The earth moved under the feet of the PR industry earlier this month when Google did something simple: it distributed its own earnings announcement. It didn’t rely on one of the paid channels such as Businesswire, PR Newswire or Marketwire (among others).
To the untrained eye this seems rather simple. Companies put out content all the time, why is this any different?
I’m not going to try to rehash the idea that the press release is dead. It’s not. PRWeb pointed out at the MarketingProfs event this week that they will distribute 90,000 press releases this year alone. That’s just one service.
A lot of people saw Google’s move as an opportunity to talk about the Social Media Release, but that’s just another way to put content out through the same channel, it’s not a real change.
No, the trick here is understanding the different channels and how channels differ from form. Wire services offer a different distribution channel and for public companies it’s an important channel. On a very basic level wire services smooth out a lot of the bumps in putting out an earnings announcement. Let’s face it, the Securities and Exchange Commission doesn’t make things easy, so if you want to make sure you satisfy all the fine print within their fair-disclosure rules you may as well just hand your announcements over to them and be done. Paying $5000 or so per release certainly beats the legal fees you could add up by messing things up on your own.
That said, wire services aren’t the ONLY way to get news out. For some companies, like Google, their blog or online newsroom speaks directly to investors. Why not engage them there? Also, just because you have a channel doesn't mean you're restricted to form. You can have a blog full of "press releases" and a press release that looks like a blog post. You can write an interesting news-based story and put it out on a wire service. If you're Conan O'Brien you can even write a letter.
Howard Berkenblit, a partner in the Corporate Department at Sullivan and Worcester, who spoke with the Fresh Ground Podcast a while back, told me recently that the SEC ruling regarding putting out material news on blogs boils down to making sure you have an established news channel before using it. Google has certainly done that.
But what does this mean for the wire services? Phyllis Dantuono, executive vice president and chief operating officer for BusinessWire says it doesn’t mean much. “Bottom line is that we do not anticipate any major changes in how companies will communicate with the marketplace in the future,” she said in a written statement. “Most companies clearly recognize the risks and limitations of the SEC's interpretive Guidance Release, and have wisely decided to stick with a disclosure system that works.”
BusinessWire also sent along a MotleyFool.com article that went so far as to call Google’s decision “evil.” Rich Smith laments that Google has created a fragmented system in which “investors could soon be forced to scan the websites of every company they own, daily, continually, to be certain of not missing out on important news.”
I think this misses the mark entirely. I’m sure Smith doesn’t have only one source for news today. In fact, he probably has some sort of new aggregator that helps him find the news he wants, probably some sort of RSS reader. He probably also has Google News alerts that tell him when something goes live. Then there’s the fact that companies come out with earnings announcements on a pretty strict schedule, so it’s not like these are surprises. No, Google hasn’t made the news more difficult to find, they’ve just slightly changed how you access it.
In fact, they made it a little easier. Former Sun CEO Jonathan Schwartz had argued for years that the SEC’s disclosure rules unfairly favored the few. Subscribers to the wire services received the news, while those who didn’t were left waiting. Putting important news out on a blog, the argument goes, fixes that. Well, that is, unless we run into a situation in which companies like Comcast control whose content gets green lighted.
Still, there’s an action here for small, private companies to consider: where do you put your news? Our suggestion here at Fresh Ground is to establish your own news channel through an online newsroom. Not just a stagnant place where you repost your press release, but an interactive social media newsroom that lets you post different types of content and lets your audience interact with and share that content. Todd has been working hard with the IABC on establishing this sort of thing.
But the most important reason for establishing your own news channel is that despite Dantuono’s assertion that many companies will continue to use wire services, I believe that many won’t. When the earnings announcements disappear, so will much of the available revenue for wire services.
I’m not saying the wire service channel will die out entirely, but you will certainly see a thinning over the next couple of years. I can’t guarantee that the big players will continue to thrive, since some of the smaller players (like PitchEngine) do similar work for less money and a lower overhead.
So your best move may be to create your own and as you engage with your customers, partners, investors and other influencers, let them know where your news will end up first.