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...

463 Thinks they are funny

http://463.blogs.com/the_463/2007/12/463-turns-three.html#more

Tom Galvin, Sean Garrett and Jim Hock of 463 show there may be a career outside public policy waiting for them. Sadly it won't likely pay very much.

The markets only work in the long term

Ask any financial advisor and they'll always tell you to invest in the long term. Well, my guess is that investors in marketing services group, Chime, are hoping that this advice is correct. Chime put out a very positive trading update today, only to see it's share price drop nearly 9%. Lord Bell's quote read: "Our trading performance is very strong, our new business pipeline is very strong and our prospects look very good". Could he have been more positive? My guess is that right now Chime is wishing it hadn't said anything. Now some will argue that it released this on a day when the markets were down but in truth Chime's share price is already off nearly 40% from its peak earlier in the year. What would appear to be the case is that the markets have long memories and they remember what happened during the last recession and they are taking any opportunity they can to get out of media stocks, especially those with an advertising component. Of course we aren't in a recession and Chime is certainly sounding pretty bullish about its prospects. But it would seem that even a business with as much marketing intelligence as Chime can't manage perceptions around its stock price in a climate like this. Indeed the lesson from this would appear to be - say as little as possible and don't expect anyone to hear any of the positive news as they are only listening for bad news.

7 out 10 People say they want measurement

I've been digging around for articles on measurement in PR as I still believe it is an area that needs greater attention. In so doing I came across a paper by Chris Cartwright, MD of Harvard in the UK who carried out a survey on the subject. The paper is pretty good and certainly worth a quick read, though I should warn you it's even drier than this blog. The one thing that really caught my eye was the opening statement: "While 7 out of 10 PR practitioners agree that PR evaluation is an important part of their role..." I had to read this several times because I was stunned. What this says is that 30% or nearly one in three DON'T think measurement is important. Again I'm truly amazed by this. I can understand some people may not want to be measured because they're not doing a good job but to check a survey box that that says you don't think it is important perhaps explains why measurement is still so low on the agenda. I'd love the various PR institutions to take this subject on. I'd love the major brands to make it a top priority. But it would seem that until the three people out of every ten that don't see measurement as important are persuaded to think again then not much will happen.

Here's the link to Chris's article: http://www.chime.plc.uk/downloads/PR-Evaluation-Survey-Chris-Cartwright-Harvard-Nov07.pdf

Apple pays price of success

F Secure got some good PR today with the FT running a big piece on the front of its Companies & Markets section on how Apple is increasingly becoming a target for computer hackers. The story which quotes an F Secure security researcher, is based on research the company announced via a press release earlier in the week.

PR aside, the news here is that Apple is no longer immune to the malware that has plagued the PC community for years. It seems the dramatic increase in the number of Macs being sold (sales have roughly doubled from a year ago) has caught the attention of the hackers. If this trend continues, Apple will likely have to ramp up its efforts to promote the secure nature of its architecture and the efforts it takes to make the OS more secure over time. For a brand that is so consumer focused this level of technical message may be awkward to handle. At the end of the day though, it is a problem born out of success and therefore one I assume they'd prefer to have.

You Tube Score Update

A few months ago I used YouTube as a measurment tool to see how major brands scored. I ran this simple test again today. The results show that most brands are increasing their presence on YouTube at quite a significant rate. Here's the scorecard:

Brand Number of clips then ....Number Now
Disney 224,000 ....275,000
Google 97,000 ....169,000 <-- big jump
Yahoo! 81,100 ....123,000 <-- big jump
Apple 74,200 ....123,000 <-- big jump
Microsoft 44,700 ....69,500
Coca Cola 34,400 ....42,600
Toyota 33,400 ....42000
Nokia 27,700 ....30,900
McDonalds 22,000 ....29,900
GE 15,000 ....26,100 <-- big % jump
WalMart 10,600 ....16,700 <-- big % jump
Starbucks 7,200 ....8,530<--relatively small rise
Intel 6,280 ....10,200 <-- overtook Starbucks

40 under 40

I was pleased to read that our very own Clive Armitage, the CEO at Bite, made the PR Week 40 under 40. The list makes interesting reading. Out of the 40, 23 are from agencies - does this mean you are more likely to be successful in PR at an agency or just that PR Week has a better chance of hearing about you when you work at an agency? The fact that did surprise me in this list was that only 13 are women. In an industry that seems dominated by women that seems to go against the obvious logic. Sadly what it seems to suggest is that while women make up the majority of people in the industry, men still seem to have control of most of the top jobs. Anyway, congratulations to all of you that made the list and especially you Clive.

PS I need to have a word with PR Week about the photo they used as it's about 10 years old!

Dell believes in the Da Vinci code.

So the news is now out that WPP is to create a dedicated agency for advertising, PR etc which is code named Da Vinci for Dell. It's a bold move for the business and one that will likely have its share of successes and failures. The biggest challenge is clearly going to come on the talent front. Perhaps not so much at the beginning when it's all 'new' but down the track when the client is past the honeymoon phase and the real work has begun. It will be then that the new agency will have to sell people on the benefits of only working on one piece of business. Star talent will not want to feel like a contractor that's for sure. What is certain is that this move will be watched by others to see what can be learned.

Flogs and Slogs

This week we introduced the first annual report that is also a blog. I'll be honest when we had the idea a few months ago I was rather surprised nobody had done it before and felt sure that by the time we launched someone would have done it. Well, unless our Google searches are wrong, they didn't and we were the first. I don't think our blog is the greatest blog on the planet but I do think it will be the start of something. I'm pretty sure that in a year or so thousands of companies will be opening up their annual reports in this way. It makes a lot of sense when you think about it. Today lots of investors go to chat rooms and so on to get their insight. This approach allows them to have a direct access and it allows the company to take part in the debate. Now of course in many parts of the world there are still limits on what a CEO or CFO that is blogging can say but the success of may executive blogs such the one by Sun CEO, Jonathan Schwartz make it clear that people like the idea of an open door policy to communication.

As for my headline to this piece the question is what you call an annual report that is also a blog. The two listed, flog (financial blog) and slog (shareholder blog) are the most common suggestions to date.

Outsourced Agencies - Good or Bad?

One of the major tech companies is currently looking to put all of its marketing with one agency. It has currently asked two of the large agency groups to create an agency that will be dedicated to its business and handle all aspects of marketing from online advertising to research to PR. On paper the tech firm stands to do well out of this as the two agency giants tussle to offer the best value and brains. But to my way of thinking there are several issues that should concern a firm when they go down this path:

1. When you outsource all your marketing to one firm you are effectively signing them up for a VERY long time as switching is going to be even harder. So you had better be really sure you like the key people involved AND that that they will stay around.
2. The savings on the bigger pieces of the pie like advertising will likely be substantial but for the smaller pieces of the puzzle, lower cost will only mean lesser talent.
3. It will be tough to get people to work at this dedicated firm without throwing a lot of money at them (which seems to defeat the aim of the exercise). People who want to work at agencies typically do so because they want broad experience not to effectively work in house by having only one client.
4. One of the advantages of having an agency is that they work on other clients and are continually coming up with new thinking and new opportunities. These would likely dry up in a one agency scenario.
5. Integrated marketing has been around for ages and yet hardly anyone does it. Even those that do tend to have big areas where they make exceptions on the agency front. There has to be a reason why this approach hasn't been adopted by all the major corporations around the world...

Now I know there are some who will say that I'm in no position to talk given we have a business that offer a global solution for clients. I'd argue that we only offer them PR and relevant research. We don't try and offer them the entire solution.

When this tech firm makes its decision there will likely be a lot of speculation that others will follow. My suspicion is that some will watch to see how it works but I doubt many will immediately copy it.

What to do if a recession hits

Listening to the investment community either directly or through organs such as the WSJ it is clear that they believe we could be heading for a recession in the next year. Indeed, I gather the probability of a recession is now at exactly 50%. Having gone through a recession that had no impact on tech PR and one that had a profound effect (the dot com crash), it isn't easy to see how a recession may affect the industry, especially since the roots of this one would seem to lie in a mix of high oil prices and the credit debacle. What is clear to me, however, is that PR needs to get ready for the possibility of a recession. What does this mean:

1. We need to help our clients understand the value of PR versus other disciplines. This means we have to jump on measurement in a big way if it hasn't already happened. The facts on the effectiveness of PR are very persuasive but without them...

2. Anticipate your clients demands - what do you think your client would want to do if sales slowed? who are their biggest customers and how can you help them protect the customer base? What kinds of bad news may they have to deal with and how can you help them through that?

3. Avoid taking on clients that are likely to be hit hard in a recession. I noticed an advert for Net Jets in the WSJ today and my first thought was: "well there's a market that will get awfully hard if there's a recession."

4. Expect clients to consolidate their spend. Right now larger companies tend to spread their PR across firms to access the best skills for the job. If there's a recession they may well look to streamline the number of agencies in a bid to save money. Asking yourself if your firm would likely win or lose from such a change is probably a good thing to do now.

5. Don't take on new office space you won't need. During the last recession a lot of PR firms got into trouble because they had expensive offices they had hoped to grow into. Indeed I know of two fifty person PR businesses that effectively went bust because their leases ran to over $1m. Of course taking expensive office space is a silly move at the best of times but imagine having to lay people off because of a glamorous reception area and you will soon opt for the humbler option.

6. Conserve your cash. People based businesses, like most, are often run on overdrafts but when recessions do hit they can become cash strapped very quickly. Agencies need to make sure they have a good handle on how their cashflow could change if revenues were to fall back. A good CFO will be able to model this quite easily and should be able to guide agency heads.

7. Remember your people. When recessions hit agencies can often focus too much on the client and forget that without good people clients will walk. This doesn't mean that agencies should lavish money on their people that they don't have. What it does mean is that they should think about what makes people stay at a firm apart from money. Career develoment, skills, the working environment, their colleagues - these are things that matter to people in any economic climate so don't lose sight of them when an economy changes.

OK - off the top of my head this is my list. Hopefully it is a list we don't need but in truth some of it is just common sense and should be how we run agencies anyway. Right?

Have the clocks changed?

The clocks change twice a year and these days your computer and your phone automatically make the switch. Well, most of the time they do. My Apple iMac at home and my IBM notebook at the office both seemed to know that this year in the US the clocks don't change 'till next weekend. For some reason however, my cell phone and my work phone have already decided to turn the hands back an hour. This is truly annoying when it comes to my cell phone as it happens to be a Treo on the ATandT network (for some reason btw Blogger won't let me use the 'and' symbol). This means it also carries my calendar. So when I check my calendar on my phone most of my meetings are all in the wrong place. When my phone made the switch on Sunday I assumed it was a Treo problem but my wife's Blackberry, which is also on ATandT, did the same. My assumption is therefore that ATandT goofed up. You would think that by now someone at ATandT would have noticed and corrected it. Unfortunately what seems to have happened is that when they did notice they had a meeting that presumably went like this: "we messed up on the clocks going back Carl." "I know Bob but only by a week." "Oh well, let's just leave it then, most people have watches anyway."

How things change...

http://www.siliconbeat.com/entries/2006/04/18/facebook_raises_25_million_says_never_intended_to_sell.html

My guess is these VCs look super smart right now...

The PE tech stock chasm

Tech has been back for a while now. Tech IPOs and M&A activity has been back at boom levels but contrary to the theory that a high tide rises all boats, it would seem that the improved attitude of Wall Street to the tech industry has benefited some more than others. Of course you would expect that given each company is different but there appears to be a chasm that some tech stocks can't cross in terms of the PE ratios. If you look at the major tech firms such as Microsoft, Oracle, IBM, HP, Intel and Cisco they all have PE ratios that go from 16 to 27. Indeed you can find a LOT of firms in the tech sector with this kind of rating. However, there is another large group that seems to have broken from the pack and have ratings a full twenty points higher, or more! Apple is at 47, Google at 53 and then there's Amazon at a staggering 104 and VM Ware at a head scratching 242. What differentiates these groups would appear to be a mixture of perceived management strength and of course growth potential. The markets clearly believe we will all buy another 'i something' from Apple, search like crazy for things on Google, do our holiday shopping on Amazon and get all our computers to all use VM Ware's virtualization technology (yes that last example doesn't sound terribly exciting I know). So why do they believe Apple and Google are a better bet than IBM and Cisco? Is it because they view the likes of IBM and Cisco as old school tech? I think there is some truth here and it's a challenge for these guys which is why if you look at most of the big tech firms with the lower ratings you will see they have all been reinventing their business models. IBM, Microsoft, Cisco and Intel all have huge investments in manufacturing and development efforts in places such as India and China. These investments help reduce their cost base which should improve their earnings. But these changes also allow them to look at how products get to market. If you make the kinds of changes these businesses have then you get the chance to rethink everything when it comes to the way you design and manufacturer your products. It is almost like starting again in some ways as you have masses of new brains getting involved. My hunch is that in the next few years you will see the fruits of these changes not just in the costs of the company but in innovation levels. Maybe by then the chasm will have narrowed and maybe the likes of Google will have jumped back across. In the meantime the big tech firms on the lower PEs do face a communications challenge as they try and show that the businesses they are running today bear no resemblance to the ones they ran just a few years ago (which is true) AND that this change is very good news indeed.

The high price of Tech

When I blogged on the importance of Facebook the other day I have to admit I would have struggled to put a $15Bn valuation on the business. That said, Microsoft has effectively done that today making both the purchase of MySpace by News Corp for $580m and Google's acquisition of YouTube for $1.65Bn look like bargains. It will be fascinating to see what this deal does to the Facebook express train. With this amount of cash they can presumably go global and invest in their platform at a pretty aggressive rate. It will also allow the senior executives to get on with running the company instead of having to go through any rounds of VC funding. That said, it is pretty clear that they'd have had no problem raising money via that route if they'd wanted.

What I find more interesting is that Microsoft took such a small stake. It is pretty clear that they simply wanted to block Google rather than get executive control at this stage. Of course beyond the stock deal there is the ad rights portion. This is where the deal starts to make a lot of sense. The deal effectively gives them the rights to one of the biggest online properties on the planet and for that reason alone you can see why the valuation makes sense.

We have seen Tech valuations rebound quite dramatically this year. We had the VM Ware IPO which has been an amazing success story and now we have this deal. It certainly seems like the investment banks are keen to recoup the losses the banks have made in the mortgage business by some bold tech investments. It will be interesting to see which tech property can outdo these deals. One things for sure - someone will!

Gen F

OK I have to confess when Facebook started to emerge as a hot social networking site earlier this year I couldn't help but wonder what all the fuss was about. Even when I had it explained to me that Facebook was really more of a platform for all manner of applications I still tended to smile politely and ignore the commentary. When people sent me a message via Facebook it annoyed me - most of my friends on Facebook have my email address so why don't they just use that I moaned. In the past few weeks though I have been exposed to the generation that made Facebook what it is. This generation doesn't use Facebook, they live it. If they eat something good they share that morsel with their communities, if they get stuck in an airport they write it on their wall and so on. Photos are posted at an alarming pace and YouTube videos are shared like my grandmother used to share sweets (she was very generous btw). Facebook has also become their messaging palace. Put this together and it is clear that for this generation Facebook has become their online home. If I were Google I'd be a bit scared by this. My generation has got used to Google. We go there and we search. We don't do much else with Google though. The Gen Fs do a LOT more with Facebook and they spend hours there. Who's to say they can't create a search engine with Facebook user recommendations helping guide the results of that search? Indeed there really is no Google app they couldn't offer through Facebook. To use an analogy, Facebook could be the equivalent of a major TV Network, making Google a bit like TV Guide. This game is FAR from over but the community around Facebook is growing by the day and it is spending a LOT of its day there. For the oldies like me it may feel like a passing fad but if the Gen F people I've met are anything to go by, Facebook is here to stay and could well be the one to surpass Google as the dominant player on the Internet.

BTW - using my YouTube metric, Facebook is now above Intel and just behind Starbucks in the number of clips.

AP Style?

US PR people are encouraged to learn to write in AP style. Hopefully that doesn't include the headlines if this AP news story that just appeared is anything to go by:

Being delays first flight for 787

By ELIZABETH M. GILLESPIE, AP Business Writer 8 minutes ago

SEATTLE - Boeing Co. will not begin test flights of its new 787 jetliner until mid-November or mid-December, months later than originally planned, because it's taking longer than anticipated to get the first plane ready, the company said Wednesday.

YouTube provides brand scorecard

The popularity of YouTube is undeniable. This promoted me to see if it could be used to rank major brands. While highly unscientific in some ways and slightly unreliable in others, I used the search engine in YouTube to see which major brands got the most clips when you search by their name.

The results were:

Brand Number of clips
Disney 224,000 <--- I guess they ought to have a lot of content!
Google 97,000 <--- they own YouTube...
Yahoo! 81,100
Apple 74,200
Microsoft 44,700
Coca Cola 34,400
Toyota 33,400
Nokia 27,700
McDonalds 22,000
GE 15,000
WalMart 10,600
Starbucks 7,200
Intel 6,280

Now this research took about 5 minutes and as you can probably tell was based on a list of brand names I pulled form an old Fortune article plus a few names I threw in. It wouldn't be hard to do some more detailed research using the YouTube site and search engine to get a sense of how many clips are appearing each day by brand etc. As it stands I can't find a way of seeing which brand has the most number of clips associated other than by trial and error. Perhaps YouTube could issue a press release with that data?

Anyway, for those people looking to help big brands with their marketing, it seems YouTube provides a pretty simple way to score companies. There are of course some difficulties and these relate largely to the way the search engines work. For example if you put in 'Ford' as a search topic you will get a lot of clips that have nothing to do with Ford Motor Company showing up. Conversely if you put in Ford Motor Company it will only list those clips where people took the trouble to tag the clip with the full name. So YouTube is far from perfect but once again we do at least have another quick and cost effective measurement tool available.

Just for fun I also checked to see what the numbers were like for the bigger PR firms. The results were:

Text 100 312
Edelman 295
Hill & Knowlton 18
BM 8
Weber Shandwick 4
Fleishman Hillard 2
Ketchum 2

As you can see, the PR agencies have some way to go to catch the big brands....

Wikipedia Scanner designed to create PR nightmares

Last night on NPR's Future Tense they interviewed, Virgil Griffith, the creator of WikiScanner, a tool that shows who made what edits to entries in Wikipedia. When asked why he created it he said he did it to create PR nightmares for companies that were using wikipedia as a disinformation tool. Indeed on his own blog he says he created the tool to: "To create a fireworks display of public relations disasters for all the world to sit back, and enjoy." This is a man who is clearly annoyed to see that some companies are attempting to hide behind the anymous posting policy on wikipedia and distort entries relating to their business. An example he used in the interview was of soft drinks manufacturers removing mentions that these drinks were harmful to your health. I think it's great that he has created this tool as I think it will help clean up wikipedia. Having lived through the nightmare of getting my own business listed on wikipedia I do worry that it will make people less likely to contribute though. When I listed Next Fifteen it created a host of comments about my independence and therefore the entry's credibility. In truth I never tried to hide my identity and the edits I made were to make sure it was factually accurate and that it met the criteria the 'wiki police', as I call them, were telling me the piece had to meet.

I have to say though that if wikipedia has been so abused by big companies, I am surprised that a 'PR firestorm' or two hasn't already started. Or is it simply that nobody has yet really used the tool in anger? Either way I guess from here on in PROs had better be aware that their entries are being watched. Of course I guess they could always make entries using a computer at an internet cafe given the tool relies on the IP address of the computer making the entry. No PRO is clever enough to do that of course.

What is wrong with books?

The Associateed Press released a AP-Ipsos Poll yesterday that shows that one in four Americans didn't read a single book last year. Nont one. Not even a Harry Potter book. Curiously, book sales are flat despite the fact that the AP-Ipsos Poll suggests that more and more Americans are finding other ways of spending their time reading books. This suggests that the ones that are reading are actually reading more books. Also shown in the poll is a bunch of data that you would likely expect. Out of Women that read they tend to average nine books a year versus men who read a mere five (it doesn't say who reads the more interesting stuff ;). So it would seem that we now need to add the death of the traditional book to the slow painful death of the newspaper...

If you want to read the details of the Poll click the link below. It has all sorts of interesting facts. For example of the books that were read the most popular were the Bible and other religious texts at 64%, whereas business books got a mere 4%.

http://www.ipsos-na.com/news/client/act_dsp_pdf.cfm?name=mr070821-4topline.pdf&id=3613

Clean conscience

Like many people in California I drive to and from work. In truth there is little choice unless you want to embark on a public transport system that would take twice the time and cost pretty much the same amount. I am due to change my car in a few months and have been getting my mind around the idea of buying a Toyota Prius. For the record I can’t say I like these cars very much. I fall in to the group that thinks they are relatively ugly. However, as someone that believes we need to do our part for the environment, a Prius seems the best bet. That said, when you look at the cost of a Prius, which is after all a pretty basic car, you realize that you are paying about a $10,000 premium to drive a car that is more eco friendly. As someone who typically owns a car for about three years that isn’t too bad when spread over the cars life - or is it? I’ve been looking at TerraPass.com which, like CarbonNeutral.com in the UK, gives you a chance to buy carbon credits for all the nasty emissions your life produces. For example, you can pay about $200 and that will apparently make your home carbon neutral for a year, a similar sum would handle emissions from most people’s annual air travel. When it comes to cars the TerraPass site estimated the cost of clearing out my emissions to be $50 a year for my current vehicle or $30 a year for a Prius. You can see where this is going can’t you? So for $150 I could make up for my car’s emissions during its time in my hands. Put another way if I bought a slightly more attractive car that actually cost less than the Prius but wasn’t as eco friendly I could use the saving to buy a massive amount of carbon credits. Indeed I’d likely have enough credits for all the people that read this article. So what do I do? Should I buy the Prius and feel good about it’s eco stats or get something cheaper and buy each of you a carbon credit?

Cutting the wires

Last month Sun Microsystems announced the beginning of the end for the wire services by saying that they would use the Internet as their primary distribution channel for important news, with the wires carrying the news 15 minutes later. Their first major announcement to be handled this way was their quarterly earnings and it seems to have gone without a hitch. I can only guess how many other Fortune 500 companies are watching to see how this switch goes so that in time they can end the somewhat old fashioned notion of using a wire service to distribute news. In the age of the Internet and RSS feeds it does seem very strange to rely on a wire service but on closer examination there is an argument, albeit a rather flimsy one, to keep the wires in place, at least for now. The argument as I see it is simple - the Internet can be unreliable and isn't necessarily controlled by the person either sending or receiving information. This means messages can get hacked, blocked etc and who is then responsible? Add to this the fact that we know that some companies have CEOs that are prepared to do things that are less than 100% legal (witness the stock option back dating mess) and you realize that it would not be hard to conjure up the situation where company A's earnings release is blocked by company B's hired hackers. So while I for one fully expect the Internet to replace the wire services, I also suspect that the wires will continue to stay in business until such time that such issues can be fully overcome.

Has MySpace died and will the WSJ follow?

Pre Murdoch I heard about MySpace every week if not day in one way or another. Since Murdoch bought it, the military has banned its use by soldiers and Facebook has arrived as the latest 'thing' in social media. This makes we wonder about a couple of things:

1) Are social media sites a bit like search engines were back in the old days - destined to be superseded until somebody invents the Google equivalent?

2) Will Murdoch's acquisition of the WSJ be a good thing? The apparent disappearance of MySpace is of course a PR problem. MySpace is still huge and getting bigger by all counts. It simply doesn't get the buzz that Facebook currently enjoys. While I'd argue that Murdoch still doesn't seem to know what do to with MySpace, it would be hard to argue that he'll have the same challenge with the WSJ. He understands the newspaper business and will presumably leave the news side of the publication well alone. He may well change the right wing tone of the editorials but even that is debatable. He does have a challenge on his hands though. He has bought a publication, that like most other newspapers, is losing readers on a daily basis. Sure, they are acquiring some online readers but the overall picture isn't a good one. At a certain level he will be forced to make some changes at some point, if only to make sure he can continue to generate reasonable returns. I guess the question is how long will he wait before he acts and how will he go about it?

Boeing, Boeing Gone

Boeing recently launched the 787 a totally new type of commercial airliner. It seems to be a huge success with 677 orders already on the books. Despite this rather long waiting list they today placed a full page color ad in the Wall Street Journal on the back of the first section. This seems an odd move to me. Looking at the ad I can't help but feel that the real reason they ran it was that in all the press coverage they got about the launch of the plane, few, if any, mentioned that it was launched on 7/8/07 (get it?). Indeed the whole purpose of the ad seems to be to point out that they launched the plane on that date, which is now 10 days ago. I guess with 677 orders they can afford to waste moeny on ads that simply point out an aspect of their marketing program that is now out of date...

Facebook offers cheap polls

If you want to do a quick and cheap poll to see what 200 people think about something, you can add a tool, imaginatively called Polls to your Facebook page which allows you to ask some multiple choice questions, each of which will get up to 200 responses and each of which will cost up to $51. You can select age groups for your poll and to some degree demographics. It's hardly the most advanced tool in the world but it's pretty good. I just put out the question: "who does the best PR?" offering Cisco, Dell, Apple, Microsoft and Google as possible answers. On the day that Apple is launching the iPhone it is perhaps not surprising that Apple is so far in the lead with 38% of the vote. Dell is currently last with 0%. The tool is hardly perfect - in fact I tried to offer IBM as a potential answer in my poll and it said this answer had too many capitals, so I chose Dell rather than write ibm. Anyway - this maybe useful for PR folk out there doing pitches or when they want to give a client a more calibrated view on a subject.

More bad news for advertising

The FT has just posted this article. Hot on the heels of the ban on billboards in Beijing come these moves in the UK.

Spread the word about the benefits of advertising
By Jamie Whyte
Published: June 26 2007 18:31 Last updated: June 26 2007 18:31
Advertising is unpopular with those concerned for our welfare. They see it as a kind of  coercion, making us “want things we do not really need” and, sometimes, things that are positively bad for us. Ban the ad, they demand.
Modern regulators are happy to oblige them. On Sunday, two moves to tighten up on advertising junk food to children come into force in the UK. Ofcom, the media regulator, introduces new content rules (including banning the use of celebrities), prior to banning advertising of foods high in fat, sugar or salt during television programmes popular with under-16-year-olds next January. The Committee of Advertising Practice, an industry group, is bringing in similar content rules for press, posters and paid-for internet space.

Beijing Bans Billboards

Jason Leow of the WSJ wrote yesterday about the removal of 90+ billboards on China's Golden Avenue in a bid by the city sanitize the city's image. He reports that the crackdown appeared to start on the advertising of luxury homes. Now, he went on, as a part of a massive urban reorganization exercise the advertising ban has been extended across much of Beijing.

This is reminiscent of a similar move in New Delhi a few years ago where thousands of illegal billboards were removed so you could actually see the city. At the time there wasn't actually that much to see but a lot has changed since and presumably the city planners in Beijing expect their city to continue to evolve and would prefer that billboard proliferation not be a part of the outlook.

This of course poses a huge headache for brands that relied on these billboards to get their messages across, however unsubtly. So as the city tries to prevent itself from being one giant Times Square or Piccadilly Circus it will be interesting to see where those ad dollars go that would have promoted all those luxury cars and condos. I suspect the ad agencies will have some ideas on how to spend the money but maybe some PR execs should be putting their thinking caps on too.

Apple's $3Bn Battery

Apple's market capitalization increased $3Bn today on the news that it had improved the battery life of its soon to be launched iPhone. They also said the screen would be glass rather than plastic. My assumption is that the latter didn't affect the stock as much as the former. Either way it seems that investors are betting big time on the iPhone and assume that any small improvement will have a big impact on sales. That said, today's rise in Apple's value is stunning. If you assume that all the people who will now buy the iPhone because its battery life is a bit longer buy the more expensive model then to generate $3Bn in additional value in one year you would need to sell an ADDITIONAL 400,000 phones by my calculations (I've made some basic assumptions on how much after tax is earned from each phone sold). That's about a 1000 EXTRA phones (that cost $699) a day just to support today's rise in stock value. Of course it could be that the market is only just getting its head around the fact that Apple is going to be a big player in the phone market alongside Motorola and Nokia. But remind me, how may phones a day do they sell that cost $699?

Microsoft spell checker

Ever noticed that the spell checker in Microsoft Word knows names like IBM, Hewlett Packard, Toshiba and Sony but struggles with Google, Facebook and MySpace? Makes Word look like the parent that can't quite speak like a teenager. Funny though that the spell checker in Google's blogger doesn't question any of the names...

Notable PR blogger seeks job

Seems a notable PR blogger that writes under a nom de plume in the US is looking for a job in Europe. They're presumably hoping to cash in on their social media prowess by helping beef up the skills of the firms over there. There is a challenge with this though. Good PR blogs, like many good industry blogs, are irreverent and tend to poke agencies in the eye when they do or say something stupid. In truth they poke at agencies most of the time, whether or not they've been stupid because that's what make them an interesting read. In other words, the very skill that makes them good at their job as a blogger makes them harder to hire in the industry they watch. After all, if you are agency X and have been roasted by a blog for the way you handled something, are you likely to want to hire the blogger? The answer is going to be no in most cases as quite simply most agencies would struggle to admit that the blogger was 100% correct. That's because they weren't 100% right... 85% maybe but not 100%. This is of course a shame but it's human nature even for thick skinned PR folk. Of course I'm not suggesting that bloggers soften their style so they can get agency jobs. It would be a shame to lose the edge that these blogs have developed just so the poeple writing them find it easier to get a job in PR. Instead it probably calls for these blogs to be prepared to be a little more willing to listen and for the agencies to accept they're not perfect.

Google is hiring for PR

Word on the street is that Google is looking to hire some 70 PR people at its head office in Mountain View in the near future. If true this could have quite an impact on the tech PR industry. At its simplest level it will tighten an already tight labor market and potentially drive up salaries as people try and compete with the search engine giant. Nobody would argue that Google has built an impressive brand in recent years but there are a couple of questions that I’d put out there. First, why is Google doing this now? Is it because they believe they are starting to see sentiment move against them much as it did with Microsoft when they became wildly successful? If so, then being a PR person at Google may be a less enjoyable task than in the last few years where editors have eaten up every news story, no matter how trivial. The second question is what has happened to Google’s stock? Last year the stock soared and then… soared. This year it spent most of January around $500 and has since drifted off to around $475. Could it be the new army of PR people is being brought on board to try and get the stock price moving again by airing more positive stories about the business? It’s worth considering that Google has historically been able to attract some pretty hot talent thanks to its soaring stock price. I wonder if the relatively poor performance this year is starting to hurt these hiring efforts…

eBay as a market research tool

I was reading a blog entry the other day that asked what had happened to the Microsoft Zune, the much touted rival to the iPod. Given the money Microsoft spent promoting the product it is a good question to ask. One way I sought an answer was to look on eBay and see what price these were now selling for. In essence I wanted to see if there was a big market for them and also what had happened to prices. It then occurred to me that eBay in effect offers a great tool for people wanting to track the life cycle of a consumer product. You can pretty easily take off the current pricing of products (highest and lowest) and also the volume available on a daily basis and thus plot the rise and fall of these products over time. This is the sort of data that usually required expensive research. Thanks to eBay it is essentially free if you can get someone to pull the data, or if you create a tool that automatically takes off the data. In the case of the Zune it did sell at a small premium to start with and can now be bought for around $180, which is about a 28% discount. Taking my theory another step I'm pretty sure you could use this kind of data to predict when you need to release a new version of a product in order to prevent the sales price sliding too far. Of course you could also use it to predict when your competitor should be releasing a new product.

Reuters creates a target for PROs

A couple of days ago Reuters made an announcement that appears to have been ignored by the PR industry. Essentially they announced the introduction of technology that would scan news for sentiment on particular companies and issues. If, as a result of these news scans, sentiment went above or below user defined limits, then an automatic trade would be executed. It's another form of algorithmic trading and will likely become a key target for PR consultants wanting to drive the price of a stock up or down. Presumably, if you know how to play the sentiment game, you will in effect be able to force your client's share price up and its competitor's down. A pretty scary thought but just as there are companies that have built a business optimizing sites for search engines, I suspect there will be people optimizing content for this Reuters technology.

http://about.reuters.com/productinfo/updates/update.aspx?user=1&id=1176&

Will a weak $ affect our industry?

My guess is that most people in the PR industry don't pay much attention to exchange rates, unless they do financial PR. This isn't intended to be a criticism. In most instances exchange rates don't make much difference to the day to day work carried out in our industry. However, the steady decline of the US dollar in the last few years ought sooner or later to have some impact. From where I sit I can see a few ways a weak dollar could impact agencies:

1. For agencies representing European firms a weak dollar may create an argument for higher spending. This argument is based on the fact that relative to the Euro or Sterling, marketing spends in the US are actually declining in real terms - of course so are sales which is of course the reason most budgets won't change. But for companies wanting to shift perceptions in a big way, now may be a good time for that promotional push in the US.

2. For agencies representing US businesses overseas it could be argued that budgets should also rise. I'll admit here and now that the logic trail is rather one sided but hear me out. Many US businesses are benefiting greatly from a weak dollar by becoming more competitive in overseas markets. Put another way they are deriving a greater percentage of their profits from overseas markets thanks in part to this improved competitiveness and in part to the translation effect of converting say sterling back in to dollars. This may in turn make it more attractive for them to up their marketing spends in these markets to improve sales even further.

3. US agencies looking to sell may find themselves more attractive to European buyers. The US agency market has been a difficult one to crack for many European agency groups. A weak dollar makes US agencies a relatively cheap deal right now - if of course you assume the US economy is going to continue to perform relatively well. Now there a number of UK agency Groups that could be potential buyers, these include: Chime, Huntsworth, Creston and of course Next Fifteen. The larger Groups such as WPP and Publicis are of course also an option. My guess is that the likes of Ad Media Partners are brushing up on their international dialing codes.

So while a weak dollar can be frustrating for someone like me that runs a UK-based PR Group, the news isn't all bad.

YouTube's Next Step?

If like me you occasionally poke around on YouTube for research reasons, you may have noticed an increasing number of videos of things that are for sale. This includes items like cars and houses. This of course makes complete sense as it becomes clear that if you want to buy a big ticket item it might be nice to have more than a few pictures, which is typical on eBay. It would seem logical therefore that Google, as the new owner of YouTube, may just look at adding an eCommerce engine to YouTube to enable people to actually buy the items shown on the videos. YouTube purists may say this will make it even harder to find good content but I suspect the guys in Mountain View could find a solution if the site really does fill up with sale items. Of course, the other alternative is that eBay adds YouTube like features to its site. Watch this space.

Technology PR or Energy PR?

In the last six months we have seen the environment come back on the agenda with a bang. This has caused almost every major company to look at its 'green quotient.' Now for some businesses this simply means making themselves carbon neutral but for others it means changing the products they sell and some cases rethinking the competition. Take companies such as Cisco and Polycom who both offer pretty sophisticated video conferencing solutions. Whereas these systems were at best hokey (and horribly expensive) a few years ago, they are fast becoming usable and affordable, thus causing the airlines to take note. Now if you had said a few years ago that United Airlines biggest competitor would be a technology company people would have patted you on the back and changed the subject. Of course just about every major tech company is now looking at its product set and asking: "can we make it use less energy?" or "will this solution save the customer some energy?" This is changing the very messaging of the major tech firms and many smaller ones, putting energy up near the top of the list. The other big shift has been the shifting interests of the major VCs towards clean tech investments. John Doerr and Vinod Kholsa in particular are making big steps in this direction with huge investments in areas like bio fuels. These people are of course expecting their marketing partners to make the same shift, meaning that PR businesses that were announcing servers and embedded chip controllers a few years ago are now discussing the merits producing ethanol from corn, versus sugar cane or even trees.

Now this could all just be a passing phase and as one senior PR executive said to me yesterday, the media is already getting a little tired of writing about how company x is going green. But what does appear to be clear is that the tech market and energy market are converging. So any self respecting PR executive that is currently making a living from tech PR had better start learning about the dynamics of the energy market, because in one way or another its going to affect them quite significantly in the years ahead.

Didn't we get a new Fed Reserve Chairman?

The Federal Reserve Chairman is Ben Bernanke. Yet it seems the former FRC, Alan Greenspan, seems to have either forgotten he retired, or was never told. In recent weeks he's spoken to the media a great deal with views on the likelihood of the US economy slipping into recession (he's gives it about a 30% chance in the next year) and his thoughts on the collapse in the subprime lending market. His comments are getting the attention of the media and the financial markets. Now of course it could be that he misses being in the spotlight and simply wants to see his picture in the papers, or it could be that the government finds it quite useful to have a credited but unofficial source giving people some guidance. If it's the latter, then he may prove quite an effective spokesperson for the current administration, assuming of course he keeps people feeling that things are going OK. Either way, I'm guessing that the government's PR machine is keeping a close on eye on his pronouncements and is likely ensuring he gets their side of the story.

http://news.yahoo.com/s/ap/20070315/ap_on_bi_ge/greenspan_2

The next big thing

Spent the last few days at TED, a pretty amazing event that feels a bit like a meal. Presentations from movie producers, software engineers, poets, physicists, Paul Simon and Bill Clinton. The reference to the meal being that some of this has been like 'having to eat your greens,' while other parts have been like being given a great dessert. If there's one theme that has pervaded the event so far it is again that we all need to work on saving the planet. This was very much the message of John Doerr who ended his speech in tears and has been a passing reference by almost all the other speakers. From a communications perspective it's hard not to walk away from this feeling that for brands to succeed they must put greater emphasis on this aspect of their social responsibility if they are to succeed. Of course you may argue that consumers are the ones that will be the judge of that. I'd argue, having been bathed in the 'we have to save the planet' message for a few days by leaders from all walks of life, that this is not a passing fad. equally it's a message that is getting the attention of some pretty important minds. Therefore I'd argue that what we have here is something really important. It's what VCs have been searching for since the dot com bubble burst. It is the next big thing. Kind of funny when you think about it. The next big thing isn't some amazing new algorithm or financial model, it's the thing you've been standing on for most of your life - the planet.

A Long Tale on the Value of Blogging

Excuse the pun but I recently came across a paper co-written by some IBM and Google researchers on the connection between blogging and the sales of products. The paper was written back in 2005 so is not new but it is one of only a few papers I've ever seen that have tried to draw a clear link between the impact of blogs on the sales of companies. The good news for bloggers is that there appears to be a connection. At least there was when it was written. While rather academic it is worth a read.

http://labs.rightnow.com/colloquium/papers/prediction_from_chatter.pdf

Google Toy Useful for PR

If you want to know whether Tony Blair has been in the news as much as George Bush, or Apple Computer versus WalMart then Google Trends can give you a pretty quick answer. For many PR execs wanting to know if their client is making as much noise as its rivals this tool will be very helpful - assuming their client is big enough to make a decent amount of noise. I recently saw this tool used to express a client's 'noise level' versus other big companies and while it doesn't allow you to dig very deep it is nevertheless useful. Right now most searches simply track the volume of searches for each item but for some the results also show News Reference Volume. For example, search Google versus YouTube and you will see what I mean. I can only assume that in time Google will make this technology more powerful and useful, much as they have with Google Maps. Watch out media measurement businesses, Google has come to town...

Oh and if you search on PR versus advertising, it looks like PR is slowly catching the old dog.
http://www.google.com/trends?q=advertising%2C+pr&ctab=0&geo=all&date=all