Don't let your service levels drop

As the economy continues to struggle, those in the service sector need to remember that the customer service they provide can remain at a high level (or perhaps even improve). Of course a changing economy may hamper people's ability to offer services they may have done in better times. Indeed financial pressures will almost certainly encourage businesses to enforce contract terms more rigorously. This may prove a costly mistake for some, especially if the 'letter of the law' approach is combined with poor customer service.

Today I was involved in a car accident. Some guy decided to turn left without really checking to see if there was a car coming the other way and drove straight into me. To say that his insurance company were less than friendly when I called them would be an understatement. Now I know they are trying to limit their potential loss here but by being borderline rude they have ensured I will never use them for insurance. It costs nothing to be polite and to show that you understand the needs of the other person in a service situation, something this insurance agent has never been taught. So when clients come asking for the moon and want you to do the work for next to nothing please remember to listen and to empathize with their challenges. You shouldn't need to agree to requests that mean you would be giving your time for free at a time when you can least afford to do it. Equally you shouldn't leave them feeling like you were being rude to them. This isn't always easy, especially when clients are under pressure and are themselves being rude but it can be done and the PR people who can walk that line will do very well.

The new black

Just as in the fashion industry everyone awaits the answer to the question: "what's the new black?" business leaders should be asking "what's the new behavior?" The new behavior I'm referring to here is recession behavior. Of course the obvious signs of the new behavior are people being more cautious with their spending. However, the behavior shifts are a lot more complex than that.

The new behavior is built on people replacing one action with another. For example I heard from a friend who is a family doctor that many of the patients that would normally be in her office at this time of year complaining about a cough or cold are simply not coming in. This isn't because they don't have a cold but because they don't want to make their copay. So instead of going to see a doctor they are taking over the counter medicines and riding it out. Put another way they are still doing something. They're just taking a different (cheaper) path. Of course this may end up being an equally expensive route and could even wind up being more expensive.

Replacement recessionary behavior as I'd call it, is something we can expect across all aspects of life and isn't simply limited to consumer behavior. This is something PR people need to consider when they plan activities for '09. For example is your client's product a product that could be a replacement for another more expensive (normal market conditions) option? Or is it a product likely to be replaced by another? In many cases the way the product is sold will need to change. For example if you are selling chocolate or a latte I'd suggest it is sold as a replacement to those who are cutting back on eating out. If you can do this it may actually open up a new market.

As I mentioned this type of behavior won't be limited to consumer markets. For example in business, people are cutting back on off sites and business travel. How about spending some of that saving on Skype video conferencing technology (a few cheap web cams)? I for one would much rather do a video conference than spend hours on a United Airlines flight across country. In other words for every change in behavior there is an opportunity. The challenge is how to make your client's product or service the beneficiary of this change. In some cases it will require some creativity but I can assure you it will be worth the effort.

Can PR agencies grow in '09?

Now that the US and many other major economies are officially in recession it is tempting to believe that 2009 is going to be a horrid year for PR agencies. I suspect for some it will be. There will be plenty of lay offs as smaller clients cut back and larger clients become more cautious with their marketing spend. But it needn't be all bad news. Agencies may well end up with limited if any financial growth but they can grow their business in plenty of other ways. Agencies can finally embrace good measurement techniques, social media and other related digital services. They can explore ways to extend their services so they better integrate with other marketing services. Put another way, consultants can increase the skills they are able to offer clients and therefore increase the return the clients get from their investment.

I think it is also worth noting that not all PR agencies are the same (I know how obvious that statement is). I say this to remind consultants that the fortunes of agencies lie in the skills of the management at the agency, the strength of their client relationships, the products they offer, the ability of the agency to demonstrate value and of course a little luck. This means that some well run agencies that are also lucky may well grow in the next year or two. For PROs wondering if their firm will be one of them they need to evaluate the management, product offering and client base. They then need to ask themselves how their agency scores. The luck part is of course impossible to measure but its is worth noting that the better agencies are likely to also be the luckiest. Indeed I think it was the golfer Gary Player that said the more I practice the luckier I get.

Getting ready for '09

Queen Elizabeth described 1992 as her "annus horribilis". Put politely it had been a miserable year for the royals. For many in the financial world 2008 has been their annus horribilis. The collapse of major banks and the credit crunch have driven the world into a recession that is likely to last through most if not all of 2009. This leaves the PR industry with a challenge as it prepares for 2009. At this point most agencies I've talked to have seen little real impact on their current budgets. What is less clear is what will happen in '09. In the next few weeks, clients with calendar financial years will be setting new budgets. Some will inevitably cut their spend, while others will look at ways of consolidating what they do spend with fewer agencies in a bid to gain some economies of scale. Indeed I think this will be a tough period for the small independent agency that derives more than 30% of its revenues from larger companies. In tough times there is a flight to the apparent safety of a larger agency and ironically a belief that the large agency can save them money by offering a more holistic set of services. I say ironically because smaller agencies typically have lower cost structures and big agencies don't typically do a good job of integrating, so these savings are often mythical.

What I would urge agencies to do, if they haven't already, is to provide their clients with reasons why PR budgets should be protected during a downturn. If you simply scour the web you will find work such as that done by P&G to measure PR against other disciplines. This work clearly shows the value of PR and why there is a strong link between the sales and brand value of a business AND the PR the company does. I guess my point here is that if we don't proactively arm our clients with data that really does show why PR should continue to be a priority for businesses facing a downturn then we shouldn't complain when the budget gets axed.

Why doing PR in a recession is more difficult and what you can do to help

Here are some quick observations and recommendations. If people have others please comment and I’ll update the entry.

1. Clients are more careful with their marketing spend, which means they are both more cautious in the risks they are prepared to take and less willing to spend on potentially expensive ideas even if the long term returns are worth it. Recommendations: Think carefully about the ideas you are giving to your clients and about the way these ideas are presented. In difficult times clients want to feel that approaches are going to work and are therefore less worried about ideas being new or innovative.

2. Clients become even more focused on the current quarter and results that will impact their bottom line. This is understandable but all the best practice studies show that the brands that remain committees to long term goals tend to do the better than those who simply worry about the current market. Recommendations: Understand the sales process and sales cycle of your client’s business and marry programs to that cycle. This is a god discipline in any environment but in a downturn it becomes vital.

3. Competitors typically have more opportunities to highlight a client’s deficiencies as typically companies in a recession are struggling to be successful and are therefore losing customers, letting staff go etc. Recommendations: When competitors highlight your client’s short comings talk about the strategies that your client is using and the success it is having. However, don’t overstate the situation and don’t keep repeating the bad news that is at the heart of the issue as this will only reinforce the point your competitor has highlighted.

4. During tough times it is tempting to say as little as possible on the basis that the media are likely to make a bad story out of anything your client does. Indeed it is all too common for companies to try and hide during recessions and then reappear when they finally have good news to tell. Recommendations: Don’t let your clients go completely silent. They must maintain an active dialog with the media to ensure a trusted relationship continues. The same goes for the blogosphere. When companies hide they make themselves an even bigger target.

5. In a downturn PR departments can sometimes see PR agencies as the competition. By that I mean that they fear that with budgets likely to be reduced they either need to cut the agency fees or risk losing their jobs. This is understandable but clearly unhealthy. Recommendations: Instead of spending hours trying to justify your existence, talk openly with your clients about the roles each party is going to play and the metrics upon which you will be measured. Ultimately you may still be a victim but professionalism goes a long way and will serve you well once a downturn has ended.

Why hire freezes don't really work

I've noticed a few agency groups talking about hire freezes in recent weeks. Some have even gone as far as saying that they've frozen all pay reviews and promotions. I completely understand why they've done this as I know how important it is to make sure your staff costs don't get ahead of revenue in what looks likely to be a tough market. But these blanket approaches have a flaw in my mind. They essentially penalize the good people in an agency and potentially protect the weak. As we learned when the dot com bubble burst the good people in a firm are still in demand, though typically from clients looking to hire internally. If they do walk because you can't reward them or hire good people to support them then that leaves you with the potential to have an agency full of OK people and you know what that is likely to do - mean clients start to walk. This in turn creates a vicious circle which sees the agency gradually starting to die.

I wouldn't want you to get the idea that in times like this agencies should ignore the financial realities of life. Instead I'd argue that they pay greater attention to their talent and make sure the stars are well managed and appropriately rewarded and supported. Of course this may result in weaker talent being forced out more rapidly than in good times. On this I would say that creating a really strong team is something that should really be done in any climate. It's just that in tougher times it's easier to see its importance and it's more obvious when you fail to run the business in this way.

So I guess my message to all the really the good PR people out there who are frustrated by the hiring freezes imposed upon you, then please feel free to talk to any of our businesses. We will always do our best to hire even when times are hard. Having great talent with fresh thinking is a great asset to agencies and is what keeps them competitive.

Perfect Storm

Anyone trying to sell or buy a PR business right now is likely in for a tough time. The credit crunch, sagging share prices and a looming recession are all combining to make it harder than ever to get a deal done.

Let me take each of these factors in turn and explain my rationale:

1. Credit crunch - this is perhaps the most obvious problem in getting deals done. Asking banks for any loan right now is a challenge. Of course they will lend money but the real interest rates being asked have increased and the general terms of acquisition finance are a lot worse than they were six months ago. Add to this the fact that most public companies are trying to de-leverage their balance sheets and you have a situation where using debt to buy agencies has become less than desirable.

2. Sagging share prices - Public companies can usually raise money by issuing new shares to investors. Right now placing any new stock is difficult (if not impossible) and that stock will be placed at a very low price. This means they will have to issue many more shares than they would a few months ago to raise a similar amount of money. In short raising money for deals is both difficult and not terribly desirable right now. On the seller side, advisors will struggle to encourage their clients to take stock instead of cash for fear that current share prices will fall even further. Ironically they would likely be well advised to take this paper as stock prices are unlikely to remain at their current unrealistic lows forever.

3. A looming recession - conventional wisdom says that the best time to sell a firm and indeed buy a firm is when the economy is relatively predictable and moving up rather than down. This is because there is a greater chance a company will make its forecasts. In most cases if a company doesn’t make its forecasts then the people involved get a lower earnout which is clearly not good for them. However, the acquiring company is also buying a less valuable asset than it thought and that asset will deliver lower earnings. If the earnings of the acquired company are less impressive than that of the buyer then you end up with the buyer taking an earnings hit which in turns drive down their share price. In short nobody wins.

Of course some deals will get done and some of them will turn out to be good deals as not every PR agency does badly in a recession. Equally, there are firms like ours that have relatively strong balance sheets that can always accommodate the right deal. That said what is very likely is that much like the housing market right now, the majority of deals that will be done will be where people have to sell. We saw this in the last downturn and in that instance some excellent business that had some solvable but serious structural problems such as high cost office leases, or cash flow problems try and hold out for prices they would only see in the good times or simply wait too long before trying to find a buyer. Those businesses disappeared and the owners lost all the value they’d created. Others took what they could get. While these people may always wish they’d managed to deal with the downturn better they did at least get something.

These are interesting times for the agency world and its unlikely the current environment is going to change any time soon. So if your business is getting into difficulties you really should work to find a buyer now before its too late. A new buyer may well be able to solve the problems dragging the business down. Equally, if you or your management team is staring at the looming recession and thinking “I’m not sure if we have the energy to go through this again,” then you should also try and find an exit sooner rather than later. But if you have the energy and no real need to sell then don’t. Better times will come and you are likely to get a better deal. That said that requires patience and a great deal of confidence that you can keep the team you have now together through whatever is in store thanks to this wonderful new economy.

The reprice debate will be next

As stock prices drop, tech firms who for years have relied on stock plans to keep top talent will be forced to look at repricing stock options given to employees. Wall Street hates this practice but the reality is that most of the major tech companies (like most other major companies) have seen stock prices hammered. For example Cisco is down 45%, Microsoft is off 38% and Google has lost 54%. These are actually some of the better performing stocks. There are stocks like VM Ware that are down over 80%. Pu another way an employee that joined Google two years ago and was given stock at a $500 a share vesting price is now considerably underwater when only month ago they were in good shape. To make matters worse these staff will have paid taxes on these stock grants that are now worthless. Of course keeping people in this kind of market is easier than it would normally be but the market will improve at some point and when it does many companies will have lost a key long term incentive with which to keep people if they don't look at repricing their stock grants to reflect the new reality of stock prices. Will the bad news ever end?

Should anyone be launching anything this week?

Given the media is fully engaged either by the financial market meltdown or the US election (in this country at least), it could be argued that anyone planning to launch a new product or make any other significant news announcement right now, should look at waiting until things get a little calmer. Of course that's hard to do when you have sales teams wanting the new product to sell and or a channel doing the same. My thesis is that right now is a time when people are struggling to even pick up a newspaper or magazine given all the negative articles inside. Indeed I'd hazard a guess that at times like this circulations may well stay high but readership beyond the lead stories will be dropping like a stone. Of course this does make it a good time for companies to shovel out any bad news they have. For one it will get largely lost amongst all the other noise. It will also be measured against some of the unbelievably bad news that the banks are dishing out on a daily basis, which by default makes it not so bad. We live in interesting times.

Microsoft, Dell and HP lag while Apple again tops the chart in tech PR

In my recent poll asking who does the worst PR Microsoft got the most votes, closely followed by Dell and HP. Google and IBM fared well but as with my poll on who does the best PR, Apple came out top by receiving no votes. I think this reflects the feeling by many practitioners that Microsoft is something of a PR machine and that it is struggling to throw off its image as a lagging tech brand when compared with the likes of Apple and Google. Equally the HP brand has lost much of its charm now that Mark Hurd (its CEO) has shown that his mantra is all about driving the finances of the business and less about making HP a leader. Dell meanwhile continues to struggle to find a meaningful niche beyond being a place people buy cheap PCs and servers. In short I think the poll reflects the fact that people admire large successful brands BUT they want a certain visible level of positive leadership. This is where Apple and Google clearly score well. Put another way, the measure of who does the worst PR is really no different to who does the best.

The rise and fall of Sarah Palin

A few weeks ago Sarah Palin seemed like the ideal VP pick for the republicans. Her straight talk, family values and relative youth gave McCain an apparent answer to many of the weaknesses the democrats were touting. Then came the PR gaffes. In the weeks since she was unveiled she has made a string of mistakes and has essentially been withdrawn from the public eye. indeed NPR did a piece this morning questioning both her withdrawal and the few ways she was still getting in front of the media. Her interview, which was satirized on SNL, with Katie Couric was an absolute disaster. Indeed SNL added a few jokes but left many answers unchanged - it was that bad. You can't help but question, as NPR did this morning, why her advisors have chosen to shut her off from the short interviews that would normally be taking place at this stage in the campaign and then allow the longer interviews like the one with Couric where she struggles. Right now it would appear that she has gone from Republican saviour to pariah in just a few weeks. She could be saved if she does a good VP debate but I doubt it. She is not making any solo public appearances or attending fund raisers. Presumably she is using the time to prep for that debate. If she comes out of the debate badly she will have put a large hole in the republican campaign. It goes to show that in politics, as in business, a good presenter (which Paln is) goes only so far. You have to be a good interview. This means you have to do more than learn your lines. You also have to understand the subject matter and know the facts. On the latter it would seem someone should have given her a mock press interview before she was nominated.

Best Global Brands

I'm not a huge fan of the Interbrand global study as its methodology means many large private companies get left out but it is nevertheless useful. This year's study shows that Tech brands continue to play an increasingly important role, while not surprisingly financial services brands are struggling. Indeed a quarter of the world's top 100 brands are now tech brands, while only 13 are financial services. While the vast majority of tech brands maintained or improved their ranking, all but two of the financial services brands saw their rankings fall. I'd love to see how much each of the brands in this ranking spent on PR and advertising!

Who does it worst?

I have a theory that people don't remember the average but instead recall the very good and the very bad. This means that a great deal of marketing work is often not remembered as it is not best in class. This doesn't mean it has no value but it does reduce its value. Of course marketing departments don't aim to be average. Instead they aim to do stand out work. So why is most work so average? If I look at the programs I have worked on that were just OK (and there were a few), then in many cases it boiled down to a few simple things:

1. Dummed down - all too often a great creative idea has the edge taken out of it in order to reduce the potential risks that idea creates. Sadly by removing the edge it becomes a less then memorable campaign.

2. Under resourced - I don't just mean here that companies spend too little. Instead I mean that all to often great work is sandwiched in alongside large pieces of average work being done by the same company. If the resources of the average were reapplied to the great just imagine the difference it would make.

3. Trying to do too much - good campaigns will often be hijacked by all sorts of areas of a business. As a result the original focus of the campaign is lost. If other parts of a business want to jump on board a marketing campaign it is them that should adapt (within reason) and not the other way around.

4. Failure to learn from mistakes - too many companies ignore the mistakes they've made in the past. Even companies that bother to hold a post mortem after a campaign, will all to often ignore the lessons learned when creating a new campaign. Why?

5. Logic beats emotion - great marketing campaigns often have something that is illogical in the mix. Or at least an element that appears illogical or pointless. Take the recent Microsoft ads with Gates and Seinfeld. They are quirky and silly and have generated a lot of opinion both good and bad. Logic would have killed these ads a lot sooner than Microsoft did (apparently they are no more now). If they had made Seinfeld talk product features it is unlikely people would have talked about them. By avoiding talking about Microsoft for almost all of the advert and instead focusing on trying to connect with an audience, Microsoft made an honest attempt to connect with its audience. You can argue whether they succeeded or failed in this instance. To me they succeeded.

My concern with this issue is that I'd love to see more memorable PR work being done. As it stands I'm convinced people can easily recall bad PR and can recall, albeit to a lesser degree, great PR. That leaves a lot of work that probably penetrates the subconscious or affects a small community but goes largely unnoticed. Perhaps the best way to get people to do great PR though is to make them fear doing truly bad PR (See my poll on the right). Put another way, I think people should always ask "what do we need to do to do a better job this time?" They need to ask this at every step in the process.

Gates does good

I have to confess I thought the idea of using Seinfeld for Microsoft ads seemed a little less than exciting. I felt Seinfeld represented the wrong generation. Now that I've watched the ads I'm a convert. They are great entertainment and remarkably brave. They don't sell a product or promote an area of technology. They entertain and get you to connect with the brand. If you haven't seen the ads go to: http://www.youtube.com/watch?v=gBWPf1BWtkw

What is also clear from these ads is that were produced not for TV but for the Internet. The one I linked to above is perfect for YouTube. This is a great example of a brand taking advantage of a medium to do something different.

Dems give Palin all the room she needs

Earlier this week Obama made it clear that Republican VP nominee Sarah Palin should not be attacked because of her daughter's pregnancy. His VP nominee, Joe Biden, also backed this up in a move that was clearly designed to show the Democrats were above that kind of thing. However, what they failed to anticipate was how strongly she would attack them and that she may even damage them through these attacks. What the Democrats now have to struggle with is how to fight back at Palin. She is standing there throwing punches while the Democrats have effectively tied their own hands behind their backs. Of course they could just fight back but the risk is that they will be seen to be attacking an injured party. By saying people shouldn't attack her for the pregnancy issue they effectively said nobody should attack her - period. On reflection they should simply have said nothing and let the Palin news play out. Then they could have attacked her with at least equal force. As I see it they have lost round one in a big way and they'd better quickly figure out how to deal with Palin or she could do some serious damage.

For the record I am a registered Democrat

POV

No, I'm not talking about Point of View, I'm talking about Post Olympic Viewing. As Michael Phelps and Usain Bolt get their medals through airport security, the rest of us are getting used to life without the Olympics. NBC has returned to showing crappy game shows. Newspapers here in the US are relieved that the Democratic National Convention is in full swing. Though, let's face it, it's hard to switch from pure entertainment to speeches urging us to solve the world's problems. What the lack of Olympics shows is:

1. How good these Olympics were. Whatever your views on China and its human rights records you have to admit they put on a stunning event and one that will be almost impossible to follow.

2. The end of the Olympics has created a vacuum into which a smart company or politician would launch themselves. However, it needs to be someone or something very smart. Anything average will be viewed as either blatant publicity seeking or perhaps even worse be ignored altogether. On that basis Obama would appear to have a great opportunity.

Apple does the best PR

OK, so my little survey is far from statistically accurate but when asked: "who does the best PR?" Apple got over half the votes. 55% to be precise. Indeed the rest (Dell, IBM, Cisco, Intel and Microsoft) were bunched pretty tightly with only a few votes separating them. Now these results could be interpreted several ways:

1. You could argue that Apple is doing a great job with its PR. I struggle to agree with that. I think they've launched a great product that is getting tons of attention and their PR is therefore very visible. I wouldn't say they have done bad PR but I equally wouldn't say it has been great.

2. You could argue that this quick poll shows that people don't really differentiate PR form other marketing forms. In other words the brands doing the most marketing get noticed the most whether it is through PR, advertising, sponsorship etc. Sadly I think there is some truth to this. Even PR people (who voted on this) judge these things at a very superficial level.

3. It could be that this poll doesn't reflect who has done great PR but rather who has received the least negative PR. I firmly believe that we are in an era where people are more aware of negative PR than they are of positive PR. Indeed I've seen research for a client that proved this point. If this applies here it would suggest that Apple has received almost no bad PR in recent weeks. Aside form the concerns about Jobs health that surfaced I'd say that was true. Indeed given the potential for poor reviews of the iPhone thanks to its horrid battery life it could be argued they have very skillfully avoided bad press. Put another way, do a quick test and ask yourself what news you remember around any of the big companies right now. I can almost guarantee you can recall more negatives than positives.

In reality, the answer lies in a mix of all of the above. That sounds like a cop out I know but I think it is true. Apple has maximized the opportunities you get when you have a great consumer product (I think the iPhone is spectacular apart from its battery life issue). I also think it has managed to avoid bad press and commentary and instead get people focused on tips and tricks to solve the poor battery life issue (if you don't believe me here just go online and see how many people have put up blog entries with ways to save your iPhone from dying). I also believe that this shows that when a company gets its overall marketing to be tightly integrated then people pay attention.

Phelps beats most of the world

I was just reading the Live Text coverage of the Olympics on BBC.co.uk (which incidentally is a great read of you like British humor). Someone made the point that if Phelps were a country he would be fourth in the overall medal table. That puts one person ahead of almost all the developed nations in the world. Some of the world's smaller nations will no doubt start scouting their local swimming pools looking for their own Phelps.

BBC will text you a reminder to watch Phelps win again

The BBC has introduced a clever system to help boost its Olympics ratings. It seems (potential) viewers can sign up to get a couple of text messages a day reminding them that a certain event is about to be shown on TV (such as Phelps going for another gold medal). You could see this idea being applied to a whole range of things. For example radio stations could text you to tune in when a certain song is about to be played. Equally, your favorite sports team could send you a text message when they score and provide information on where you can watch or listen to the game. Businesses could text you when a certain item goes on sale. The list is really quite endless and I wonder if there isn't a business here for someone to create a site called 'Reach Me'. On the site you would sign up for things that you would like to get messages about. I'd suggest that this site go beyond text messages and use a range of other ways to get hold of you. As I say the list could be anything from sports news to product availability. There are some technologies that touch on this space from people like Varolii but they seem to focus more on the company selling than the person who is receiving or buying.

NBC's 'Live Coverage' of the Olympics isn't that.. Live

NBC reportedly paid a $1 Billion for the rights to show the Olympics in the US. I guess when you have paid that much you don't want people to feel like they are watching a re-run and instead want them to feel they are watching it as it happens. Sadly, given the time difference with Beijing, this means many of the events would drop out of prime time if shown live. NBC's answer is to say the event is live, as they did with Phelps 200m butterfly event, even though the event happened hours ago and you can easily find out who won by surfing the web. Indeed by the time Phelps dived into the pool for the 200m race on NBC, he was already warming up for his next race, a team relay (which he also won). Given how good the NBC.com coverage of the Olympics is, I know they are web savvy. So why don't they just admit that their coverage isn't really live or at the very least not try and pretend it is? As it is I now find myself checking bbc.co.uk in the evenings to see the results of things that NBC keeps saying is 'coming up live in the next hour.' Come on NBC. In a world where people use the Internet as much as they do their TV you really need a better solution than to try and pretend your coverage is live.

Thinventory

Welcome to the era of what I'd like to call 'Thinventory.' This is an era where retailers are so scared that the economy is going to leave them with unsold products on their hands that they would rather carry too little stock than too much. It is also the era where even hot products like the iPhone are deliberately understocked. It is of course the smart way to run a retail business - match inventory to demand. For the shopper it is frustrating when they are using traditional retail outlets but almost invisible when they are shopping online. The smart retail operations are the ones that can blend this online shopping with the traditional environment and have the product you want shipped to your home overnight. This problem is particularly troublesome for sellers of say shoes and clothes, where the same product comes in multiple sizes. Carrying enough of every size is expensive and risky but if they can provide a thin level of inventory in each store and then hold a further amount at a central store to either replenish store stocks or service customers online they will likely do better than having every store hold all the stock.

Pandora rocks

I only just came across Pandora, a web site that essentially allows you to create your own radio stations. You input the name of an artist or song that you like. It plays an appropriate track and then follows it with other similar music. If you don't like a track you can skip to the next (it only allows six tracks to be skipped per hour). If you really like a track you can bookmark it and of course buy it on iTunes with one click. Pandora is of course perfect for the iPhone, except for the fact that it drains the pathetic battery this device houses. If like me you hadn't heard of this site, you should try it. I was instantly puzzled how they are dealing with the royalty issues, to which Sean Garrett at 463 immediately said they are in DC dealing with that very issue right now... Hopefully they will be allowed to continue to offer the service.

Supply and Demand Economics

It would seem that supply and demand economics rule. For years the valuation of commodities have been driven by this, while the valuation of companies have clung to various guiding metrics such as PE ratios or multiples of EBITDA. All this seems to have changed as the stock markets around the world essentially ignore all multiples and focus instead on whether there is actually someone willing to buy a company's stock. Classically it has been quite normal for businesses to to have PE ratios of between 10 and 20 and yet right now there are hundreds of companies with PE ratios of 5 and below. Many of these companies are small cap stocks which investors fear because of their liquidity. Ironically though many of these businesses are better run than large companies because a) the managers have some meaningful stock interest in the business and b) because these same managers are closer to the real customers and therefore simply run their businesses better.

Sadly for small business owners this shift to supply and demand valuations is unlikely to change anytime soon. This has broader implications than simply unrealistically low share prices for businesses. The ability of many companies to carry out acquisitions is tied to their valuations. When they are highly valued, companies can use paper (stock) as a means of buying other companies, either by issuing stock to the shareholders of the company they want to buy, or by getting investors to buy a new issue of equity, the proceeds of which can then be used for the acquisition. When stock prices plummet so do the possibilities for these companies to do any buying. As a result, the supply and demand economics then starts to impact the value of private companies. In the PR world there were quite a number of deals done last year based on high multiples. These prices would simply not get paid today unless there ended up being an auction. I therefore confidently predict that the market for acquisitions will become very quiet in the next year. This isn't because there aren't companies for sale or companies looking to buy. It is simply because until the valuations of public companies start to rise, a key currency (new shares) will not be available for purchases. At the same time, the better companies will likely defer sales until conditions improve.

Of course companies can still be bought for cash. Here again there is a problem. The global credit crunch has made it harder for companies to raise debt. At the same time, shareholders who, in good times, encouraged businesses to gear up are now demanding that debt be paid down. As a result, companies are hanging on to cash or ignoring the potential of their banking facilities, thus again taking a currency (a very real one) off the table for acquisitions.

You could describe this as the perfect storm for small companies looking to do deals. I would suggest that this storm may be with us for while. Then again I'm British so I'm used to bad weather.

The arguments for social media

Marta Kagen has put up a pretty compelling presentation with facts and arguments to support the rise of social media. It is well put together and visually very attractive. There are no really new facts in here but it is good to have a presentation that brings everything to one place. Marta takes a poke at advertising but pretty much avoids traditional print media. I'd love to see her put this presentation up as a wiki and make it something others can add to over time.

PR for dummies?

Nicholas Carr who has in the past questioned with some success the value of technology, has again scored a bit of a stir, this time by exploring the impact the Internet is having on the way we think and our ability to concentrate. His article “Is the Internet making us stupid?” is published in Atlantic Magazine. The article uses a mix of anecdotes and new research on the topic and makes a good case. In essence he argues that our brains are adapting to the way the Internet serves up information, making us less interested in long articles and books. His point was well made when I noticed I was skimming through the article…

If we assume Carr is correct, then his point has some important implications for those of us involved with managing perceptions of companies, organizations and individuals. At its simplest level it reinforces the view that information needs to be disseminated in bite size chunks. People will no longer read two page news stories and sadly they will no longer read two page news analyses. Instead they want their information one paragraph at a time. This brings in to question the most basic of PR tools, the press release. The press release has been questioned in recent years. Carr’s article potentially buries the notion of a long press release and calls on companies to create one paragraph news announcements that in turn link to other documents that provide the extended detail.

If you follow this ‘bite sizing’ of communication to its logical conclusion with other PR tools you soon start to see a very different world. What you realize is that companies will soon avoid trying to communicate anything complex and instead find ways of breaking the information down into a series of announcements that people can absorb. Indeed, some companies may find themselves saying remarkably little and instead focusing on get snippets of bad news about their competitors on the Internet.

Aside from testing the ability of PR people to tell stories in seconds rather than minutes, we are also being challenged to create ways for people to get their information that are more rewarding. The very act of web surfing has become tiresome. High speed internet connections, coupled with great search tools mean we get our information on demand. Put another way, there are fewer and fewer gaps between information, giving us less time to think and make sense of the content. The companies that can somehow reverse this trend and allow us time to really absorb information, rather than have it wash over us, will ultimately win. To do this we need to think not simply about the content but also the tools we use to get information across. This is something the advertising industry has already been working on for decades. Indeed they are masters of dealing with short attention spans. I would therefore encourage all PROs to take a long look at the tools this industry uses and see if there are ways PR can be adapted to a SASW (short attention span world). I’d give you some of my own thoughts but I suspect most of you have stopped reading by now and have moved on to another blog…

iPhone - what price the hype?

Trying to buy an iPhone in Silicon Valley means calling around to find out which Apple stores have them and then going and standing in line. Oh and before you try it, the Apple Store on the Apple campus doesn't actually sell iPhones (I struggle with the logic of that). This approach to selling products is not terribly customer friendly. If they simply wanted to sell as many as they could they would sell the phone online and then allow you to visit an AT&T store to get it activated. Of course they don't sell them online, as again this would be a tad customer friendly which Apple tends not to be. Instead, Apple values hype and the prestige that a mix of product shortage and funky distribution brings. At one level this is terribly smart. By making it hard to get, the have made the iPhone even more desirable. Yet once again it shows how a brand can get caught up with being 'cool' rather than customer centric. Apple could create a system that keeps you informed on shipments and lets you pre-order like they did when the iPod came out but they have decided not to do that this time. In essence they are saying we want queues of people outside our stores and we don't care if this is annoying for people. What is more they have made PR mileage out of this by having camera crews interviewing those waiting in line.

Of course I fully expect that Apple will find people to be very patient and very few customers will give up and buy a Samsung or Palm product instead but I do question the logic here in terms of the long term customer relationships. By making the customer suffer to get their products in ways that could be avoided they are weakening the bond with those customers. That will mean that when someone does come out with an iPhone beater (which admittedly no one has yet but I am sure they will) then Apple will find a whole group of people ready and willing to jump to that brand.

I should note that I love the iPhone. I loved the first iteration and I love this version even more. I have some minor gripes with the keyboard and with the fact that you can't sort emails by sender but the other functions of this device are so impressive that I can live with these draw backs. Guess I'd better call the Apple store and see how long the line is.

The service factor just became a whole lot more important

As the economy continues to struggle forward I was reminded today on two occasions how easy it is for a company to lose customers through poor service. The first came when a technician came to 'fix' our washing machine at home which is all of six months old. He left after an hour saying he needed a part to be shipped and would return in 10 days!!! Now he could have handled this well but he laughed when asked if he could perhaps come back sooner given we have three young kids and rather need a machine. So lesson one here was don't buy a Whirlpool Duet washing machine and expect it to last and lesson number two was you can expect lousy service when it does break.

My second encounter with poor service was with WalMart. I want to buy my son a Star Wars chess set. Searching online I noticed WalMart has them in 'Limited stores' but not online (odd I know). I called our local store with the WalMart product number in hand. First they put me through to Toys where the first person I talked to had no clue what I was talking about. The second person said I needed to talk to customer service and that he'd put me through. After three rings the line went dead and I was cut off... I called back and asked for customer service. This time the lady asked me for the product number (she actually did this twice) and then put me on hold for twenty minutes, after which I hung up and gave up. My son will have to wait I decided.

In both cases I could have come away feeling people were doing their best and I would have been OK with the outcome. Yet in both cases I encountered people that never once put themselves in the shoes of the customer. Doing this in times when the economy is doing well isn't good but you may survive. Doing this when times are tough is asking for trouble. Customers will walk away and never come back. For PROs this is something to consider. You will quite often be dealing with less than good news in the next year BUT you can make the experience of dealing with that news a whole lot better if you for a moment put yourself in the shoes of the person you are dealing with and imagine how they may react. Think customer service.

America - a developing nation?

Silicon Valley is an odd part of America. For a start most of the people you tend to meet are transplants from either some other corner of the world or some other part of America. So when you live here you tend to get distorted view of what America is really like. I recently got a good chance to observe 'real' America. Not by visiting another part of it but by leaving it for a while. In the last month I did a trip to Europe and witnessed first hand how the Europeans view America. I think it would be fair to say that America is no longer viewed the way it was when I lived there. America used to be a super power with money to throw at any problem. America used to be a place where everyone had a great standard of living. America used to have people that travelled to Europe for a vacation. Instead, America is a place where the banking industry is in turmoil and the economy is 'challenged.' It is the place where people have suddenly realized that SUVs are a dumb idea for most average motorists. It is a place where tourists now go carrying an extra suitcase so they can restock their wardrobes at a fraction of the cost they would at home. Put simply America has become a place that is cheap to visit and yet has pretty impressive infrastructure. Indeed America is perhaps the first highly sophisticated third world country in the eyes of many. It seems hard to imagine that America has become this in such a short space of time. Ten years ago, the economy here was flying and Wall Street was in charge. Today Wall Street is in hiding and the economy is hardly firing on all cylinders. Indeed if it weren't for the weak dollar then the US economy would likely be in a recession of some magnitude. As it is it is prompting people to buy product and services from here as if this were China or India. Only yesterday VW announced it is to open a manufacturing plant in Tennessee. It did this it was said, because of the weak dollar. All I can say is that they obviously assume America is set to have a weak dollar for some time to come as they are spending $1 Billion on this plant. So I return to my observation that America is perhaps becoming a new class of country. It is clearly 'developed' and yet thanks to a weak dollar is now competing for jobs and contracts shoulder to shoulder with the developing nations. Ten years ago, such a thought would have been impossible to imagine.

Big Oil's problem

For years when you listened to the news it would say Wall Street was up or down based on the performance of one or two big companies, or some new economic statistic such as inflation or employment. Right now the driver of Wall Street is the price of oil. As oil prices rise the market declines - even if Apple releases a new product! As someone who worries a great deal about climate issues, I'm conflicted on the oil issue. The dramatic rise in the price of oil is forcing people and businesses to change their habits which I see as a good thing. Indeed, it makes me wonder why some changes didn't happen sooner. For example I gather airlines which are feeling the pain of the rise in oil prices are taking all manner of steps to make their aircraft lighter - such as only filling the water in the bathrooms of their planes half full. The logic being that most planes land with at least half a tank of water and flying that weight of water around doesn't make sense.

The other side of the problem is that the rising cost of oil is hurting some businesses that can do little in the short term to reduce their pain. It is also hurting the consumer through rising food costs. For those on low or fixed incomes this is real pain. Now of course the oil companies coud agree to increase production to ease the supply and demand problem. This may result in a significant cut in the price of oil, especially since consumers and corporate behaviors are likely to remain as they are now. However, given we are dealing with oil, a product that is difficult, dangerous and expensive to extract - and which has a finite supply, there is really little incentive for them to do this. Big oil knows that in 50 years it will likely be out of business as we all move to alternative sources of energy. If they increase supply that 50 years may be reduced to 40 giving them even less time to re-invent themselves. In other words, I can see little incentive for Big Oil to change its current approach to supplying oil. To my mind, this current pain from rising oil prices will not go away any time soon. Therefore I would rather see governments focus on longer term solutions to this. I would encourage the oil businesses to invest in new forms of energy and even give them tax breaks for doing so. The sooner we can make the switch the better and if we know one thing about Big Oil it is that it is addicted to money.

HP deals with EDS

HP's announcement that is buying EDS has been received poorly by the markets. HP's stock is off 6% while IBM, the company who should be hurt by such a deal, has seen its stock rise. Many of the issues people have raised relate to the poor cultural fit plus the relatively poor margins and growth EDS has been generating in recent years. HP in return is arguing that EDS creates a platform for them to grow large parts of their existing business - an argument the market clearly isn't buying. To me this deal says more about Mark Hurd than it does about anything else. It is hard to argue that he has done a poor job since taking over the helm at HP. The business is stronger by almost every measure. I think he sees EDS as a business he can work similar magic on. I'm pretty sure he sees opportunities to improve the margins as he has at HP and get growth by selling in to his installed HP base. In other words, having done a pretty good job of turning HP around, he now needs something new to challenge him and his team. EDS could well prove a very smart deal. His board has to hope that while he focuses on EDS, someone else is paying equal attention to HP, because you can be certain that the likes of IBM and Sun will see this as a great chance to go after HP's customers.

Apple TV and YouTube challenge the norm

Years ago I sat in while a journalist interviewed Bill Gates. A PC was on the desk with Windows running. In most of the windows there were Microsoft applications but in one there was a TV show. I was spell bound. It was like I was watching TV for the first time. My awe struck state came crashing to earth moments later when Bill said: "We've finally been able to turn a $3000 machine into a $200 TV set." His point was clear. Who really needed to have a window on their computer that could show TV channels when in most homes there was already a device that did it much better at a much lower price.

This of course was before the Internet took off and people decided they liked to spend a good portion of their previously allocated TV time surfing the Internet. Web based TV has been very slow in coming but thanks to YouTube efforts to bridge the gap between web surfer and TV watcher seem to be gaining pace. Enter the latest version of Apple TV which, along with all your iTunes and iPhoto content, has a YouTube option that allows you to search and select your favorite content. In effect this turns YouTube into another channel on your TV. Right now most of the content on YouTube is pretty grainy making it a poor relation in the channel stakes. My guess is that this will change. But it also occurs to me that if Apple can effectively turn YouTube into a TV channel, couldn't they also become a natural home for a host of other channels? I'm pretty sure someone could come up with an Internet alternative TV network. One that uses the functionality of the web as well as its obvious distribution benefits. How long before there is an Apple TV Guide?

Missed Opportunity for the BBC

The BBC recently overhauled its website. The sites looks a great deal better and has maintained its interactive nature with visitors able to send in comments on many of the stories. However, I can't help feeling it is an opportunity missed to do something really bold and unusual. For example I'd love it if they'd taken a leaf out of YouTube's book and made it so that when you clicked on a news item, it then automatically made additional suggestions. I'd also appreciate it becoming a truly customizable site. Right now you can customise the home page to some degree, but compared to sites like my.yahoo.com it is... weak. I'd also like to see them accept ratings from users on their content AND to admit to how many people are reading each story in same way as YouTube tracks the number of people that have viewed a clip. In other words I'm saying that I feel the BBC could have used the best features of a number of sites to upgrade its site. I would also LOVED to have seem them embrace blog or even rival content more. For example, they could have created links to host of additional sites for news and perspective. Of course that would have created a lot of work for them BUT it may have resulted in the BBC becoming a wonderful homepage. And let's face it, even in a world where we all use the Internet in a far more sophisticate way than we did even a year ago, we all still love our homepage.

e-petitions are they a resource for PR?

The UK equivalent of the White House, 10 Downing Street, has established an e-petition service enabling UK citizens to create petitions on pretty well anything. Currently over 7000 petitions are active and they cover a multitude of topics. It struck me that these petitions give a glimpse of the topics that are affecting a nation (which should be useful insight for consumer lead businesses). They also potentially create a vehicle to put items on the public agenda far more quickly and cost effectively than would have been the case before the Internet arrived. Of course, scanning the petitions is a pretty manual effort right now but the government has done a pretty good job of breaking down petitions currently active into sections.

Wal-Mart video archive

The WSJ today reported that a small video production company that for years recorded internal meetings and events on Wal-Mart's behalf. Having been dumped by its main customer, it has now decided to offer up the content to anyone who wants to have access. Provided they pay of course. It's apparently a treasure trove for historians and lawyers suing the company. For example one lawyer has paid $15000 to secure copies of video clips on the chance they may be useful in future cases. Wal-Mart not surprisingly is unhappy about this and is considering legal action. The maker of the tapes started working with Wal-Mart in the 1970s and claims he had no contract meaning he owns the content. It made me wonder if this will cause firms to quickly review their contracts to check whether the notes taken by PR staff in meetings become their legal property. We all know that clients tell PR staff information they need to do their jobs that they wouldn't like to see in places like the WSJ. If there is no contract or the contract is poorly written, who knows where that information will end up in time.

The Ms

For those seeking some light relief from the economy, here's a thought: The 20th Century was the era of innovation. we invented things like we've never done before. Machines of all manner were dremed up, we put men on the moon and we created cures for killer diseases. We also coined names for most of the decades that fitted in this period. We started with the roaring 20's and raced through every succeeding decade to the 90s. Indeed when someone says the 70s today we know they mean the 1970s. These descriptors have been huge for people marketing products. Indeed entire industries have evolved around these decades. This leaves us with a challenge as we start to roll through the 21st century. It simply doesn't work to say the twenty tens, or the twenty seventies for that matter. Any suggestions on this are welcome. Perhaps the naming of the decades and the celebration of them from a marketing perspective will forever be a 20th Century matter. Perhaps someone will coin a new way of branding the decades - The M20s? I know, it's not very good is it?

Bear Market for Bear Stearns

For $234m JP Morgan has bought a bank, Bear Stearns, that was worth $20 billion last year. Either they have got the bargain of the century or Bear Stearns has the equivalent of a football team's worth of rogue traders. It is more likely they have bought this on the cheap, given the support the Fed has also agreed to give, making it a great symbol of how the banking sector is capable of making money even when times are hard.

What I find striking about this deal is that it reminds us how the banking business is built on confidence and how easily that confidence can be destroyed. I'm sure there are some real problems with the Bear Stearns business but I'm also sure there are many assets (not least their real estate in NY) that are worth considerably more than the $2 a share JP Morgan is paying. I'm pretty sure the brains at JP Morgan will be able to clean up the Bear Stearns business, which then only leaves them with a confidence challenge. That is a classic PR challenge that in this instance is going to run right across their sector. It will be fascinating to see how they respond to this in the short term. As a sector they tend to be fierce competitors but if they want to maintain the confidence they need right now they are going to have to work well together and show the world they can weather this storm. It's classic crisis management stuff but for an industry as a whole not just Bear Stearns who at this point are the victim.

It's all the economy's fault

As news about a weak US economy continues to get posted, you can expect businesses to hide poor performance behind this economic curtain. In truth not all businesses that do poorly are suffering from a bad economy. Many are simply suffering from poor management and poor products. Of course if you dominate a market with huge market share then you will feel the effects of a shrinking market more than most in all likelihood. But most companies don't dominate. Most companies have a tiny share of the market. So even if the market is shrinking they could still grow by taking market share away from a competitor. To do that they will of course have to run a better company than the competitor. That may not be easy, especially in an uncertain economy but it's not impossible. So next time you hear a CEO blame the economic climate for worse than expected results you should ask yourself whether it really was the economy or was it that they made some bad calls?

What's Steve Jobs HPA?

In sports, averages and ratings are calculated for everything. Baseball is full of players stats such as RBIs and ERAs. In (American) football, quarterbacks have YPAs and in basketball there are stats on free throws and rebounds to name but a few. I was wondering today whether you could also create stats for business leaders. For example how many of the products Steve Jobs has unveiled in the last few years have gone on to be hits? Put another way, what's his Hits Per Announcement, or HPA, average? If such a score could be calculated it would probably show that Apple's CEO is scoring well. The logical conclusion being that he must be taking performance enhancing drugs and will likely face a grand jury some time in the next year or two, once they've finished with Barry Bonds.

The real economy needs to speak up

Last week WPP's CEO talked about the 'real economy' and how it's actually holding up quite well. The same day, IPG also put out some positive statements following good results. Indeed if you look at the business news in recent weeks there have been a string of relatively positive statements made, albeit with some caveats attached. The only sectors that have continued to spew out bad news have been banking, housing and the some parts of the auto industry. Even retail has seemed pretty robust which lead a Forbes columnist to pick Target as a stock worth buying now that its PE has dropped to around 16. All this suggests that there are two economies playing out right now. Unfortunately only one of them seems to be getting any attention. The 'real economy' as Sir Martin called it seems to get a passing mention, whereas the the mean, ugly one that the banks are wrapped up in seems to get a mountain of coverage. It sounds to me like the real economy needs some marketing support.

Why this recession will be different

There seems little doubt that the US economy is in some form of recession. Whether that recession is impacting all the states and all parts of the economy is another matter. The auto industry seems to be getting hit while tech remains relatively strong. Perhaps that has something to do with the fact that modern cars will last decades, whereas computers still seem to need replacing every three or four years. Anyway, that's a whole other subject.

What I've been giving thought to is how this period of economic change will differ from the time of the dot com crash. One item really stands out to me and that's stock options. When the dot com market was booming tech companies were giving staff relatively large amounts of stock and lower basic salaries. As a result when the crash happened staff were left with big tax bills on stock that wasn't worth anything and salaries that were artificially low. This made many employees nervous about accepting options as a form of compensation even in companies that had good prospects. Couple this with changes in accounting rules that made the idea of issuing stock options less attractive and you had a situation where companies have been forced to look at more traditional rewards. They have also had to sell people on the idea that the job they were offering would actually be worth taking.

So if we assume that the market does take a beating at stocks drop 15%, the impact on the economy could be quite different. Last time around, those with stock in public companies were trying to sell fast before their tax burdens grew too great. This time around the magnitudes are so different that the rush to sell shouldn't be as dramatic. Also, this time around people are earning higher basic salaries. This has two implications: 1. People are less dependent on stock for compensation so a bad day on the market won't mean as much 2. If companies need to trim costs they shouldn't need to lay as many people off in order to achieve the same cost saving.

As you can probably tell, I'm no economist but I do believe that the relative absence of stock options in the current economy could have a big bearing on how a recession plays out.

No news is bad news

Yahoo! may not want Microsoft to buy them but I suspect they are enjoying the attention the Microsoft offer has brought to the brand. For a while now Yahoo! has been struggling to regain the spotlight from Google. With Microsoft's offer they suddenly have that spotlight albeit for different reasons. I'm curious to see whether this attention translates into increased sales revenues - I suspect it could. If it does, the old saying that: "no news is bad news," may well prove correct.

btw - for those of you that track this blog, you may recall my YouTube measure. Since I last checked (which was back in December) Google's postings have increased from 169,000 to 192,000 (an increase of 13.6%), while Yahoo!'s have increased from 123,000 to 149,000 (an increase of 21%).

Creston spins out of a difficult US market

If you read the latest PR Week UK front page news that Creston has pulled out of the US you may have come to the conclusion that the US was a dangerous place for PR agencies to be right now and that firms such as ours and Huntsworth must be struggling. I’d like to refer back to our recent AGM update where we talked in positive terms about our business here in America and also refer people to Huntsworth’s update where they suggested they too were trading well.

The story inferred that large agencies are going to find it harder if a recession strikes (shocking news) but fails to make a coherent argument as to why – there only real suggestion is that in tough times people go to smaller less expensive firms. As an agency head that has worked through a recession or two I’ll tell you that in recessions clients get cautious, which means they tend to want to work with firms they know will still be there when a recession ends. Equally, better talent tends to also play it safe and opt for agencies that are likely to survive and that tends to be the bigger firms. So as you can see I’m not really following the logic of this news piece.

My next observation is that even having read the following paragraph several times I’m still not sure what it means: “Agencies under the umb¬rellas of mid-sized conglomerates such as Chime, Next Fifteen Group and Huntsworth, which are reliant on central costing, could now find their budgets under close scrutiny from clients, according to analysts.” What exactly is “central costing?” Do they mean that PR budgets are somehow managed centrally by big customers across the globe? If so I suggest they interview a few clients and they’ll soon learn that the vast majority of budgets are set market by market.

My last point is that I’m rather surprised PR Week didn’t contact the midsized holding companies they referred to for a perspective on this news. Perhaps if they had the Creston spin would have been exposed. My hat goes off to Creston though. Let's face it, they did manage to deflect some pretty bad news and suggest that they were now better placed than others to deal with the US. I just wonder who really bought that news.

Is there a link between Green and the economy?

Six months ago Green was everywhere in the media. Major companies were clamoring to be seen as the greenest business with Dell perhaps being one of the most ambitious in this regard. As economic uncertainty has increased Green appears to have slipped from the agenda. It is almost as if Green was a luxury companies and consumers could afford when times were good. Interestingly it has also failed to be a pillar of any of the Presidential nominee campaigns. I find this rather disturbing but not that surprising. This does present a challenge for those of us that believe Green is more than just a convenient way of appealing to certain consumers. The answer, I believe, is in adapting the Green message to suit the market. Right now the message needs to be less about good citizenship and more about how Green can actually help companies be more efficient and reduce costs. For example, companies that adopt advanced video conferencing now in lieu of having staff flying back and forth will be doing the environment a favor but will also be saving huge amounts of staff time and thus increasing productivity. In other words Green needs to think like a business and listen to its customers. If it doesn't I fear it will take a back seat for a while to come.

Same destination, different route

It's easy to believe that when the economy changes, so does the mission of a business. The reason it's easy to believe is because it's at least partly true. If the economy changes, so does the economic opportunity... at least in the short term. However, I would argue that looking longer term the goals of a business should remain unchanged. This means if a business is aiming to lead or create a market it should still aim to do so. Of course its timescales may get modified but the destination shouldn't (Unless of course the economy wipes that market off the map!). So if the commercial objectives remain unchanged but the means of achieving them get modified, then I'd also argue that the communications objectives should remain while perhaps the strategies may be reviewed. So as the storm clouds around the US economy continue to build, I'd encourage communications professionals to remind their staff not to take their eye off the prize but instead to look again at the route they may take to get there.

People like good adverts and bad PR

If you search online for 'great' or 'best advertising' you'll find sites such as bestadsever.com and bestadsontv.com. If you search for great or best PR, you'll find very little. Indeed there isn't a site (yet) that collects all the great work done in this area of marketing. There are however a host of sites that collect all the bad work done. One being prdisasters.com. It just goes to show that people love to see talking babies, horses with flatulence and dancing lizards just as much as they like to see CEOs stumbling to handle the media when things go wrong. Maybe PR Week should start a Best PR site and each month upload their winners.

Borderless Communities and Flat Issues Build Global Brands

Global PR is nothing new, nor is the concept of a global economy. However, now for the first time we are seeing what a global economy really means and that in turn is changing PR thanks to what I’d call Flat Issues and borderless communities. In the past a global economy meant new business models and new markets for goods and services. Now it means common attitudes to brands and common fears about issues. Consumers around the developed world pay little attention to where their products are made but they do care about many of the same things. "Are these bananas organic?" "Is Microsoft evil?" "Should America leave Iraq?" Ten years ago I'd theorize that only a small percentage of the issues people cared about in one country were shared with people in another. Today I'd suggest that on any given day almost a third of the issues on people's minds are common across multiple markets.

Now this both poses a challenge and creates an opportunity for anyone trying to build brands. On one level brands need to worry about where input to issues will come from. For example a firm in Sunnyvale CA may well get berated online by someone in Frankfurt, Germany even though they don't officially do business in that country. On the other hand, a brand that is having a tough time in one country may turn to customers in another to help them shift perceptions. This idea isn't new but for the first time people may actually find it works thanks in large part to the rise of social networks/media. Social media offers the chance to break out of a country by country approach to influencing opinions and instead focus on communities with common interests. For brands wanting to take advantage of this they need to know where there is common ground (the flat issues) and understand the scope of a community. This means either doing some research or making an educated guess. I'd of course vote for the former.

So for anyone trying to build a global brand, I'd suggest they start by identifying both the communities that break borders and the flat issues that unite them. That's where the opportunity to take advantage of global markets really lies.

Google's stance is hard to swallow

Google is clearly scared that if Microsoft succeeds in buying Yahoo! it will lose it's dominance in the search/online ad sales business. So it is using the idea that if a deal gets done Microsoft will suddenly become the dominant email and instant messaging player as a way to get the deal called off by antri-trust lawyers. There are few things that make this a hard line to swallow:

1. Microsoft is already the dominant email supplier in the workplace thanks to Outlook. Indeed if you taker the email market as a whole I'm sure Microsoft is way ahead of any rival thanks to Hotmail so this doesn't really change things that much.
2. They are so obviously picking a fight that has nothing to do with the real... fight. The real battle is about online ads. Google has been killing the competition for several years now thanks to the dominance of its search engine. A deal with Yahoo! would simply make Microsoft a real competitor as opposed to a potential competitor.
3. They think it is OK for them to be a dominant player but not Microsoft. In effect they are suggesting that Microsoft's history suggests that if they become dominant in the Internet business then they will treat the Internet just like they did the PC business and that will be a bad thing. I think we all know that even if Microsoft pulled off this deal and even if they then de-throned Google, the governments around the world would be watching them like a hawk. And the governments have been pretty successful in getting their way when they take on Microsoft in court.

Of course you can't blame them for reacting to the deal but judging by the drop in Google's share price (now below $500 for the first time in over six months) it is clear that the market thinks they are running scared. I almost wonder whether they would have been better to play down the deal rather than look as if they are scared by it.

PS - I know Yahoo's name has an exclamation mark after it but Google's Blogger won't allow me to use one in the labels section...

We live in really interesting times

There are times when there seems little of great importance going on in the world. Right now there is more news than is possible to digest:

1. Stock markets in turmoil as they struggle to figure out if there will be a recession in the US and other parts of the world.
2. A stimulus package for the US economy
3. The biggest US interest rate cut in 25 years
4. Super Tuesday is looming and Obama and Clinton are fighting (again - Iowa Nice seems so long ago)
5. The Palestinians have found that unlike the Israelis the Egyptians will accept people simply demolishing the border between them so they can come and buy much needed supplies
6. The Italian PM resigns (that seems to happen every few years though)
7. A rogue futures trader allegedly costs French bank Societe Generale $7.14 billion

Against this amount of news it would seem almost impossible for any company to get on the front pages or be a lead story. Tough times for PR people...

MarketWATCH

If you read MarketWatch you will know they have cleverly embedded live stock quotes in their stories. It does add a nice dimension when you are reading a piece and suddenly one of the stocks listed shows an updated price. With today being another hugely volatile day on the markets, the article I was reading looked like it was covered in Christmas lights as the stocks kept changing. Indeed I ended up not reading the article and instead just watching the stock prices.

Stock Markets in Turmoil, Currencies Calm

It has been a wild ride for the various exchanges around the world today. As you will likely know, the DOW opened down 450 points, only to recover most of it after news of a 0.75% cut in interest rates by the Fed. That said if you look at the chart throughout the trading day you will see it has bounced a round quite a lot even after the interest rate news. The same can't be said for exchange rates. If you look at the exchange rates, you will see they have moderated over the day with far less volatility. Given the connection between interest rates and exchange rates you would expect there to be some shift in the value of the dollar following the unexpectedly large interest rate cut. Yet the dollar is only slightly worse off than it had been suggesting currency traders see more good news in the rate cut than bad. I'm curious why the opinions of currency traders haven't been sought today by the likes of AP. I'm pretty sure they'd have some useful input to the discussions going on following the rate cut.

La, La, La - Can't hear you!

You know when someone is trying to tell you something and you do anything you can to make sure you can't hear them? Well it would seem the various stock markets have become a little like that in the last few weeks. In the US Apple announced sales of the iPhone are doing great and the stock tumbled. Intel then announced profits up 50%, their stock was pounded. In our sector, Huntsworth and Chime both put out positive trading updates only to see their stocks fall - despite the fact that in both cases they used expressions like: "we are confident about our prospects for the year ahead." So it would seem the best thing to do right now is stay below the radar if at all possible. Positive corporate news, it would seem, is more likely to remind analysts you exist and drive your stock down than do the opposite. It makes no sense of course but it's hard to argue with.

How green is your FedEx?

Somebody wanted to FedEx a file to me today rather than email it to me even though it was only 8Mb and wasn't the most important document on the planet. I couldn't help but wonder how many files like this actually get sent via FedEx, UPS or DHL. I am guessing the number is quite large. Now in many cases it is because people want an original signed copy. My bank in the UK is big on this. I can converse with them via email quite happily but as soon as I want to transfer some money between the UK and the US I have to send a letter. What makes that all the more crazy is that today they emailed me to say they'd received my letter but could I just email them back to confirm what I'd just written to them about... All this bureaucracy must be doing a huge amount of damage to the environment. I wonder how many flights and truck journeys could be saved if a secure, digital transfer mechanism could be agreed that even small businesses and consumers could use so that orginals didn't need to be sent? Of course I can't see the likes of FedEx lobbying the government for such a thing as they'll lose business so maybe it's the sort of thing the likes of Google and other Internet giants should take up as a sign of their good citizenship.

Gates may have another career ahead of him

If you haven't yet seen the Bill Gates video from CES you should. click here. It's interesting to watch as he's clearly a little embarrassed when he introduces it and yet on the video he is quite a good actor - the gym scene is perhaps my favorite. Oscar winning potential? I don't think so but he could play the odd cameo role. Acting aside this has to be good PR for Microsoft as definitely shows their sense of humor.

Goldman Sachs Sees Doesn't see a Great 08

Reuters just published a piece saying: "Goldman Sachs on Wednesday said it expects the U.S. economy to drop into recession this year, prompting the Federal Reserve to slash benchmark lending rates to 2.5 percent by the third quarter. In a note to clients, Goldman said real gross domestic product would contract by 1 percent on an annualized basis in both the second and third quarters. For all of 2008, the investment bank said GDP would rise by 0.8 percent. The unemployment rate will rise to 6.5 percent in 2009 from the current 5 percent, it said."

We all hate to read pieces like this as they suggest we are set for a year where belts/purse strings will be tightened. Of course, the reality of markets is that some businesses will thrive during a period like this and some will truly suffer. The challenge we all face (assuming GS is correct) is how to make sure we are in the first category. At the end of last year I wrote a piece on what agencies should do when recessions loom. I'd like to reiterate the advice in that but I'd also like to add some other points:

1. Make sure your work is focused on the same things the board is worrying about. If you don't know what they are worrying about you should be worried. You need to know. Now of course we are all aware that in many businesses getting to the board is tough. That said, there are always access points so make it your mission.

2. Worry about the small things. When markets are bad people get nervous and look for the mistakes. Avoid making them. Good agencies have their share of good detail process people, people who can spot a tiny mistake. Give these people a voice and make it clear that they need to be listened to.

3. Provide insight. Recessions are like fog. They reduce corporate visibility making it hard to plan and even more difficult for businesses to act. Keep clients aware of what is going on around them. Give them data and some appropriate analysis that helps them understand what is going on. Decision making in the good times is easy as it gets less attention. In tougher times, everyone questions everything. The more insight you can give, the more you can help people feel good about the decisions they are making.

Of course it could well be that Goldman has it wrong. Over the holidays I met a couple of investment bankers from Merrill Lynch and Morgan Stanley. Interestingly they both said they have several "chief" economists to make sure that they can never be wrong. In other words, as long as their economists don't agree on the future one of them will be right!

Microsoft, Sprint and Blackberry Sync on Messaging

You may have noticed Microsoft's ad campaign for their smart phone platform which is built around the tag line Start Doing More. The idea being that you can get a lot more done with a Microsoft based phone. Meanwhile Sprint is running TV ads that end with the line "people might wonder how many of you there really are" (because you can now get so much done that is). Last there's RIM's Blackberry ad that has some line about a bigger world. It seems they are all focussed on what a mobile platform can do and not on why their particular platform is better...