2014 O’Dwyer’s PR Buyer’s Guide that will be part of the January edition of O’Dwyer’s magazine. The issue includes a directory of more than 100 PR service firms whose products are divided into 56 categories. It also covers crisis communications PR practices and is the largest issue of the year.

The 43 exhibitors at the 2012 Society conference included 26 returnees from 2011 and 17 firms that were not present in 2011.

The 2012 exhibitors were American Pop, BurrellesLuce, BusinessWire, Cision, EureAlert, Family Features, Give the Kids the World, Int’l Visitors Center, iPressroom, Leadership Directories, Marketwire, MediaVantage, Meltwater Group, Moreover, NAPS, NYU, PIER Systems, PR Newswire, Quinnipiac University, Synergy Events, Syracuse University, Thomson Reuters, Tufts University, TVEyes, Vocus, and West Virginia University.

Twenty-one (45%) of the 47 exhibitors in 2011 did not return in 2012. They were Booz|Allen|Hamilton, Charet and Assocs., ClickSquared, Coverago, Dow Jones & Co., Education Partnerships, George Washington University, Kelton Research, Magnify Digital, MyMediaInfo/Red Egg, National Black PR Society, News USA, New York Times, On the Record…Online, PitchEngine, Queue Assocs., Rutgers School of Communications, Solodev, TEK Group, TRAACKR and VeraQuest.

Some Firms Balked at $10K Rate

Service firms in 2012 were offered a combination "sponsor" designation and standard exhibit booth for $10,000. Some exhibitors told us this was too steep for them.

The Society had declared "war" in 1995 on a group of about 50 exhibitors who in 1990 organized the PR Services Council. They pushed for exhibit halls that were close to where the sessions were taking place.

COO Ray Gaulke asked to speak at the Council meeting on Jan. 19, 1995. He stunned the group by telling it the exhibit hall was being closed. He said it lost money and he would seek one or two overall sponsors such as IBM or Intel. The hall did not open again until 1999. The Council quickly folded, having lost its purpose. No "overall sponsors" were ever obtained.

The services group had been successful in obtaining a "classroom" on the exhibit floor where complicated new products could be explained.

The exhibitors also pushed for more conferences in New York since transporting exhibits to cities across the country was expensive and many of the exhibitors were based in or near New York.

This ran into culture of the Society which objects to claims that New York is the "communications capital" of the U.S. There were national conferences in New York in 1992 and 2004 but no further conferences in the city are planned until at least 2019. Cities other than New York have been picked but the Society won’t reveal them. The Society moved h.q. downtown in 2004—far from the midtown PR community. Influential members feel that New York members should have no more use of h.q. than members in any other city.

With the expected election of Kathy Barbour of Coral Gables, Fla., as chair-elect for 2014, that will mean four of the last six chairs are from the South including Mickey Nall of Atlanta, 2013 chair; Rosanna Fiske of Miami, 2011 chair, and Gary McCormick of Knoxville, 2010 chair. Joe Cohen of New York will be 2014 chair and 2012 chair was Gerry Corbett of San Bruno, Calif.

The numerous Southerners in Society leadership posts were listed in a blog dated 8/1/2011.