I posted this last week, but an IE bug was causing problems with it.   Turns out the original image was causing the problem (a photo of Gary V…who knew he’d take our blog down .  here’s the repost

I just finished watching Gary Vaynerchuk’s video explaining how word-of-mouth marketing is changing and what this means for brands today.  Great stuff…totally entertaining and Gary does a great job of explaining word-of-mouth in a simple, powerful way.  He describes the change like this:

Word-of-mouth has always been the most powerful (form of marketing)….But here’s where it gets (even more) powerful.  Word-of-mouth has fundamentally changed in the last three years, because of social media.  Twitter and facebook and other products like that have allowed your voice to go extremely viral.  So let’s just say Chris Mott over here was the biggest socialite in New York City and he just went to every event every night.  He was the biggest yenta in town.  How many possible people could he tell about your service?  Five hundred?  A thousand, if that’s all he did for a month?  Well now, one press of the button on twitter and tens of thousands of people are going to know.

Gary goes on to say:

Plus, understand word-of-mouth.  So now you tweet something else.  Well then somebody blog posts about it.  Somebody StumbleUpon’s that.  Somebody digg’s that.  The tail of word-of-mouth is the power of what the Internet has created.  As soon as you understand that, the sooner you’ll be able to build brands on the Internet.

Exactly right…and the beautiful thing for small and mid-size businesses is that big companies still aren’t participating to any great degree, which gives you a great opportunity to establish yourself in the marketplace.  According to research conducted by Ross Mayfield and Chris Anderson, only 12% of the Fortune 500 are blogging, which is WAY below the average for private companies.  Given the low level of participation on blogs, you can only imagine what the numbers must look like for social services like Twitter, facebook, digg, etc.

Why aren’t big companies focused on social media marketing and word-of-mouth?  Simple…they don’t feel the impact of not participating, so they don’t think they have to be.  They can skate leveraging traditional channels and relying on the brand equity they’ve built up over years.  We’re in the midst of the single biggest change to marketing since the advent of television, and as a small business it’s almost impossible not to feel the impact of this.  Big businesses won’t feel it for years though, so inertia keeps them from acting…momentum keeps a supertanker moving forward for a long time, even after the engines have been turned off.

At this very moment, someone in a Fortune 500 company is in a windowless conference room walking his boss and peers through a 42 slide PowerPoint about how social media marketing is “for real.”  When he finishes, everyone will congratulate him on the great work and they’ll all agree that “this is something we really need to keep our eyes on.”   As anyone who has worked in a big business knows, this is code for “I’m not doing s**t until someone tells me I have to or until it shows up in my bonus plan.”  For small and mid-size businesses, this provides a great opportunity to use twitter, your blog, comments and all sorts of other social tools to build the brand, pick off customers with long-tail searches, engage with the new influencers in your market, etc.  By the time the big business finally realizes that it needs to get off the dime, you’ve already established yourself…and the competitive advantage is sustainable because as easy as it is for the supertanker to rely on momentum to coast, it’s equally as hard to get it moving again once it stops.

Update: Jason Falls has a great case study up that demonstrates how one small business is incorporating social media into their business.  My primary focus in this post is on lead generation whereas Jason’s case study focuses more on the value that this business is getting in the middle part of the sales funnel (brand preference and consideration).  Definitely a worthwhile read.

Steve Rubel and Katrina French (by way of Jason Falls’s blog) got me thinking about my experience and that, thanks to Google, SEO and PR are ultimately becoming the same activity.  Same strategies, same tactics, same metrics.  Steve writes, “Google Page Rank is the ultimate way to measure online influence“, and Katrina says, “search and social are…intrinsically linked.”

So if you believe that the goal of PR is to get influencers to bring attention to your client or company, and Google PageRank is the ultimate measure of influence (and since we know that PageRank flows from one party to another vis-a-vis links), then a central goal of PR should be to acquire valuable, PageRank-passing links.

If you apply this to social media (which traditional PR agencies are now beginning to seriously engage), as Katrina points out, all these things that we’re doing in social media– building relationships, participating in conversations– all ultimately relate to search.  What’s search driven by? PageRank. Which goes back to links.  So this is all a big PR strategy.

I predict that we’re about to see a merger between two fields that couldn’t be more different.  Public Relations pros are (and I’ll generalize gratiutiously) some of the smoothest and nicest people you could meet– they are fantastic at building relationships.  SEO’s are, to put it nicely (and I count myself among them), usually geeks and hackers who have been toiling away in ways only alchemists would appreciate.

Lately, SEO’s have been talking about the fact that 75% of what moves the search results needle are off-page factors, and highest among them is link-building.  Yet the old methods are starting to falter — nowadays it’s about linkbait, better link pitches, press release optimization, and social media engagement.  And that pushes us toward doing things the old-fashioned way with human relationships.  You simply cannot expect to pitch bloggers, promote linkbait, ask webmasters for links, propose link-positive content partnerships, comment for dofollow links, promote your content on Twitter, etc. without quality relationships.  As Chris Brogan suggest, get to know people first, then ask.

For a lot of SEO’s, the prospect of our jobs relying on relationship-building is a little scary, which is why the merger with PR is inevitable.  PR people’s skills are simply too relevant and valuable to this process.  For PR, the Google PageRank paradigm is simply too dominant a measure of influence for clients not to expect their agencies to direct their efforts to improve it.  So look out, these two industries are about to merge.  It should be fun!

Updates/Comments

#1 Response to the argument that PageRank isn’t the best influence measure.

A few folks have argued that PageRank is not the best measure of influence for a variety of reasons.  Let me make a distinction– I care about measuring my influence in terms of the PageRank that I acquire– not particularly the nominal PageRank of influencers who link to me.  You can’t go around evaluating every prospective influencer by the PageRank stamped on their head.  However, your PageRank is a valid measure of your online influence compared to your competitors (which is ultimately what matters in the search results).

#2 Response to the argument that nominal PageRank is inaccurate.

I don’t want anyone to be confused that I’m saying they should focus on the nominal PageRank that’s displayed in the toolbar.  It’s a subtle distinction, but somewhere in the Google universe there exists a very precise, up-to-date calculated value of PageRank which I’ll call “true PageRank” that is factored into your position in search results.  For stats folks, the “true PageRank” is like the true regression line.  It exists in theory, but we can only see it via estimation, which contains error. Anyway, the point is that we should be focusing on activities that drive up our “true PageRank,” and evaluating how we spend our time and resources in light of it.

Now that the launch conference Ultimate Smack Down — TechCrunch50 v. DEMO– is over, I figured I’d take a few minutes (now going on few hours) to look at which conference’s presenting companies were more successful in generating press this week, based on a little Google News and Blogs research.  And here are the results:

A couple observations– DEMO companies received a much more uniform amount of press coverage (i.e. Google News hits) .  The top 25% of companies at DEMO received 3.3 times more press mentions than the average of the bottom 25%.  At Techcrunch50, the difference between the top and bottom quartiles was quite a bit more extreme– 8X.  This suggests some the best TechCrunch50 companies got much more press coverage that the worst, whereas at DEMO even the least-covered did ok compared to the most-covered.

But… if you look at blog coverage, TechCrunch50 was more uniform (they ended up with roughly the same distribution of coverage between bloggers and press).  TechCrunch50 presenters got more “steady” attention from bloggers; even weak DEMO presenters got a disproportionate share of coverage from traditional press.

The companies that got the most coverage at each conference were microcosms of these events– TechCrunch50’s big press winner was Ashton Kutcher’s BlahGirls with 78 press mentions (or measured by blog posts, DropBox, with 379).  At DEMO, it was Plastic Logic with 117 press stories and 2,367 blog posts.

While this is all very interesting, it would be too strong to declare DEMO the absolute winner; I have a few thoughts and caveats:

• * Mainstream tech and business press are still attending DEMO.  Kara
  Swisher told me she was at DEMO Monday and Tuesday, and was hoping to
  swing by Techcrunch50 afterward.
• * Techcrunch50 presenters tend to be smaller startups with a small (or no) PR budget
• * DEMO offered more established companies (e.g. Best Buy) who have press who cover them regularly
• * DEMO has more presenters, increasing the likelihood of round-up stories that mention multiple companies
• * DEMO had more companies unveiling core technology, whereas Techcrunch50 was mainly about applications
• * DEMO wrapped up yesterday; Techcrunch50 just wrapped up today, so some stories may be yet to be written on Wednesday’s presenters (however I’m not sure this was a huge effect if you look at how Monday’s TC50 presenters have fared)
• * The article counts include wire service press releases — DEMO may have shown more press mentions due to press releases, which many TC50 companies may have skipped.
• * The general meta coverage has been generally blasé; WebWorkerDaily said that it was a pretty blah week overall, so they didn’t cover any of it; that trend could favor DEMO because they had the big hit– Plastic Logic.  Who woulda thought this was a hits business?

I’ve saved the searches I used for this analysis (generally “company name”, past week, sorted by date with duplicates included) here: Techcrunch50 Google News Searches; DEMOFall08 Google News Searches.  In a few cases (Rudder, Yammer, Footnote) I had to search company+conference to filter out false positives, which I did manually (so it’s not saved in these searches).

The saved searches are “live” and will continue to update as more articles are filed and echo press comes in, so that should be fun to watch.  Email me if you’d like the spreadsheet (jeremy at buzzstream dot com).

Update: Found a great post from Allen Stern, who was on the ground at both conferences.

ReadWriteWeb posed a different question today: Does Good Tech Need PR at all? Yes, you absolutely need some level of PR.  What RWW suggests is that there’s an inverse relationship between how compelling your idea/technology is and how much PR you’re going to have to do.

The fantasy world scenario is that you release your product on Monday, get some initial coverage on a few blogs, more bloggers find it, you hit Techmeme by the weekend, and then before you know it Walt Mossberg (WSL) and David Pogue (NYT) are calling begging for exclusive interviews.  Then the press is calling non-stop.  Before you know it, you’re joking around with Leno in the Green Room.

Ahem, the more likely scenario is that your technology is great but needs some explanation.  Nobody is begging for an exclusive and getting coverage requires actual sustained effort.  So then the question turns to whether you can sustain the effort yourself, or whether you need an agency.

Here’s a quick self test of whether you should consider getting a PR agency:

1. Can your technology/solution be understood in a 3 second sound bite?
2. Do you know who should be covering your story, like which specific blogs and reporters?
3. Does your story lend itself to being told?  Does it have a “hook” such as controversy, a great solution to well understood widely felt pain, or famous founders?
4. Does one of your founders communicate well?  Do you have someone who can communicate with the press, comment on blogs, and whose email messages don’t consistently elicit cringing?  And does this founder have time to handle communicating?
5. You don’t have ready access to a cheap, skilled PR agent with many contacts in your industry?
6. Is your company’s current bank balance below $1M?

If you answer “no” to more than two of these questions, you may want to consider using a well-connected, hopefully reasonably-priced, PR agent in your industry.  Obviously for bootstrappers this may still be a non-starter, so the job (like taking out the trash and watering the plants) falls to one of the founders.  But this little test gives you an idea about whether doing your own PR presents so many obstacles that your time would be better invested in other things.

For tech-related founders, beware of your natural instinct to over-invest your time in your product and technology.  Getting the word out about your company is one of your most important jobs, so don’t neglect it regardless of whether an agency is the right path.

Lastly, Scoble argues that you shouldn’t do any outbound PR at all– you should build something so awesome that your beta testers become your evangelists and are inspired to contact their trusted press contacts on your behalf.  Steve Rubel agrees. I’m not wild about this kind of hit-or-miss approach.  Most Type-A entrepreneurs won’t be either.

What are you supposed to do when your beta is almost over and you have no coverage?  Invest more in the product?  Pray? No, it’s time to take matters into your own hands.  Fire up the outbound engine… post to your blog, Twitter, comment on relevant blogs (without plugging or pushing your company), and, ahem, send friendly, relevant email to bloggers and reporters who should be writing about you because you’ve been following them AND built some kind of relationship over time.  Techcrunch also has some great suggestions about how this actually works.  It can even be fun!  I don’t mind trying the Scoble-Rubel build-pray-discover strategy, but it might not work for you, and you can’t just sit there doing nothing or build your product forever.

• Paul May, CEO – Paul was employee #1 at Support.com (SPRT) and has held senior roles in several Austin area startups, most recently at Alterpoint.
• Jeremy Bencken, Chairman – Jeremy co-founded ApartmentRatings.com and TenantMarket.com which were acquired by Internet Brands (INET).
• Randy Hammelman, CTO – Randy founded Conducive Consulting, a custom software development services business which has served a number of Austin companies.

We’re also excited to have great people advising us, including Pam O’Neal, VP of Marketing at BreakingPoint Systems, and Jack Long, founder of Chairman of PeopleAdmin and Master Teacher with the Acton MBA program.

While our product is still baking, we’re going to be blogging about issues relating to Internet Marketing, with a special emphasis on Blogger Relations, SEO, and PR.

• Interesting business models are emerging in mobile apps, but app integration is a costly problem for startups ($60k per platform port).
• Selling display advertising to CPG advertisers requires going direct to the brand, skipping the agency.
• Link exchanges aren’t working but “strategic partnerships” are — you need a highly relationship-based approach for this path.
• Several companies have tried multiple PR firms without success – The pirate perspective: start building your media list early, do you own PR in-house, and hire a firm once you’re comfortable with it having 50/50 (and maybe a little less) odds of success.
• Videos posted on YouTube are driving traffic – there’s a new trend in people turning to YouTube searches first for information on how to do things; these don’t have to be so-called “viral video” a simple ‘How To’ instruction video will suffice.
• Recruiting – Finding Ruby and Java developers in Austin is a serious problem.
• The fundraising environment is very difficult – some attribute it to a disconnect between consumers and investors.

The last point is one that’s probably most debated.  Here’s my perspective over the last year of attending CTAN screenings and presentations: people like to invest in what they know and/or enjoy.  The number of folks in Austin who have earned their money from consumer web offerings AND who are active angels is quite small compared to angels who came from service businesses, enterprise software, systems management software, semiconductors, and Dell. 

That said, I’ve seen a number of non-B2C angels step up to consumer startups.  But when they do, they tend to be fairly cautious.  For early-stage (seed and/or Series A) Austin consumer web companies, here’s my take on the profile of successful angel raises:

Angels: A working product, a scalable model, revenue, and a willingness to exit.  It also really helps to have a serial entrepreneur as a founder.  Your raise should be between $250k and $1M.

Some smaller funds like G51 have been active B2C funders, as have a few out-of-town VC’s like True Ventures, Benchmark Capital, and DAG Ventures.  Here’s my take on the profile of successful VC raises:

VC’s: A working product, a scalable model, a compelling, innovative, and defensible take on an emerging market, and the potential for a billion dollar exit in 5-7 years.  Your raise should be $1M or more, although there was some talk that $1-$3M is no man’s land right now.  If the founders are first time entrepreneurs, it also doesn’t hurt to have some ivy on their resumes.

Agree or disagree, feel free to comment.

My background: I co-founded ApartmentRatings.com in 2000, built the site to over 100 million page views per year, and sold it last year (after seven years) to a fairly large Internet company from LA. In
the process, we never spent a dollar on PPC advertising or PR agencies, and we bootstrapped all the way.

My goal is tell other entrepreneurs and marketing people, and basically anyone who’s trying to figure out a way to get their product or service to take off, about our mistakes and what worked for us.

This first post was inspired by two things: Jason Calcanis’ post about ideas to help startups save money and a SXSW session called startup metrics for pirates. Yarr. (Ok, that’s it for my pirate schtick.)

One of the items on Jason’s list is, “Really think about if you need that $15,000 a month PR firm.” Fred Wilson and Mark Cuban agreed.

ApartmentRatings.com never had a PR agency and we got full page stories in the NY Times and Washington Post, A1 in the Wall Street Journal, an NPR interview, and write-ups in dozens of blogs like SearchEngineWatch and other major market daily papers.

With the press, we attracted a lot of good traffic (and clippings my parents could show their friends), but the thing that was more important to me was that we got lots of valuable organic links from highly reputed sites. I basically viewed PR as a form of SEO strategy. I strongly feel that PR is the most potent SEO
strategy on the planet because there are fewer more credible sources than newspapers and a good blog post from even a long-tail blog often gets picked up by A-listers and mainstream media.

This blog is going to go in some depth on how we did it, but here’s my first suggestion:

Don’t buy a media list from Bacon’s or Vocus; build it yourself with Google Alerts.

Go to Google Alerts and create some searches that will surface reporters you’d care about (and more importantly who might care about you). You can search competitor names, related companies, or basically anything you think would be in stories written by reporters who might cover you. If you do this right, you
should get 10+ stories a day in your Inbox that will be written by reporters who are covering your space. They are your media list.

Make a Spreadsheet to Store Reporters Addresses

Make a list in Excel with the reporter’s name, email and phone, and some notes about what they wrote, and start building your list. Many major papers put the reporter’s email address somewhere on their stories, so the easiest thing is to just copy it off the story. This is also true of phone numbers. If that doesn’t work, I’d visit a publication’s “Contact Us” page to figure out what the email standard is for their newspaper. If that doesn’t work, you can always guess that it’s either first.last@domainname.com or flast@domainname.com. I know it sounds like a time consuming pain-in-the-arse, but you gotta do what you gotta do. This is “pirate” PR my friends… do what works. A little bit easier is the phone number… you can often get the main number
for the publication by Googling “Publication name, city, state” and if that doesn’t work, look it up from
their DNS records.

So that’s your first lesson in pirate PR. Build a media list based on what reporters are actually writing (not by the categories that Bacons or Vocus have encoded to them), and lookup reporters email and phone numbers for free.