Sub Standard: Subway pitchman Jared Fogle says Nintendo was the primary reason for the weight gain that preceded his now famous 200 lb weight loss. Which makes me wonder why he's picking on McDonald's and the other "burger joints" in his current campaign.

That's not an entirely frivolous question. Jared worked in his early ads because he seemed authentic, talking about the way Subway helped him slim down. But now the company has him in attack mode, sneering at people who haven't joined the sandwich cult. Where once he seemed natural, he now sounds scripted and false. He's no longer an ordinary guy telling his own compelling story; he's just another paid spokesman saying whatever words the company puts in his mouth.

Japanese Mad Again About U.S. Cows: The stubborn refusal by American cattlemen to allow rigorous testing of U.S. beef has come back to bite the industry in the posterior once again, with the news that Japan has once again blocked imports from the States. The decision—just weeks after Japan and several other Asian countries lifted a ban that has been in place since the discovery of mad cow disease in the U.S. in December of 2001—came after the Japanese discovered an American company was shipping them beef containing the spinal columns of veal, believed to pose a risk of mad cow disease.

The National Cattlemen’s Beef Association, the premier trade organization for beef producers, has been steadfast in its opposition to the kind of safety tests that have become routine in Asia and Europe and almost every other beef producing country, and has even prevailed upon the USDA to threaten legal action against U.S. beef producers who seen to ensure the safety of their own supply.

Producers point out that there have been just three reported cases of mad cow in North America in recent years. Critics suggest the number is so low only because the U.S.—unlike other countries—tested only 175,000 of the 36 million cattle slaughtered in 2004.

If companies are allowed to conduct their own, more rigorous, tests “we think it would become the international standard and the domestic standard, too,” said NCBA president Jan Lyone at the time. “But it’s a standard that’s not based on science, would be very expensive and so is something our government definitely needs to resist.” Needless to say, there is no scientific reason not to test more cows: this is a commercial argument—or at best a value judgment—disguised as science.

The thing is, the refusal to meet international standards is costing beef producers money. Japanese imports in 2003 were worth $1.4 billion.

Good Publicity: The Economist takes a look at the public relations industry (U.K. media tend to take PR more seriously as a business, while remaining far more skeptical than their U.S. counterparts about its output) and comes to the conclusion that the future looks pretty good.

PR, the mag says, is “an increasingly vital marketing tool—especially as traditional forms of advertising struggle to catch consumers’ attention.” Exhibit one is the Procter & Gamble study showing that PR provided a better ROI than traditional advertising—research that may lead the company to redirect some of its $4 billion ad budget.

But to put that in perspective, the magazine draws on a study by Veronis Suhler Stevenson, a New York investment bank, which estimates the total size of the PR industry at $3.7 billion (ie, slightly less than P&G’s ad budget). The good news is that PR spending will grow at almost 9 percent a year over the next few years and should top $5 billion by 2009.

ADD: Reader Constantin Basturea provides a link to the full Veronis Suhler report here. Not sure why I didn't see this when it was released. Presumably my bad.

More Payola: 2005 began and ended with scandals about government bribing reporters for favorable coverage (Armstrong Williams and half the Iraqi media respectively). This year is beginning with evidence that corporate clients can play the corruption game too. The New York Times reports that ousted HealthSouth chief Richard Scrushy -- who somehow persuaded a jury to find him not guilty of fraud last year -- paid a reporter who turned out sympathetic stories $11,000 via his "PR" firm, The Lewis Group.

Just to make things nicely complicated, the PR firm is owned by Jesse J. Lewis, Sr.; the newspaper in which the articles appeared is edited by his son James Lewis; and the reporter who received the payments is Audry Lewis.

Needless to say, everyone is denying wrong-doing.

Is the Post Being Spun?: The Washington Post is caught up in a nasty tussle with the progressive blogosphere over its repeated attempts to portray the Jack Abramoff story as a bipartisan scandal. In particular, the Post has reported that a number of Democrats, including Senate Majority Leader Harry Reid (Nev.) and Sen. Byron Dorgan (N.D.), have gotten Abramoff campaign money. In her column this week, Post ombudsman (the person supposedly responsible for policing erroneous reports) Deborah Howell repeated the claim that Abramoff "made substantial campaign contributions to both major parties."

That's either deliberately misleading or terminologically inexact to the point of being obtuse. Abramoff gave money exclusively to Republicans. If Howell is trying to say that Democrats received money from clients of the disgraced lobbyist, that's true. But if the implication is that Abramoff influenced donations to Democrats, it would be nice to see some evidence.

Right now, the facts suggest otherwise. The Saginaw Chippewas, for example, gave less money to Democrats after retaining Abramoff than they did before, while their donations to Republicans increased threefold. That makes it sounds as if they were giving to Democrats despite Abramoff rather than because of him, which makes it difficult to see how the Post can call those donations "Abramoff money."

Metric System: KDPaine has a great guest column by Pat LaPointe on marketing metrics. It's a little dense, but makes some critical points,such as why profitablility metrics are superior to revenue metrics.

Pod People: Ernie Landante is running a series of podcasts at his blog, and just added is a chat with litigation public relations guru Richard Levick. Keep an eye out for such luminaries as Charles Fombrun in future podcasts.

Finger-ed: Anna Ayala, who with the aid of gullible journalists sought to extort money from Wendy's after allegedly biting into a human finger in a bowl of chili, is sentenced to nine years. It remains inconceivable to me that the reporters who told her story to millions--and cost Wendy's a small fortune in sales--did not know from the outset that this was a hoax.

The Benefits of Disclosure : Walter Carl has posted his research report on the effect of disclosure on word-of-mouth marketing campaigns, and while I have only had time to read the summary it appears to support the case for transparency.

Among the key findings:

"For approximately 75 percent of the conversational partners (the people with whom the word-of-mouth marketing agents engaged in word-of-mouth communication) it did not matter that they were talking with someone affiliated with a marketing organization. Instead what mattered was that they trusted the agent was providing an honest opinion.

"None of the key outcome metrics (credibility, inquiry, use, purchase, and pass-along/relay) were negatively affected by the agent disclosing their affiliation.

"For about 5 percent of the conversational partners who were not aware of the agent’s affiliation with the marketing organization there was a negative 'backlash' effect when they found out.

As for the conclusions:

"Disclosure has practical business benefits. It does not interrupt the 'natural' flow of conversation.Word-of-mouth marketing organizations should adopt a clear policy that requires disclosure.

"This policy should be implemented with a combination of both education about the practical business benefits of disclosure as well as enforcement procedures."

All Marketers Are Liars: That’s the title of a best-seller by marketing guru Seth Godin, and it came into my mind as I read about Oprah’s response to the fact that her book club pick A Million Little Pieces by James Frey was a work of fiction rather than the memoir it claimed to be.
In his book, Godin asks whether it matters that the $80,000 Porsche Cayenne and the $36,000 VW Touareg are “virtually the same vehicle, made in the same factory?” His conclusion: “The facts are irrelevant. In the short run, it doesn’t matter one bit whether something is actually better or faster or more efficient. What matters is what the consumer believes.”

To let Porsche off the hook, he comes up with a theory that shifts the blame to those being lied to. “Marketer’s aren’t liars,” he says. “They are just storytellers. It’s consumers who are liars. As consumers we lie to ourselves everyday…. Successful marketers are just the providers of stories that consumers choose to believe…. I think that once people find a remarkable lie that will benefit them if it spreads, they selfishly tell the lie to others, embellishing it along the way.”

So Frey and Oprah and Doubleday (the publisher) didn’t lie to us, we lied to ourselves. Yeah, right.

Frey lied. Oprah—whose own credibility is at stake—then went on national television to endorse that lie and explain why it didn’t matter. And Doubleday insisted that “the power of the overall reading experience is such that the book remains a deeply inspiring and redemptive story.”

But if we’re looking at marketing wisdom, I far prefer “your brand is a promise” to “all marketers are liars.” Frey and Oprah and Doubleday all broke their brand promises.

ADD: Just came across this (it's hidden behind the "Times Select" barrier, which I rarely breach), but it's a hilarious parody by The Daily Show's Tim Carvell.

Quote of the Week: One institution that didn't benefit from Jack Abramoff's largesse was his alma mater Brandeis University, which received a grand total of $5o from the disgraced lobbyist, back in 2002. According to Nancy Winship, "The [donation] wasn't used for anything problematic, and we have no relationship with him. The $50 was not given to us to pressure us to do anything." Some of Winship's other quotes are pretty pithy too.

Hate Group Targets Microsoft, HP: There's a fundamental (no pun intended) difference between lobbying a company to provide somthing for a stakeholder group and lobbying a company to stop providing the same thing to others. If religious bigots like Ken Hutcherson were pressing Microsoft and HP to support a civil rights bill that granted Christians freedom from employment discrimination I wouldn't protest. But Hutcherson is trying to persuade those companies (and Boeing and Nike and others) not to support a Washington state bill that would grant such freedoms to gays and lesbians. Kudos to those companies for sticking to their principles.

Pundit Payola: Most of the mainstream media coverage of the latest payola scandal has focused on ethically-challenged commentator Michael Fumento, perhaps because people expect corporations to behave cynically and buy whatever advantage people are prepared to sell them. But what of Monsanto’s ethical obligations?

If companies are seeking to buy favorable editorial coverage, they are corrupting the media (a violation of the PRSA’s Code of Ethics) and should desist. If there is no intent to corrupt, then they need to remove all doubt about their motivation by insisting in their contracts that commentators disclose any and all financial ties.

In this case, Monsanto should have insisted that Fumento disclose his funding from the company any time he wrote about the biotech sector, in order to protect Monsanto’s reputation; failure to do so should have resulted in a return of the grant as well as the loss of his job.

Cell Out: In the past, this might have been a 24-hour crisis, a one-off story that required an immediate response but was quickly forgotten. But the Internet age has changed the rules, and the echo chamber of the blogosphere can make sure a story that resonates is amplified and repeated until it becomes a major embarrassment.

On January 5, the Chicago Sun-Times revealed that the “Chicago Police Department is warning officers their cell phone records are available to anyone—for a price. Dozens of online services are selling lists of cell phone calls, raising security concerns among law enforcement and privacy experts.” It was not clear how those lists were obtained, and no one from a major telecom company was quoted in the story.

The story was picked up two days later by blogger John Aravosis of the popular progressive AmericaBlog, who left readers in no doubt who he thought was to blame: “The phone companies. There is no way that these online services are outright stealing this information, if they’re able to get in just a few hours consistently. They’ve got access to the info, and from the reading I’ve done it seems the cell and land-line companies are selling our info for profit.”

On January 8, another blog, Democrats.com, offered to buy the cell phone records of leading Republicans: “The Bush administration, the Republican Party and the conservative movement all think it’s perfectly OK for Big Brother Bush to spy on Americans… We can turn the tables and start spying on them—thanks to commercially available phone records.”

By now, Aravosis had come across a quote in a Washington Post story in July of 2005—six months earlier—in which Cingular spokesman Mark Siegel described the acquisition of cell records as “‘an infinitesimally small problem.” Outraged that Cingular—his phone company—had known about the problem for six months and taken no action, he “clicked my mouse and got the private phone records of one of your customers within hours, and with no effort.”

On January 10, Aravosis posted Cingular’s woefully inadequate response to a reader who complained about the fact that his cell phone records were for sale. “Cingular Wireless does not release our customer’s information to any paid listing. Please review our privacy procedures… I hope this addresses the concerns you have.” It didn’t.

So Aravosis stepped things up a notch. He contacted one of the companies selling cell phone records and bought the phone record of General Wesley Clark, former supreme allied commander of NATO and Democratic presidential candidate. “All we needed was General Clark’s cell phone number and our credit card, and 24 hours later we had one hundred calls the general made on his cell phone in November. The calls included a number of calls to Arkansas, to foreign countries, and at least one call to a prominent reporter at the Washington Post…. The only question now remaining is why President Bush, our leaders in Congress, and our wireless phone companies (at the very least T-Mobile and Cingular, whose customers’ records are available online to anyone) have known about this problem for at least six months but have yet to fix it.”

The next day, January 13, the Sun-Times returned to the issue with a story headed: “Blogger buys presidential candidate’s call list.” The article quoted Clark: “When I learned today that my phone records were purchased for less than a hundred dollars I joined millions of Americans who worry about the invasion of their privacy that seems to be the growing price of technology. People should be able to trust that their privacy is being respected and protected by everyone from the government to our internet and mobile phone service providers. Clearly, this is not the case.” Again, the story contained no comment from any telecom company spokesperson.

A story in the Atlanta Journal-Constitution did, however. Cingular’s Mark Siegel (the same spokesman who six months earlier had described the problem as “infinitesimally small”) told the paper’s reporters that his company “isn’t aware of any complaints from users who’ve had their records given out,” a comment that is hard to reconcile with the postings on AmericaBlog.

Later the same day, Cingular issued with a press release, saying it had secured a restraining order against “companies involved in the theft and sale of cell phone records.”

And by January 15, when New York Newsday published an article reviewing the story so far, Cingular had clearly decided the issue was worth taking seriously. Siegel told Newsday that customer’s cell phone records can only be released to the customer or to law enforcement. “No one else is entitled to these records, the businesses who try to get them are committing a kind of identity theft which we’re calling ‘records rip-off,” he told Newsday.

Some quick thoughts:

1. Cingular sat on this for at least six months without any action. If the company had acted when it first learned of the problem, it could have portrayed itself as a victim. As it is, it was clearly negligent when it came to protecting its customers’ private information.
2. The company seems to have either missed or ignored the story as it picked up steam on the blogs. As far as I can tell, no one contacted Aravosis, the reporter who advanced the story most aggressively. It was only when the mainstream media got involved that Cingular acted.
3. Customer service people are your first line of PR defense. The response in this case—which reads like a form letter—showed zero awareness that the company’s reputation was threatened.

One more thought: Al Gore yesterday, in a blistering attack on the Bush administration’s warrantless wiretapping, demanded that telecommunications companies “that have provided the government with access to private citizens without a proper warrant should cease and desist participation with the complicity in this.” This issue is not going to go away.

Some Things You Just Can’t Spin: Business Week reports that “The Bush Administration has gone into public-relations overdrive to talk up the good economic news.” I’m always happy to hear about organizations going into public relations overdrive, but I can’t help thinking that this is one of those campaigns that’s based on the question “Who are you going to believe, me or your lying eyes?” And old jokes notwithstanding, most people are likely to believe their own experience than what a politician is trying to tell them.

And what is that experience? Median household income peaked in 1999 and has fallen every year since and median income for non-elderly households is down by about 5 percent, or a little more than $2,500 over the last four years. Also, since 2000, 5.4 million more people—including 1.4 million more children—have fallen below the poverty line. At the same time, family debt has risen by more than 35 percent over the past four years; people are being asked to pay a higher portion of their healthcare costs; and many companies have terminated or plan to terminate their pension plans. In other words, most ordinary Americans have less money coming in, more money going out, and see a long-term future that is far less secure than it was.

A CBS News poll conducted in early January found that just 20 percent of Americans think the economy is improving, while 37 percent believe it is worsening and 43 percent say it is unchanged. The fact is, they’re probably all right. For the top 20 percent of earners, things have gotten better (as of 2004, the top 20 percent held more than 50 percent of all income). For those in the middle, not much has changed. But for the bottom third, things have been getting steadily worse. And no amount of PR is going to change that.

Practical How? According to this Business Week article, Michael Fumento insists that disclosure of financial transactions between op-ed columnists and the companies they cover wouldn't be practical. Is that impractical as in adding a line that says “I took $60,000 from Monsanto” would be too onerous? Or is that impractical as in “Monsanto wouldn’t send me any more money if I told people about it?” Oh yeah, and he says he’s a victim of a “witch hunt” too.