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...