Holmes Report Blog

The Holmes Report blog focuses on news and issues of interest to public relations professionals. Our main site can be found at www.holmesreport.com.

Saturday, May 20, 2006

Taste Buds?: German beer lovers are lamenting the fact that the only brew available at upcoming World Cup games will be Budweiser, which doesn’t even meet the German definition of beer. Budweiser will be the only beer available inside World Cup stadiums, which means German and other discerning beer drinkers will have to choose between Bud and water—assuming they can tell the difference, for which they would need more refined taste buds than I.

According to this report in the Times of London, one Bavarian politician described Budweiser as “the worst beer in the world,” which suggests that he’s never been asked to endure a pint of Bud Light.

Look, I despise Budweiser as much as the next self-respecting European, but all of this anger is misplaced. Don’t blame Budweiser, which put up $4 million to sponsor a game most of its executives don’t even understand. (It actually runs a very nice, self-deprecating ad campaign built around this American cultural isolation in the U.K.) Where was Heineken? Or Carlsberg? Or Giuinness? They all had a chance to be part of the world’s largest sporting event—trust me, the Olympics are a very distant second—and passed.

Blame them, not Bud, if you can’t find a decent drink in Germany this summer.

Friday, May 19, 2006

Wal-Mart and Poverty: A new study has found that Wal-Mart makes Americans poorer. Cynics may complain that they didn’t need any new research to tell them something so blindingly obvious, but this analysis by Stephan Goetz, a professor of agricultural and regional economics at Pennsylvania State University, and Hema Swaminathan for the International Center for Research on Women, was published in the latest issue of Social Science Quarterly, and seems—on first appearances—quite robust.

During the last decade, dependence on the food stamp program nationwide increased by 8 percent, while in counties with Wal-Mart stores the increase was almost twice as large at 15.3 percent, according to the study.

Perhaps the most interesting finding: “The demise of mom-and-pop stores leads to the closing of local businesses that supplied those stores, such as wholesalers, transporters, logistics providers, accountants, lawyers and others. Many of these are higher-paying jobs. The study concludes that it is likely that these more highly-educated individuals depart from the rural community in pursuit of better opportunities elsewhere, contributing to the rural-to-urban exodus over the last decade, leaving behind those with fewer opportunities and raising the poverty rate.”

Tuesday, May 16, 2006

Wal-Mart's Friends & Family: Wal-Mart is calling on its suppliers to help it address its image problems, according to a report in The New York Times.

Given that the report is the handiwork of Michael Barbaro, who wears his anti-Wal-Mart agenda on his sleeve (he broke the shocking story that Wal-Mart sends information to bloggers as well as mainstream reporters) I’m inclined to take much of it with a pinch of salt, but it does provide an opportunity to talk about coalition-building and corporate grassroots.

The Bentonville behemoth is inviting suppliers to join a group called Working Families for Wal-Mart, which describes itself as autonomous, despite the fact that (according to Barbaro) half of its steering committee members have business ties to the company and Wal-Mart provides “significant financial help.” Barbaro reports that many suppliers feel the company put “improper pressure” on them to join the group, although the quotes he provides do not appear to support that contention.

Having said that, I think companies need to be exceptionally careful when it comes to creating groups with names that include “Citizens” or “Families” or “Americans” for Whatever. All too often, such groups are mere fronts for the corporation, their titles justified by the fact that, hey, the CEO and PR director of the companies are citizens, they have families, and are all American, so there’s nothing really dishonest about the name, is there?

There is a difference between genuine grassroots—and yes, there are genuine grassroots groups that support corporations, like the pro-animal testing group launched in the U.K. earlier this year—and Astroturf in this context, even if the line between the two is not as sharp as some would like.

To figure out which side of the line a group is on, there are several questions worth asking: Was it formed spontaneously by employees, customers or suppliers, or was it instigated by the company? Would it continue to exist without company funding? Do most of its members come from outside the company management structure? Do most of its members make a financial contribution to the group? Are they allowed to vote on the group’s leadership? Is the group free to take positions that vary from the official positions of the company?

If the answer to most of those questions is no, it seems to me you’re dealing with a front group rather than a genuine grassroots organization. And if the answers to those questions are not readily apparent or available, you’re definitely dealing with a front group. That’s not to say its views should not carry any weight—even front groups can represent legitimate points of view—but it does mean that it should be treated as an extension of the company’s PR department, not as an autonomous entity.

Sunday, May 14, 2006

Unlikely Hero: Joseph Nacchio, the former CEO of Qwest who currently faces insider trading charges in connection to a fraud that almost sunk the Denver-based telecommunications company, is emerging as an unlikely hero in the phone records scandal.

According to a statement by Nacchio’s lawyer, after the government’s first approach in the fall of 2001, “Mr. Nacchio made inquiry as to whether a warrant or other legal process had been secured in support of that request. When he learned that no such authority had been granted, and that there was a disinclination on the part of the authorities to use any legal process,” Nacchio concluded that the requests violated federal privacy requirements “and issued instructions to refuse to comply.”

The fact that Nacchio, an accused fraudster, has more courage and integrity than the CEOs of AT&T, Sprint and Verizon speaks volumes about the state of business ethics today.
Quid Pro Quo: The conspiracy-minded are already beginning to wonder what the telecommunications companies got in exchange for selling out their customers, and are not surprisingly inclined to wonder whether the end of “net neutrality” might be their reward.

The debate over “net neutrality” has not gotten a lot of play in the mainstream media, but it’s a major issue for anyone with a website or, indeed, an Internet connection. Net neutrality ensures that all Internet users can access the content or run the applications and devices of their choice, without restrictions or penalties. With Net Neutrality, the network’s only job is to move data. It’s a big part of the reason why the Internet has driven economic innovation, democratic participation, and free speech online.

But the nation’s largest telephone and cable companies—including AT&T, Verizon, Comcast and Time Warner—are lobbying for the right to decide which websites go fast or slow and which won’t load at all. They want to charge content providers to guarantee speedy delivery of their data, and they want the right to discriminate in favor of their own search engines, Internet phone services, and streaming video, while slowing down or blocking their competitors.

As the website Save the Internet puts it: “These companies have a new vision for the Internet. Instead of an even playing field, they want to reserve express lanes for their own content and services—or those from big corporations that can afford the steep tolls—and leave the rest of us on a winding dirt road.”

Without Net Neutrality, in other words, the Internet will look more like cable TV. Network owners will decide which channels, content and applications are available; consumers will have to choose from their menu. It’s an approach designed to stifle innovation and—potentially—squeeze out dissenting voices.

The conspiracy-minded—and it’s hard not be among them given what’s going on right now—see a perfect symbiosis: the government gets access to your phone records; in exchange the telecommunications companies get the right to discriminate against certain websites and web users.