- PR in a Changing World discusses how the media landscape and trust in institutions has shifted from a top-down model to a more horizontal, peer-to-peer model with the rise of technologies like the internet and social media. - Mainstream media is facing challenges adapting to this new landscape where audiences fragment across various platforms and have come to trust peer recommendations more than traditional advertising or news coverage. - This has implications for how PR and media companies must operate, focusing more on engagement with consumers across both top-down and peer-to-peer channels to build trust and influence in this new media environment.

1. PR in a Changing World Richard Edelman CEO, Edelman July 5 th , 2007

2. The Pyramid of Influence One-way Hierarchical Packaged Messages Advertising Elites MASS Three Ads in Primetime TV in US would reach 95% of women in 1967 vs. 50 ads today (Forrester)

5. Intersection of Top Down and Peer-to-Peer Models Horizontal Peer-to-Peer Model Traditional Top Down Model Sweet Spot The ability to play between the two Mutually Reinforcing

6. # of Internet Users N. America = 35% of Users in 2000E; 16% in 2007E Geographic Distribution of Internet Users (MM) 390 491 621 724 851 977 1,122 1,302 Note: ROW denotes rest of the world Source: Morgan Stanley Research

7. Source: comScore Global MediaMetrix 4/07 User-Generated Content (UGC) – YouTube + Wikipedia + MySpace Have Moved to Top of Internet User Pack Total Global Unique Visitors (MM) Rank Property 4/07 Y/Y Growth 1 Google 528 12% 2 Microsoft 520 3 3 Yahoo! 468 1 4 Time Warner 267 21 5 eBay 248 (4) 6 Wikipedia 209 71 7 YouTube 163 506 8 Amazon 137 1 9 CNET 120 33 10 Ask 111 (9) 11 Apple 115 29 12 MySpace 107 86 13 Adobe 101 (5) 14 Lycos 79 (14) 15 Viacom 81 65

8. Sources: (1) Adapted from SRI-Knowledge Networks (2005). (2) Adapted from Universal McCann, (2005); Internet Advertising Bureau (2006). (3) Veronis Suhler Stevenson (2005), Yahoo! Analyst Day (5/04). Youth defined as age 17 and under. Ratios are calculated as percent of US media usage on a medium divided by percent of US ad spending on a medium Large Gap Between Internet Consumption / Ad Spending

9. At Critical Mass Inflection Point for Usage of High Speed (Broadband – 2.5+3G) Mobile Networks Source: Morgan Stanley Telecom Research Scott Coleman, John Marchetti. Global 2.5G / 3G Penetration 2.5G / 3G Ramp in 25 -30% Penetration Sweet S pot 3G likely at 25% penetration in 2010E…

10. Only 25% of 30 Year-Olds Read Newspapers Daily Source: General Social Survey Archive, 1972-2004 Daily Newspaper Readership by Age

11. Newshounds Migrating Online Sources: MS Media team, comScore US MediaMetrix 4/07 Circulation of top 50 newspapers vs. online news unique users US Unique Users (MM)

19. Watch Where Global Younger Generation Goes Social Networking Ringtone Downloads, Connecting Mobile to Net Video Web OS Programs In-Game Advertising Blogs Tencent Instant Messaging (PC / Mobile) Knowledge Sharing

20. Blogs As Subject Experts

21. Blogs Feeding Mainstream Media July 28 th 2005

22. Credible Sources for Information about a Company In general, how credible do you feel each of the following sources is for information about a company ? Is information about a company that you get from (INSERT SOURCE) extremely credible, very credible, somewhat credible, or not credible at all? TOP 2 BOX EU North America Latin America Asia % % % % Articles in newspapers 33 36 54 46 Television news coverage 41 35 53 57 Articles in business magazines 51 53 68 45 News coverage on the radio 44 38 54 52 Corporate or product advertising 11 13 41 19 Communications issued by companies such as press releases, annual reports, and newsletters 32 27 49 36 A company’s own website 18 19 47 31 Stock or industry analyst reports 54 46 67 43 Weblogs or blogs 17 16 24 20 Conversations with your friends and peers 44 37 63 48 Entertainment, such as movies and television programs 14 15 36 23

23. US Credible Information Sources: Business Magazines Remain Most Credible In general, how credible do you feel each of the following sources is for information about a company? Is information that you get from [SOURCE] extremely credible, very credible, somewhat credible, or not credible at all? Highest ranked Lowest ranked TOP 2 BOX 2003 2004 2005 2006 2007 % % % % % Articles in business magazines 49 45 55 66 55 Stock or industry analyst reports 26 34 49 52 47 News coverage on the radio 32 36 40 48 39 Friends and family (2003-2006)/Conversations with your friends and peers (2007) 35 44 42 58 37 Articles in newspapers 35 32 42 44 37 Television news coverage 20 30 32 38 35 Communications issued by companies such as press releases, annual reports, and newsletters 19 30 31 36 28 A company’s own website 13 21 24 31 20 Weblogs or blogs N/A N/A N/A 17 16

24. Credible Spokespersons for Information about a Company In general, when forming an opinion of a company, if you received information from (INSERT PERSON) about this company, how credible would the information be? Would it be extremely credible, very credible, somewhat credible, or not credible at all? TOP 2 BOX E.U. North America Latin America Asia % % % % A person like yourself 53 51 83 54 Doctor or healthcare specialist 50 49 80 56 Non-profit organization or NGO representative 46 44 67 48 Academic 45 47 70 48 Financial/ Industry analyst 45 43 71 47 Regular employee of company 34 36 54 39 The CEO/leader of your company or employer* 32 31 62 48 Lawyer 30 16 35 43 Government official or regulator 25 22 30 41 CEO of a company 24 22 55 41 Public relations executive 15 12 46 22 Entertainer/ Athlete 14 11 39 24 Blogger 13 9 21 18 Highest ranked Lowest ranked * Asked only of employed respondents

25. US “A Person Like Me” Defined by Interests Not Demographics

34. Frequency of blogging in Italy Q.1 How many days in an average week do you read so-called web-logs or blogs. These are websites that provide personal commentary, journal entries, recommendations and links to news articles and other sites of interest compiled by an author and his or her readers? % Read Blogs 16% 15% 23% 22% 27% 14% 16% % Do Not Read Blogs 73% 84% 75% 68% 69% 79% 85%

35. Blogging in Italy by age Q.1 How many days in an average week do you read so-called web-logs or blogs. These are websites that provide personal commentary, journal entries, recommendations and links to news articles and other sites of interest compiled by an author and his or her readers?