Wednesday, August 13, 2008

If You Don't Like the News, Lay Off the PR Folks

NebuAd has let go both its internal PR team and its PR firm. Their PR firm, The Horn Group, confirmed the parting of ways according to this piece on The Register.

One understands why the layoff occurred, though in the defense of the team, NebuAd is certainly in new waters where there is little precedent as to how to shape public opinion. Dustups about BT were pretty minor in the past, and there are plenty of companies collecting PII, which would seem on some level more serious than what NebuAd does.

What's interesting about the layoff is the accompanying info that they are going to hire a new PR team focused less on business press and more on regulatory issues. What THAT says is they expect a tough row of hoeing over the fate of their ISP based out opt model.

I'll say this for NebuAd's now separated PR people: these folks know how to spread the word. This is not left handed praise. Before Robb Topolski's report, NebuAd was travelling with full sails of largely excellent press coverage. Their CEO was EVERYWHERE touting the power of their model.

You can fault them for not having a better plan for the regulatory and PR problems that befell the company beginning a month or two ago, but for pure corporate hype and PR these people knew their stuff.

Perhaps you will find that an odd point to make -- what I think it means is that PR< like virtually every other area of marketing these days, is increasingly becoming a field for the versatile. While the web seemingly ushered in an era of experts, the opposite seems to have occurred. Companies are moving away from the dedicated digital team toward a model where EVERYONE is expected to know about digital, because it is the central core of current and future marketing.

In the PR vane, operating a powerful PR organization will be about more than a hype team -- it'll be having a sound strategic approach to both the hype development mandate and the contingencies for potential public or industry backlash.

Here's a piece of what MediaPost's Wendy Davis wrote on the topic of the layoffs and the future of NebuAd:

It's not surprising that NebuAd would be feeling an economic squeeze, given that several broadband providers have suspended plans to work with the company while Congress investigates. Lawmakers are now questioning whether companies like NebuAd and Phorm, which purchase data about users' Web-surfing activity to send them targeted ads, violate federal wiretap laws. Rep. Ed Markey, for one, has said he believes ISP-based behavioral targeting requires users' opt-in consent.

Still, the layoffs, combined with the new PR strategy, make clear that NebuAd didn't anticipate the degree of pushback it's now facing, both from policymakers and privacy advocates. Of course, until this summer, NebuAd didn't have much reason to think Washington would take an interest in its activities.

For the most part, online behavioral targeting seemed to fly under lawmakers' radar earlier this decade, when companies like Tacoda and Revenue Science were getting started. That situation had started to change by 2006, when the Center for Digital Democracy and U.S. Public Interest Research Group filed an FTC complaint about behavioral targeting techniques. The FTC held a town hall meeting last November, but few people were yet discussing NebuAd and other companies that rely on data purchased from ISPs.

But when news that NebuAd was testing its ISP-based targeting model trickled out earlier this year, it was clear that behavioral targeting was entering new territory. Older companies only know when users visit a site within one of their networks, but ISPs know about all sites that are visited and all search queries entered.

SO what IS the future of NebuAd??? Naturally as an outsider I have no idea, but here are my guesses:

1. A name change. Whether deserved or not, they may as well be called KGB Industries at this point.

2. A freeze on making efforts to sign up for ISPs AT LEAST through the end of the year. My understanding is that they have already begun this free period. I think this would make sense not because it'll actually make a difference in sign-ups from ISPs -- my guess is that the doorbell isn't ringing right now -- not when BNET is reporting that the feds are investigating the company under wiretapping laws. But rather as a signal throughout the organization that they need to make their model right.

3. Some sort of consumer communication solution that will make opt-out a more palatable solution. I don't think they will go opt-in -- I don't think opt-in is a realistic approach for an ad network. There's no consumer value to all this beyond the dubious possibility that it lowers ISP costs.

Will this stuff come to pass? I have no idea. But I do know that those layoffs were probably necessary given the burn rate. Even after the layoffs, 60 people is a big pile of salary and bennies.

Thanks for reading, and don't forget to write.

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