Managing a crisis where everyone is affected

We often get involved in crises on behalf of our clients. These include events where products malfunction, or employees do something they shouldn't. Our task is to help manage the communications fallout and hopefully ensure the client's business doesn't suffer. The current swine flu crisis puts governments at the center of a horrible crisis. In most crises, there are certain parts of the population that are affected and a majority that aren't. That majority are the spectators and they react to the crisis as spectators. In the swine flu crisis there are no spectators. Everyone is a potential participant. This changes the dynamic considerably. It means we consume the information our governments and organizations like the WHO disseminate in a different way. We are not dispassionate or even rational. Instead we are concerned, cautious and emotional. We want to hear that we will all be fine but we also want to know what is going on in great detail. The latter, will of course create more fear than comfort. This leaves governments and health groups with a 'balance' challenge. How much do they say and how grim a picture do they create? This challenge is exacerbated in a pandemic situation where the media and Internet make it easy for us to see the difference between how say the Spanish are dealing with it versus the Americans. If one government paints a bleak view while another tries to keep people calm, the public is going to be confused and naturally skeptical of the communication they are getting. Getting governments to behave in a consistent manner is almost impossible as we have seen on issues such as global warming. This leaves the WHO as the one common mouthpiece in all countries. Again, however, the gap between what they say and a local government says will be consciously or subconsciously watched by people the world over. I don't envy the people handling this crisis it one that we are all watching and are all concerned about. I only hope the real crisis goes away and makes their jobs a lot easier.

WPP and Omicom post poor PR results for Q1 - why?

The two largest marketing services companies in the world, Omnicom and WPP, posted poor results this week for their first quarter activities. Both saw some significant declines in revenues and both pointed to weakness in their PR businesses. In normal times I'd take some pleasure in such results but in these times I don't. I'd prefer to see an industry that is proving resilient in this economy. Of course you could argue that the drop in PR sales is to be expected given the overall slump in the economy. You could also argue that PR is doing relatively well. Unfortunately in both cases, they made the opposite point - namely that PR was actually doing worse than some other disciplines such as advertising. This really makes me scratch my head. When marketing budgets are tight it doesn't make sense to spend on advertising versus PR. Every piece of data I've seen says PR is more cost effective than advertising. So why are some companies doing this? Here are the reasons I can think of:

1. Ad agencies are doing a better job of showing their digital credentials
2. Ad agencies are doing a better job of using metrics to show the effectiveness of their campaigns
3. Ad spend may have been committed in Q1 and therefore harder to cut than discretionary PR projects
4. Some businesses may have already cut advertising out of their mix, thus leaving PR as the only real choice
5. Of course it could also say something about their PR agencies versus their ad firms

Put another way I wonder whether the Q2 sales of these groups will be more revealing in terms of real trends in PR versus advertising. I guess we'll see.

PR Week doesn't make the industry better

The poll I ran on this blog, while hardly scientific and hardly shocking shows that most of you don't think PR Week makes the industry better (38% said it makes it better versus 61% who said it doesn't - I have no idea what the other 1% think). At a time when the industry needs help this is rather disturbing. PR Week does have some rivals in terms of trade press but it is the most visible and the best funded. The publication will be changing soon as a new editor comes in. One assumes that Julia Hood, who oversees the publication will use the change in editor to also change its direction. I for one would love to see the publication focus more on giving the industry an insight into trends in PR and what products and services clients are demanding and for it to worry less about telling us who won what account. While the latter is interesting it does little to advance the state of PR. Now some of this would require the publication to invest in proper research and give reporters time to write truly insightful features on say the impact of social media in a downturn for consumer companies.

I appreciate that what I'd like to read about in PR Week may not suit all the readers but I think the publication should start by asking itself some pretty basic questions such as: what role should PR play in business in the next five years and how different is that from the role it plays today? From answers to this and other questions it could then look at what needs to be done to help the industry get there. This needn't result in the publication simply being a cheerleader. It can still be critical and indeed it should be critical where the industry doesn't evolve as it should. What is clear though is that the publication needs to develop a clear voice on certain key issues, issues that are central to the future of the industry. Being a spectator may be fun but it does little to really help. At the end of the day PR Week is a part of the industry and holds a position that should enable it to help lead the industry forward. I'd love to see it take up that position because if it does it will benefit the whole industry and may even make itself a bit more money along the way.

The role of social media in decision making

Social media has a wider role than simply enable decisions but for PR people its role in decision making is critical. If social media influences the decisions people make then PR people need to influence social media. But we cannot, and shouldn't in my mind simply look at social media as an island when it comes to that influence. Instead we should look at where social media sits in the decision process and make sure we are therefore influencing all aspects of the chain. Below is a simplified version of that chain that I'm throwing out for others to develop further:

Stage 1: Information. This phase of decision making is the foundation upon which everything gets built. If certain facts, data and events are used as a foundation it will greatly influence the decisions that are made. Public Affairs practitioners are well aware of this and will often war on the facts that should form the basis of a topic.

Stage 2: Content. The content phase is where perspective, relevance and color are added to the information to make it clear why someone should be interested and to try and get people interested. This is the role of those in the media and of those in social media.

Stage 3: Conversation. This is where content is discussed, tested, shared and debated. This is where traditional media has struggled and where social media has claimed significant victories. Of course who shares content, the questions they pose and the additional facts/data they introduce are all relevant to the role these conversations have in decision making. Interestingly I'm struck by the fact that even in social media where conversations are meant to be open to all, they tend not to be. Bloggers will respond only to certain people, there are certain people who Twitter (The Twitterati) whose notes matter more.

Stage 4: Decision time.

Of course there will be subsets to the above and points in the chain where people will loop back to gain new information, add new perspectives and so forth. But if you think of this as a decision pyramid you can see that ultimately he stages of Information, Content and Conversation are what lead to decisions.

Anyway, I'd welcome people's thoughts on this decision pyramid concept. It needs a lot of work to be completed but I think PR people need to start to articulate to their clients or CMOs the role social media plays in a far better way than is done today. Social Media is not a separate area of comms it is critical part of the decision making process.

Goldman Sachs doesn't see a bonus in TARP

Goldman Sachs today announced strong first quarter earnings and its intention to raise $5Bn so that it can start to pay off its TARP funding. You have to wonder if the motivation to get out of TARP, is executive pay. Banking conditions haven't really improved much in the last month or two and almost all the banks have taken TARP money, so why the rush to pay back the government? It isn't as if banks with TARP money are considered inferior. The only conclusion I can draw is that Goldman Sachs execs hate to see the bank making such huge profits (they just made $1.8 Billion dollars in the last quarter) and not being able to pay out huge bonuses to themselves (I wonder how much profit they would have made if they'd been allowed to pay bonuses and salaries as they did before TARP?). Goldman will need approval from the regulators to pay back its TARP money. Hopefully the first real question they ask is: "Why do you want to pay it back so soon?" I also hope they listen really carefully to the answer. It would be a tragedy if Goldman Sachs paid back its TARP funding and then simply carried on as if nothing had happened. It would be an even bigger tragedy if that then resulted in them getting right back to where they were before the TARP funding.

The social media triangle

I noticed Andy Lark's latest tweet this morning, referencing his latest blog entry, which in turn referenced another blog entry. It occurred to me that the only thing missing here was a link to a Facebook page and then the social media triangle, as I'd like to call it, would be complete. It seems that one of the keys to doing good social media PR is to generate content on a blog or on a community site like Facebook and then link to it via another blog or community site and then top it off with a quick reference on Twitter for those of us who can't keep track of all the blog posts and Facebook entries people make these days.

What does strike me as interesting in this triangle is:

1. That there is no dominant blogging platform in the way Facebook dominates the community space
2. That Twitter is becoming a great way to quickly see all the social media content changes that people have made that may have value

Scobleizing Twitter

Robert Scoble made a name for himself as a pioneer in the blogosphere. At the time he was a Microsoft employee and he demonstrated how blogging could help large corporations have a more intimate dialog with parts of its customer base. Since he left to focus on being a blogger and general industry pundit he's been a man in demand, though he recently stepped down from his role at Fast Company 'to pursue a new venture.' Nobody can say that Scoble is a slouch when it comes to generating content. His blog seems to average three posts a day and his Twitter updates seem to occur every hour and often every few minutes, which brings me to my beef. Either Robert Scoble needs to eliminate 90% of his Twitter comments and turn them into blog entries, or he needs Twitter to create a longer format than 140 characters just for him so he can condense his updates and send them every few hours. As it stands when I open Twitter all I see are comments form him and the occasional comment from Brian Solis. Given Twitter also suffers from almost daily overloads I can't help but wonder how much of that is because of people like Robert Scoble. For those of us that like Twitter, please back off Robert - you're overloading the system.

Car industry needs PR

Context Analytics recently published a paper showing that for certain brands PR was way more effective than advertising. The brands most affected were those which had 'high involvement' products such as computers. High involvement products are ones where consumers typically do quite a bit of research before they make the purchase. I'd put cars firmly into that category and yet unless I'm blind I'd suggest that most car makers have done a pretty poor job on their PR. Instead they seem determined to convince people using TV adverts that they should rush out and buy their new vehicle. I'm of course basing this thesis on little real science. I did do a Google news search on major car brands and if you ignore all the bad articles about how deeply troubled the industry is, you see little that appears to be the result of a PR campaign.

A great example to me of a missed opportunity is Toyota's launch of the new Prius. The car doesn't go on sale until 'late Spring' but it is already on the Toyota website. Given how popular this car is I'd have expected there to be a lot of PR outside the traditional trade press. As yet I've seen nothing and as Prius owner (or Pious as a friend of mine calls them) I tend to notice when images of the less than attractive vehicle appear in the paper.

For the record then I'd strongly advise GM, Ford et al to forget their expensive ads and focus on getting the argument across using the media and social media. Assuming Context's study is accurate, they'll spend less and sell more.

Some people never learn

One of the Next Fifteen agencies just won a good piece of business. When the client called the losing finalists for the business, one of the firms was gracious and thanked the client for allowing them to take part and said they knew the agency they had chosen was a good firm but that they were obviously disappointed to lose etc. The other losing firm was much less gracious and told the client they'd made a bad choice etc. Guess how the client reacted? You got it. The client thought the first agency was professional and would certainly consider them for any future work. They thought the second agency was rude and arrogant and someone they'd never again consider.

This isn't the first time I've heard such a tale. In every case the agency that takes defeat badly suffers even more in the long run. Meanwhile the ones who are gracious keep doors open for the future. Is the lesson really that hard to learn?

To win you musn't lose

OK so that was an awful headline but the point I wanted to make is that in these unusual times PR agencies and for that matter a whole range of other consulting businesses, need to rethink the way they approach new business. If they want to win more business, they may well be better off pitching for less. This may sound rather illogical but my point is that right now it's not uncommon for the number of firms bidding on a piece of business to be double the normal size. This has happened in part because clients are being really risk averse and want to make sure they are getting the best 'value' but also because agencies are having a hard time saying 'no'. I'd urge agencies to start saying 'no' for several reasons:

1. They can commit resources to pitches they actually stand a chance of winning, instead of having to pitch anything that has a check book.
2. They will suffer fewer losses. A large number of pitches are predetermined during these times and many of the agencies taking part stand no real chance.
3. Staff will appreciate being set up to succeed rather than fail.
4. By saying no they will be teaching the clients that long agency pitch lists are not really needed
5. By saying no they will sometimes make the client want them even more. Forbidden fruit and all that.

So next time you are asked to pitch for a piece of business, ask whether this really is the right one. People can deal with failure in a growing economy without too much difficulty. Successive failure in a tough economy could demoralize some agencies. Pitch less, win more.

Eventually a story gets the attention it always wanted

Note the dateline on the story below. Click on the headline to see the full story as it appeared in ZD Net.

When will IBM buy Sun?
By David Berlind
April 8, 2002

When I interviewed IBM's software chief Steve Mills in February, he said something that has stuck in my head, and I couldn't figure out why. Now I understand: Mills was throwing down a gauntlet that could ultimately wrest control of Java from Sun.

What ever happened to....

I was struck this morning how quickly brands come and go and how easily brands get forgotten. I noticed a new type of search engine, thanks to David McCulloch who had tweeted about Kosmix. This reminded me about all the hype and then not so positive press that was generated around the launch of Cuil. Cuil was going to be the next big thing in search. It clearly isn't/wasn't. I struggled to remember its name and ended up on wikipedia trying to find out what it was called (it's hard to search for something that you don't remember the name of).

Kosmix has, rather sensibly, not tried to claim it will topple Google. This is good for two reason:

1. It would be a foolish claim for such a young product that is still in beta.
2. It seems to rely on Google for most of its searches. Indeed Kosmix would seem to aggregate a series of Google searches and organize them by media type etc. So if they were to kill Google, they'd end up killing themselves.

More seriously, I'm glad to see brands being launched with more realism at a time like this. The people that launched Cuil were ill advised and should have set more realistic goals. We all know that Google is less than perfect and that at some point someone will figure out a better way to deliver search but for now it is the leader by a mile. So if you intend to overtake it, you had better be pretty certain you have what it takes to do so before you start telling people that's your intention.

Transparency in a wiki world

Despite being in PR for a long time and despite having a tech bent, I was unaware until today of wikileaks.org, a site that publishes anonymous submissions and leaks of sensitive governmental, corporate, or religious documents, while attempting to preserve the anonymity and untraceability of its contributors.

The site is a great reference site for journalists, particularly those chasing political stories but I can also see how it will be used by PR people wanting to place controlled leaks. I can only imagine that companies will start to use this site to place leaks about their own business or products, but also leaks about the actions of competitors. Of course in true wikipedia style they don't make it easy for people to place leaks on the site that will stick but equally, a factually correct leak should stay posted.

American media finds its teeth at the wrong time

For years European journalists have felt that their American counterparts have given business and political leaders an easy ride. Since the meltdown in the financial markets, there has been a notable shift with today's NPR interview of the UK Prime Minister, Gordon Brown, by Steve Inskeep being a great example. Inskeep pushed Browne hard on a range of issues from the economy to Afghanistan. Interestingly Brown failed to answer almost all the questions. In short Browne came across badly. This is what the American public wants, right? Wrong it would seem. Yesterday on Marketplace (another program on NPR), show host Kai Ryssdal said they'd received many listener complaints that they were airing to much bad news. Put another way they'd been asking too many tough questions. I do understand the view that we don't want just bad news. But I'm pleased to see the American media finding its teeth. When the economy improves the American public will appreciate it.

The flight to (apparent) safety

The old expression "nobody gets fired for buying IBM," is now at play in the marketing arena. In recent weeks several large companies have elected to put their business out to pitch. Their selection criteria would not appear to be based on which ideas will make the biggest difference to the business, or who has the best consultants available to work on their business. Instead their criteria would be appear to be blunt scale and apparent price. Of course this is something of an oxymoron as large agencies typically charge higher hourly rates and typically over charge. In terms of programs these firms tend to offer fairly bland campaigns that are big on planning and short on delivery. Interestingly it is at times like this that firms need the opposite. They need PR people that are creative and who love to get their hands dirty. In short they need results.

So why do big companies take this path? At one level it does make sense. Procurement departments love this kind of deal. For a start they can be seen to centralize a contract and get their hands around the terms in a sensible way (at least it is to them). At the same time, agencies sell the idea of lower cost and better integration. In practice any cost saving tends to translate into worse results. At the same time, the hiring of a large agency tends to result in a more detached agency relationship. Smaller, more agile agencies are full of practitioners that love the craft of PR and will give their all to the task, not just the hours they are obliged to provide within the contract.

Small and mid-sized agencies will likely suffer during the next twelve months as some large companies run for the apparent safety blanket offered by large agencies. In time they will learn what they learned in better economic times - that they need an agency, or agencies that can really engage with their different business units and can make a real difference to their success. Sadly it seems that for now though the smaller agencies will have to sit tight and focus on smaller clients that understand the difference between price and value.

Long range planning in a short term economy

I'm headed to the TED conference today. This is one of those events that challenge you to think about the bigger picture and beyond the immediate horizons of financial quarters or even years. This year, more than ever, the conference will have its work cut out to achieve that. With so many businesses caught up in the immediate economic challenges, I suspect it will be tougher to get the CEOs attending to put aside the pressures of their day job and explore some of the mind bending content TED presenters usually put forward. Of course this may actually be just what some of these people need. It is all too easy for business leaders to get caught up in the immediate challenges they face and to forget about the long term destination. Some will argue that when a ship is sinking the captain should worry more about keeping it afloat than which port they were headed for. I'd agree but I'd also argue that most people's ships are not sinking; they are simply battling tough conditions. The captains who can remind their crew of the benefits of reaching the destination and who are able to step back and perhaps use the difficult conditions to actually help them reach the destination will be the real winners. I say all of this, not to encourage a round of navel-gazing by business leaders at a time when they do need a firm hand on the tiller but to make sure we also remember that in times of difficulty the importance of having the right destination shouldn't be ignored. Missions and visions are not the monopoly of good economies after all.

BBC won't show Gaza fund raiser

The BBC has made headlines in the UK for refusing to give air time to a Gaza fund raiser. The dispute has generated headlines for days now. Ironically I suspect more people now know about the fund raising than would have done of the BBC had aired it in the first place...

Obameter

Yesterday was quite a remarkable day. Millions of people around the world watched Obama become President. At the same time the media tapped into the interest by producing special editions of newspapers and day long TV and radio coverage of the event. This prompted me to ask several people if they remembered George W Bush's inauguration. The answer was of course - NO. By any standard the Obama inauguration was a world leading event. But then by any measure Obama is probably the best known person on the planet right now. I suspect he has overtaken all manner of celebrities and sports stars in terms of name recognition. How long will all this Obama-mania last? My guess is that we will be able to tell when his star power has lost its luster when we stop seeing Obama bumper stickers. Right now when you drive around it is as if the election is still pending for Obama, while all the McCain stickers are long gone (not that there were that many in California). So keep an eye on the Obameter as I'm calling it. When you don't see more than five stickers in a thirty minute drive the Obameter may well be showing that Obama is not quite so popular. For now though the Obameter is at an all time high.

Is client conflict less of a problem in a recession?

Apparently some clients are worrying less about client conflicts these days. I heard of two cases recently where clients are turning a blind eye to conflicts that a year ago they'd have made a huge deal about. One involves two major PC manufacturers that are both working with the same agency in China. The other involves major players in the anti-virus software market who are again using the same agency, this time in the US. I take my hat off to the agencies involved for persuading the clients that it is OK. I for one have long believed that with effective Chinese walls, clients should be able to work under the same roof albeit with totally different teams. Many large companies have taken a different view. I'm therefore encouraged to see this attitude changing.

The uneven nature of a downturn

All recessions are not created equal that's for sure. While it is pretty clear that many businesses are feeling the effects of the global recession that is upon us, some are feeling it more than others. Sector to sector comparisons are obvious. I'd rather be in the technology business than the car business for example. However, even within sectors there are businesses that seem to be doing relatively well, while others in the same sector are crashing and burning. Some are losing because they are selling the wrong product and some are losing because they have the wrong customer base. Some are losing because they do all their business in one country, while others are winning for the same reason, they simply operate in a different country. The reasons why people are winning and losing can be due to good or bad management, or down to history. The physical markets people are in were decided a long time ago in many cases - long before the financial markets crashed and took the economy with them.

All of this unevenness (is there really such a word?) makes for some interesting management challenges. For example the cost of leaving a market can be higher than the short term savings achieved by getting out. Equally, changing your customer base isn't easy when markets are like they are right now. Put another way it is hard for executives to marry the short term financial goals of a business, with the right long term business goals. As a result, I would expect some pretty lumpy performance from companies in the next year or two. This isn't what financial markets like but for many companies it will be unavoidable. The most important thing is that businesses run their businesses profitably and conserve their cash during a period like this. It is then also important that they learn from this recession. Recessions expose the weaknesses of a business. Ignoring those weaknesses is perhaps the worst mistake a management team can make. All business leaders hate recessions but they are a great test of you and your team and of the business you are running. How well you do is interesting. How much you learn from the test and apply to your business is really important.