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.

Thursday, June 22, 2006

One Word Equity: Lord (formerly Maurice) Saatchi bemoans the “death of modern advertising” in an op-ed contribution to the Financial Times. And he’s live online today, too.

"At the age of only 50, advertising was cut down in its prime," he says. "Advertising holding companies used to boast about their share of the advertising market. Now they are proud of how much of their business is not in advertising. How did this happen?"

Most of his answers are familiar: social changes (families no longer sit down to watch TV together) or technological (too many alternatives)—external factors over which advertising people had (and have) no control.

So what’s the solution? “A new business model for marketing, appropriate to the digital age. In this model, companies compete for global ownership of one word in the public mind…. to define the one characteristic they most want instantly associated with their brand around the world, and then own it. That is one-word equity.”

For example, the word “search” is now owned by Google, he says. For 20 years, “favourite” was owned by British Airways. Sony used to own “innovation”, but that word has probably now been taken by Apple.

“The challenge is to find the word, the word that guides everywhere. And once it is found, never to forsake it.”

I’m not sure Saatchi’s insight—even if you buy it—solves advertising’s problem, though. Companies won’t own a word just by repeating it over and over in paid commercial messages. They’ll own it only if consumers decide the own it. Companies aren’t in charge of their brands any more, consumers are. Advertising may help them reinforce ownership of a one-word positioning, but it can’t establish that positioning.
From CSR to PR: Ethical Corporation magazine takes a quick and slightly superficial look at the success (or otherwise) of individuals from the activist world who have made the jump to the PR business, usually working in CSR practices.

Often accused of being “poachers turned gatekeepers,” these individuals have enjoyed mixed success, the magazine concludes, pointing out that Bennett Freeman—hired by Burson-Marsteller a couple of years ago—recently left to join social investing powerhouse Calvert. But it also profiles Brendan May, who appears to have found a happy home at Weber Shandwick.

The conclusion: “For PR consultants to retain their corporate social responsibility consulting credibility, with other clients and client audiences, they must reserve the right to refuse work with recalcitrant companies…. A responsible PR person should demand one condition from their client: that they have a willingness to engage, and are prepared to change as a result.”

Wednesday, June 21, 2006

The Negative Consequences of Negative Advertising: Years ago, when Perrier was reeling for claims that its source was contaminated with benzene, I got a call from a reporter at one of the big national newspapers—either the Times or the Journal, I don’t recall—who wanted to know why the other bottled water companies weren’t using their advertising to capitalize on the market leader’s misfortune. I said I didn’t think it would be particularly smart for a bottled water company to run ads questioning the purity and safety of bottled water.

Now along comes a report from John Zhang, a Wharton marketing professor, who warns that using ads to attack your competitors is usually counterproductive. “Instead of pulling consumers to an advertiser, [combative ads] may just make people indifferent to all offerings in a product category. And that, in turn, can lead to lower profits for everyone as businesses cut prices to lure these buyers.”

Negative ads work well in politics because it’s a zero-sum game. If you and your rival start out with 50 percent of the overall vote and attack each other relentlessly for six months, you can win by driving down your opponent’s share of the vote to 20 percent, even if he drives down your share to 21 percent. But the same approach in the market for products and services would mean significant losses for both parties.
Why I Hate Paid Product Placement: An optimistic post by Steven Silvers reminds me how much I dislike product placement, at least in the form it is practiced by most companies and most movies/TV shows.

Silvers believes that the golden age of product placement has already passed: “The fact is that product placements and “paid media” are just advertisements pretending to not be advertisements. The more ubiquitous they become, the more certain that social responses will negate much of their marketing value.” He also warns of possible regulation, citing a speech by FCC commissioner Jonathan Adelstein last year.

I would distinguish between two forms of product placement. One is earned product placement, which involves a product finding its way into the script organically, because it is appropriate to the character and the story. Think of the Aston Martin in the Sean Connery-era Bond movies. It was there because it told you something about Bond, his tastes and lifestyle and personality.

But that kind of product placement has been almost entirely replaced by paid product placement. Almost all of the products you see in the next Bond movie will have paid to be there. Their presence tells you more about the brand and its aspirations than it does about the character—unless you count the fact that Bond’s charisma is now for sale to the highest bidder.

Paid product placement depends for its effectiveness on deception. The more the viewer believes Bond would really drive a particular car or use a particular laptop, the more effective the placement is. But if a viewer understands it for what it really is—if there is full transparency—it is rendered meaningless, or at least no more effective than any other paid celebrity endorsement.

Of course, disclosure is currently both obscure and incomplete, usually involving a “The following have provided…” list included in the movie credits, visible for about 5 seconds to those too lazy to leave their seats once the action has ended. It’s a long way from the kind of transparency that I’d like to see, and there is definitely a case for regulatory action to insist on improved labeling.

Tuesday, June 20, 2006

FT on PR Measurement: The FT takes a look at public relations measurement. The article raises questions that will be familiar to practitioners, and it doesn’t offer any new answers. It’s interesting because it’s so hard to imagine a U.S. newspaper providing serious (as opposed to snide) coverage of the same issue.

Monday, June 19, 2006

Phone Fun: Gotta love Verizon. Those of you who have tried to call my New York office today will know that the number is temporarily disconnected. Why? Because whoever rented my office space before me didn’t pay his phone bill. What does that have to do with me? Damned if I know. But I guess since they can’t find him they’ve decided to take it out on us.
Guess I'm Not the Only One Who Hates the New Apple Ads: Slate advertising columnist Seth Stevenson takes a look at the new Apple campaign—the one in which two actors, representing a Mac and a PC, discuss their relative merits against a stark white backdrop—and comes away unimpressed.

While conceding that the ads are striking and memorable, Stevenson says they “don’t work on me. They are conceptually brilliant, beautifully executed, and highly entertaining. But they don't make me want to buy a Mac.”

His problem is with the two characters. The guy representing the Mac “is just the sort of unshaven, hoodie-wearing, hands-in-pockets hipster we've always imagined when picturing a Mac enthusiast. He’s perfect. Too perfect. It's like Apple is parodying its own image while also cementing it. If the idea was to reach out to new types of consumers (the kind who aren't already evangelizing for Macs), they ought to have used a different type of actor.

“Meanwhile, the PC is played by John Hodgman—contributor to The Daily Show and… all-around dry-wit extraordinaire. Even as he plays the chump in these Apple spots, his humor and likability are evident…. The ads pose a seemingly obvious question—would you rather be the laid-back young dude or the portly old dweeb?—but I found myself consistently giving the ‘wrong’ answer: I’d much sooner associate myself with Hodgman.”

I have other objections to the Apple ad. It just doesn’t ring true to me. The guy who’s supposed to represent the Mac seems laid back, hip, cool. These are the qualities Apple wants us to associate with its brand. He doesn’t seem like the kind of guy who would try to strip away the First Amendment rights of bloggers, or try to get books banned, or use slave labor to build iPods, or generally act like a “cussing, abusive lout who seems to revel in bringing women, in particular, to tears by verbal abuse.” In other words, it’s the very opposite of authentic.

On the other hand, as Stevenson points out, “Mr. Mac comes off as a smug little twit, who (in the spot titled ‘WSJ’) just happens to carry around a newspaper that has a great review of himself inside.” Somaybe the ad is a little more authentic than I—or its creators—thought.
A VNR Producer Speaks Out: Kevin Foley, who heads VNR production company KEF Media, has launched his own blog. His first post, predictably, deals with the FCC’s attack on the media’s right to select its own content, and makes the obvious point to print reporters who have hyped what is bizarrely referred to as “fake news.” Says Foley: “When print content is used – and its used all the time - I see no Department of Truth stepping in to tell the media that it must disclose its sources or risk punitive fines. If that were the case, there would be no Wall Street Journal.”
Counter-Productive Criticism and Crappy Political Correctness: A treasure trove of interesting content in this morning’s Financial Times, starting with an exceptional column by Lucy Kellaway, who is on the receiving end of a couple of leaked memos: one from Graham Copley, head of global equity research at HSBC, which appears to be an attempt to demoralize the company’s analysts; another from JP Morgan that illustrates “just how much literary value can be destroyed in 73 years.”

Of the Copley memo, she writes: “The message itself is the rudest, crassest, most ineffective “motivational” memo I have ever seen… [Copley] comes across as a power-befuddled bully, who has no interest in understanding why the research is bad and no interest in finding a way to make it better. He is correct in one thing only: he says that leaders are paid to motivate their teams. In which case it is he who does not deserve his salary. His memo will send any talented underlings scampering off to join hedge funds, and will surely make less talented ones even more demoralised. The only thing it has motivated them to do is to print the memo out and send it in brown envelopes to journalists.”

Meanwhile, in comparing JP Morgan’s recent document outlining “Our Business Principles” to the words of the company’s founder, she finds that clarity and elegance have been sacrificed to obscurity and political correctness.

Also worth reading: an article explaining that Glaxo SmithKline plans to adopt a policy of complete transparency on the funding it supplies to patient groups across Europe (no mention of the U.S., intriguingly); a story (not the first, but interesting nonetheless) about Procter & Gamble’s embrace of word-of-mouth and the tools it is using the track the impact of such campaigns; and a look at the need for companies to educate employees about personal finance, as more of the burden for financial planning shifts to the individual.