This blog has a new home

I've moved this blog to:
http://timdyson.wordpress.com/
Hope to see you there!

Enfatico

Enfatico is Italian for emphatic or pompous. Just over 18 months ago WPP won the contract to build a global marketing agency from scratch to service Dell and named it Enfatico. The firm was meant to bring all of Dell's marketing, advertising and PR under one roof, cutting costs and eliminating the problems others have had when trying to offer an integrated service. It was a bold, ambitious plan. At the time WPP said Enfatico would use the model to win other clients in time. Well, at this stage Dell is the only major client Enfatico ever had (they did have one other client: Progress Software) and Enfatico itself has been rolled into Y&R. So does that mean the experiment failed? Officially Dell will deny any failure but it clearly hasn't been a roaring success. If it had, then Dell would be one of many clients for the agency and Enfatico would be growing like a weed.

So why has Enfatico not been an emphatic success and instead been something of a pompous failure? From the start the agency had a significant problem that was meant to be its main asset - namely that it had only one client. Hiring top talent to work on just one account was always gong to be a challenge. It's also not a great business model. After all, does a client truly want to buy 100% of the time of all the people in the firm?

The other great problem for Enfatico is that it didn't appear to have total buy in from the client side. Rumors constantly circulated that different departments liked their old agency partners and wanted to go back to the way things were before. This makes it really tough to keep a client. Agencies and clients have to be a team, this is especially true with larger clients where there are so many moving parts.

Does all this mean the days of a single global agency are over? I very much doubt it. I think it simply means the Enfatico model didn't work. That said, I'm sure WPP will try the model again.

Twitter's growth isn't being fuelled by teens

According to today's New York Times Twitter's success isn't being driven by teenagers. In fact it's being driven by almost every other demographic. This seems surprising at one level but not at others. Teens spend more time text messaging than on sites like Twitter. Indeed teens account for only 9% of Facebook's users according to today's article. This shows that Twitter and Facebook are being driven by people with an income, rather than people who have an allowance. Which in turn suggests that the value of these social media properties that has been so wildly elevated, is probably justified.

The rampant success of sites like Facebook and Twitter makes me believe there may be another generation of social media sites about to truly explode. Twitter appears to be doing well in part because it enables communities to form around a person's comments even though many of those people involved don't know each other. Facebook is quite the reverse, deliberately so. I therefor love that places like Ning and Grouply are tapping into the intersection of these sites. Grouply, for example turns old style Yahoo! or Google Groups into vertical social networks. In other words they allow you to build a version of Facebook just for the 2000 people who love a certain obscure hobby. The cool thing is that unlike Facebook, you don't have to know these people to join the group. In that way they are bit like Twitter where you can follow a stranger's Tweets. I'm sure that at some point a site like Grouply will get bought by someone like Facebook or Twitter so they can open up this market to their millions of users and in the process offer advertisers another way to reach an interest group. From a PR perspective, a place like Grouply is fascinating as it also gives you a way to find some very influential communities AND to learn what their conversations are.

The end is nigh... so what s next?

So, economists seem to believe the worst of the recession is now oer in the US and that we may even see some economic growth in Q4. As we pull out of this I started to wonder what scars this recession would leave and whether it has really changed the way we do business. My observations:

1. Businesses have all learned how to cut costs. Some of have done so intelligently, others... not so much. I believe there will be a generation of businesses, post recession that struggle because they made the wrong cuts. There will be others that now realize they were wasting a fortune before the recession and will forever be leaner businesses.

2. Businesses have learned new ways of generating income. While my study is hardly scientific I believe hotels, like airlines, have started charging for more and more things AND they have raised the prices on things that were already extras. I just stayed at a hotel that wanted to charge $5 for the Snickers bar in the minibar. I suspect that price will remain long after the recession has ended.

3. Businesses have learned about the power of customer service. Actually I should say SOME businesses have leaned about the power of customer service. The ones that have will at worst survive this recession and the ones that haven't are dying right now. Customer service is better than any new product or service. It is loyalty, feedback and free marketing. Why some businesses fear it is a mystery to me.

4. Businesses have learned who their best people are. Hiring people is relatively easy compared to letting people go. Letting good people go is especially hard. Strangely though, I've heard so many business leaders talk about how their business is better now that they are smaller. Hopefully, what we all learn from this is that at the heart of our businesses are some great people whose views, opinions and ambitions we need to listen to. But we mustn't stop doing that when the recession ends.

These four lessons are the ones I've taken away from this recession. I'm sure other businesses will learn different ones. I'm also sure there were several lessons I missed. If you think I did miss one, please let me know. Right now is the best time to learn!

Gladwell Meets Twitter, Facebook, Flickr...

I grew up in England with people that rarely told you much about themselves. It simply wasn't done. Some of those same people are now friends on Facebook and are people I follow on Twitter. I'm finding that I know more about them now than I did when we lived in the same city. Are Facebook and Twitter therefore becoming a measure of the degree to which you know someone? Should you rank your personal network based on those that you interact with via these social networks more highly than those you simply meet from time to time? Of course some people use Facebook and Twitter more than others, just as some people blog more frequently than others (yes I know what you're thinking). The active participants are of course the ones you will know most about, which leads me to my next thought: I can see someone like Malcolm Gladwell doing a book on social exposure, the degree to which we expose our personality and thoughts online and how that defines us. Are 'mavens' in Gladwell's Tipping Point, likely to have large social networks and to divulge large amounts about their likes and dislikes on Twitter and Facebook? Are his 'connectors' the ones that simply drive the creation of social networks? I can see technology that analyzes people's Facebook pages and then slots them in to Galdwell's character types. Would that be useful for PR people? Maybe.

iPods disrupt another market

A friend is leaving for France next week with his family. They are doing the usual mix of Paris and Provence. He's a fan of the Rick Steves' travel guides and TV series and has used his advice for many parts of the trip. One thing they are taking advantage of is a series of guides to places like the Louvre and Versailles that are available as a free download on the Rick Steves site. In other words you can download a podcast on to your iPod on all the places you think you may visit on your vacation and then simply call them up while you walk around the museum, castle or whatever it is you're interested in. This saves potential expense, standing in line and you ending up with a handset trying to guide you in the wrong language (that happened to me when I was last in France - I got a guided tour of some Roman ruins in German. My German is non-exsitant).

Now of course it makes sense for a site like Rick Steves' to offer these podcasts but I also wonder if it may also be worth Google and Microsoft adding these podcasts to their maps. So if you drill down on a map and see a museum, you could download the audio tour and perhaps even a video tour. Another idea would be for these museums or places of interest to offer a 'pre tour' introduction, giving you an idea of how long the tour will take, what you can expect to see, learn etc. It may include the items that would be of interest to young children or for that matter that would bore them. In other words it could guide you on how to get the most out of the... guide.

You may think this an obscure market and an obscure idea but given the popularity of the iPod and iPhone, I can see this changing the way we all enjoy and learn about our history. Imagine walking up to a Rodin sculpture at the Cantor Art Museum and being able to play a short video on your iPhone that shows you details you may have missed, gives you an insight into other pieces he created, or he may have taken from other artists etc. In short it gives us all the chance to learn and be entertained in a completely new way.

New York Times Ad Sales Plummet

Ad revenue for the NYT dropped an amazing 31.7% in the last quarter. This tells me two things:

1. Confidence in advertising is at an all time low. If people believed in advertising then even in these relatively depressed times, ad sales at the NYT should hold up relatively well. They haven't, so they mustn't.

2. People are turning to other platforms for advertising and to other forms of marketing. From what I've seen, few marketing budgets are being cut by over 30%. Indeed a 10% cut seems about normal year on year. So where are the dollars going? Given the NYT results are meant to include their web properties, it would suggest that the dollars must be going to other properties and other forms of marketing.

Last week I also noted a study that said only 3.5% of major news stories started life in the blogosphere. Indeed the coverage of the story (in the NYT) suggested that the blogosphere had been over hyped. My read was that I was actually impressed that from a standing start blogs had made this much impact on news. It suggested to me that within five years, we could easily see that metric rise to 10% and from there to a sizable minority.

Connecting these two news items may not be obvious but to me it demonstrates the pace of change in the media industry away from traditional news outlets. This endorses the view of many of us in PR that we must a) be investing in digital communications and b) we should be helping our clients understand the shift that is taking place.

Looking our best isn't natural

I've been giving some thought recently as to why companies have to try to look their best. For some time I'd believed that looking your best was simply a matter of the right training and discipline and then eventually it would simply become second nature. When taking a photo of my eldest daughter I had a revelation. I asked her to smile. She duly obliged and I got my photo. She then went back to her more normal expression. In short she looked great for a few seconds. Of course like most people she wants to look her best most of the time. When I asked her why she didn't smile like she did for the camera more often, she said "it's too much like hard work." Of course few, if any, people look their best all the time (I look awful most of the day and especially so in the mornings). So why do we expect companies to be any different? It's also no wonder that like many of us who struggle to smile nicely for the camera, some companes that are trying to look their best, look like they are putting on a false face. I guess the real answer to all this is not to train companies to put on their 'camera' face but instead, teach them to exhibit their real qualities - and of course encourage the people observing them to use the right lense. Now say 'cheese'.

Steve Jobs is Apple

The rumors and stories surrounding the health of Apple's CEO are rife. Has he had a liver transplant? Has he already returned to work? All this shows how entwined he is with the success of the brand. The success of brands is often associated with an iconic leader. For years Bill Gates was Microsoft. Virgin is Richard Branson. And of course Ford was, well Ford. Of course companies are way bigger than one person and their success doesn't rely on these iconic leaders, at least not on a day to day basis. These leaders are the people that do, however, set the vision, the tone and the values of the company. Jobs has set a culture of perfection. He has set out a product strategy and he has set out a vision. All of these will enable the business to be a success... for a while. If he does dial back, or even leave, it will affect the company. How quickly and to what extent remains to be seen. My guess is that Apple will do fine for a year or two without him at the helm but if his replacement cannot install his or her own brand of magic, Apple could well turn into just another consumer electronics company. That would be a sad day.

All of this uncertainty around Jobs' health does create an opening for his rivals. Rivals could of course praise Steve and make it clear how great a job he has done at Apple and how amazing his vision is etc. They would do this to make people connect him even more with the brand, so that if he does have to step down, the loss would be seen as all the greater. I'm sure they wouldn't do that kind of thing though. Would they?

How the Internet/Apple has changed since 1998

Product reviews are not for everyone

People like to read reviews of products in magazines they trust. They are helpful when they are making even a small purchase. For many though, the ratings of other buyers on sites such as Amazon.com or Bestbuy.com are fast becoming a ‘good enough’ barometer of the quality and value of a product. Indeed an entire industry has emerged to harness the power of user generated product or service feedback – tripadvisor.com being one of the notable success stories. But the generation of these user reviews does of course rely on some people having bought the service or product. After all, if there no users, there will be no user reviews. This is where the media and now certain blogs, have an advantage. They guide the early adopters of products. A good recent example of this is the Palm Pre. Google or Bing reviews of this product and you’ll see that at this stage there are plenty of product reviews at places like C|Net or Gizmodo but you won’t (or at least I couldn’t) find any customer generated reviews on major sites. Of course that will change in time but it’s clear that only those buying the phone early in its life will just have these more traditional product reviews. Which brings me to my point – product reviews are not for the masses, they are for the early adopters. Does this change the way PR people tackle product reviews? I suspect it should. Early adopters are by definition different. They have slightly different demands to the normal users. It would be useful for communications staff to profile early adopters and look at what characteristics they have and how the product being promoted appeals (or doesn’t appeal) to those characteristics.

Twititions get a boost

Twititions are Twitter petitions. You can see all the Twititions by going to Twitition.com. So far 537 Twititions have been created and they've received 32,374 signatures. Put another way the average Twitition gets around 60 signatures. However, Twititions just got a huge boost by the decisions of AT&T and O2 to charge people a high price to upgrade to the new Apple iPhone 3GS (see post below). An O2 twitition has attracted over 5000 signatures, whereas an AT&T Twitition with the same complaint has garnered over 13000 signatures. Put together they account for over half of the signtaures attracted to any Twitition. This shows that people on Twitter want this kind of outlet for issues they care about. Of course it also shows that you can't simply create a Twitition as a tactic in a marketing plan. Without these two Twititions, the average Twitition has only 30 signatures...

Apple must not want the business

Apple launched its much anticipated update to iPhone today, called the 3GS. It has some good new features, such as a camera that actually takes decent pictures, video and sound activation. Price? $199 plus a two year contract with AT&T. That's the good news. The bad news is if you're an existing iPhone user and want to upgrade the price is... (wait for it) $599. In other words if you have been a good Apple/AT&T customer and want to buy the latest product you pay $400 more than someone who has waited until now. This seems crazy to me. They can clearly afford to sell the product at one price, so why charge existing users so much more? The argument is that if you haven't yet run down your old contract then you haven't yet given them the chance to recoup the discount they gave you on the phone you bought. But they ignored that fact when they launched the 3G. Therefore I can only assume that they don't really want existing users to switch. This also means that the iPhone's actually should retail at these crazy prices and the contracts are what bring the prices down. Even with this, surely an upgrade at some lower price could be justified by someone extending their existing AT&T contract by two years. My headline says Apple must not want the business. This is probably unfair. In truth it is AT&T that control this part of the pricing. I really hope some common sense prevails though and that Apple and AT&T get together and change this policy.

Bing debuts and has a convert of sorts

Bing, the new Microsoft search engine has gone live. I have to confess I'm impressed with the way it works. It looks a lot different to Google, having the various reasons for searching shown on the left of the page. I used its travel functionality today to help out a family friend and it worked very well and certainly saved a lot of time compared to using several travel sites to book a flight. Interestingly I came across Bing because I tried to access Farecast.com and it took me in to Bing. This in itself is a clever move by Microsoft, given I searched on Farecast through Google as I wasn't quite sure of Farecast was the right name. I'll confess I'm now tempted to use Bing as my search engine. Being someone who has Google as a part of my toolbar will of course make that a bit harder in the short term. Of course I'll also be stuck with Google on my iPhone until Bing is offered there. So I'm a convert... sort of.

Q3 09 is the real test of price over value

Most US businesses wrote off the first quarter of '09. For some it was weak, for others it was horrible. By comparison Q2 for many was better. Not much better but better nevertheless. The real test will come in Q3. By Q3 they will have sold all the discounted inventory and will be trying to sell full priced products. For this to succeed we are going to have to see a shift in buyer behavior. Right now buyers have got used to discounts both at the consumer and B2B level, to the point where they struggle to make purchases of products they actually need unless there is some steep discount applied. This won't be helped by the fact that there will still be businesses in Q3 who are making sales just to keep themselves alive and not necessarily to make a profit. These businesses will continue to offer discounts even though it is only a matter of time before they go bankrupt. In the process they will create the impression that prices remain low. It is only once buyers start looking beyond price that things will really change. Price is after all a horrible metric for a product or service. We all know there is an implied link between price and quality. If high quality products continue to be sold at low prices it does lasting damage to markets. I read earlier in the week how high price hotel operators such as Four Seasons are keeping prices high so they don't do lasting damage to their brand, even though bookings are way down. This requires a great deal of nerve. They are also hoping that people don't try another chain that is offering discounts and end up staying with them. If high price products are heavily discounted it is hard to get people to pay a full price again. This is one reason the likes of Tiffanys don't want to see their products on places like eBay even in the good times. Right now consumers and business decision makers are being surrounded by price driven messaging rather than value driven messaging. Of course most companies don't want to play on price but once one significant player does, they all have to and then it's a fight to the bottom. This is where PR can play a big role in helping the economy. Getting buyers to appreciate the full value of a product or service and its brand are central to any turnaround. I know some will argue that there are other major factors such as consumer confidence. They'd be right but I'd argue that consumer confidence isn't something that even large companies can do a great deal to affect. The government has a huge role to play here and is why Obama has made such a big bet with his stimulus package. So when you are advising clients, do remember that campaigns that address the entire value proposition of a product, or service, is what this economy needs. That's true whether you are trying to help a client sell a system that costs millions, or a $500 net book.

Where did all the homeless people go?

I was in New York last week for a series of meetings. On the Monday night I was walking back to my hotel after dinner and found a dollar bill on the sidewalk. There was no sign of anyone who may have lost the bill so I picked it up and vowed to give it to the next homeless person I saw. I was in New York for two more days. I figured that would give me plenty of time to part with my find. I was wrong. The dollar bill traveled back to California with me before finally being handed over to a guy in a wheel chair outside the Palo Alto Starbucks. Now I'm pretty sure that the person who lost that dollar never would have thought it would travel 3000 miles so quickly.

Can a scandal save a newspaper?

The MP expense scandal in the UK has given the normally stodgy Telegraph a new lease of life at a time when print media of almost every kind is suffering badly. I wonder whether the scandal will have any lasting impact, or if in six months when the scandal has blown over, the paper will again see its readership dwindle. The scandal is huge and it's unlikely the paper, or any other for that matter, can match it any time soon. Plus the story doesn't show that newspapers are better than any other form of media. It is simply that they got the story. If the BBC had got the scoop it wouldn't have attracted any less interest. Indeed it may have had more. It could equally have been the story that could have made a blog a household name (if a blogger had been the person to expose the scandal). Sadly I can only come to one conclusion. This was a great piece of journalism but not one that will change the course of publishing history.

British MPs try their hand at crisis PR

The media in the UK has been full of stories about how British members of parliament have been making highly dubious expense claims. In response the leaders of the various parties have tried their best to seize the moral initiative and show a) how sorry they are and b) that they have a solution. What I find amusing about the solutions are that they all appear to end up costing the tax payer even more money (new committees providing oversight etc). I am puzzled that the media hasn't pointed this out. Indeed a smart party leader may suggest that the solution is instead funded by the MPs that abused the system. When ordinary people underpay their taxes they have to pay a penalty. So far the MPs don't appear to have offered a penny more than they took from the tax payers. Odd eh?

Murdoch plans to make online readers pay

On his quarterly call with analysts, News Corp chairman Rupert Murdoch said he intends to start charging people for access to their online content. He said the Wall Street Journal has proved it can be done. I wonder if he's right. Right now you can access most of the WSJ for free. As an iPhone user I can access a good deal of WSJ content using the WSJ app on the iPhone. Also if you Google any WSJ news headline on your PC you can often see the entire article without a subscription.

Aside from the fact that the WSJ is free to many people, I also wonder what happens when he tries to take his publications behind a subscription wall. I suspect many of his readers will opt for a rival publication that doesn't charge or for well written blogs. I also struggle to see the typical Sun reader paying a subscription. I know the news media business is struggling to find a profitable business model right now and that the subscrioptn model is an obvious place to look. I just don't see it working for mainstream consumer publications. I can see people paying a blanket subscription in the same way they might do for cabel TV or satellite radio but for that thye need a broad range of titles to be the equivalent of channels on these properties. Murdoch is no fool and has made some shrewd moves in the media business. Launching his own media channel on the web that you can subscribe to but which contains news media from both his print AND broadcast properties. Now that I can see working if the price is right.

Will PR Week be better online?

Yesterday PR Week (US) did a short interview with me for their upcoming feature on digital. They'd already done a longer phone interview. This interview was done to camera (a digital video camera). I have to applaud them for immediately embracing the new format for the publication. That said, it got me thinking about whether the new format will make the publication better or worse. It certainly has the opportunity to make the publication better. A richer set of content and more community building tools could make the publication a lot better. But what will really make the publication better is the content. By that I mean the conversations they start and pursue; and the insight and perspective they share from their unique position. If they get this right the community will engage and the publication will grow in stature. I'm sure we all have views on what that content may be and I hope we all take time to share our ideas with PR Week. We will all benefit from a strong trade publication but if we leave it to Haymarket, the publication has a far tougher task than if we all make the effort to share our feedback and offer suggestions on ways to make the publication better. Julia Hood has a lot on her plate right now as she guides the publication through this transition AND searches for a new editor. The more constructive we can be in our help, the easier her task and the better the industry will be.