Ransom Money

Tweet

Did you ever read O'Henry's famous short story "The Ransom of Red Chief?" In it, a couple of kidnappers snatch a young boy and demand a hefty ransom from the boy's father. Turns out the boy is a huge pain-in-the-butt (not unlike Bette Midler in "Ruthless People").

As days and weeks pass without a payoff, the kidnappers get so desperate to unload this most annoying child, the father ends up cutting a deal. He demands they pay him $250 to take the boy off their hands. The kidnappers thankfully do so.

If the news today of ousted GM chief Rick Wagoner's reported $20M+ golden parachute ("retirement benefits") has credence, I predict the failed auto executive will ultimately capitulate to a relentless siren of criticism from the fourth estate (both news and commentary) and fed-up (and wired-up) consumers (both here and abroad). He'll refuse the payout.

I'm not saying that Wagoner is annoying like Red Chief or Bette Midler. In fact, he's probably a very amicable guy, in a patrician sort of way. Yet, there's too much incongruity between his role as the head of a company that neglected (or ignored) the writing on the wall, and his ability to take a big payout while tens of thousands of workers get shit-canned due to his transgressions.

I've been wrong before, but GM and the Obama Administration, whose Treasury Dept. has barred GM from paying severance to Wagoner or any other senior executive, will be on the major PR defensive this week over this one. Can he argue that he's deserved after 23 years with the automaker? I suppose it's all relative. Michael Ovitz walked away from Disney with a $140M severance package...after just 14 months on the job. Beware of Gretchen Morgenson.

Some Weekend Inspiration

Tweet

Tesla's Testy Tease

Tweet

OK So your employer's much-ballyhooed efforts to build the first electric high-performance sedan has hit the skids. How can you rev the engines to get it back on track?

Elon Musk's Tesla Motors, which has seen its share of bumps in the road, this week gained some attention when it asked Digg founder Kevin Rose to remove from Flickr an image he posted of Tesla's not-yet-built, but imminently "launching" Model S sedan.

Apparently, the Model S had bigger plans for its coming out party -- or did it? Did Tesla intentionally leak the image for buzz-building purposes, or did it simply lose control over some ill-conceived embargo?

Jalopnik naturally pounced on Rose's lead, which prompted the following exchange between Tesla's in-house PR person Rachel Konrad and the auto blog's editor Ray Wert:

Ms. Konrad, a former reporter, is clearly learning the ropes of dealing with jaded journalists. On Wednesday, in a piece titled "Tesla Flack 'Bitches About Silicon Valley Gossip Blog,'" said blog reported her pointed exchange with an Australian communications consultant who apparently cited the blog in his own post questioning Tesla's ethics.

Personally, I'd like to own one of these cars, if it ever gets built. Jalopnik called it "vaporware," and that "gossip blog" suggested that Tesla's acting in a "fraudulent" manner:

"For Tesla, any publicity is good publicity. The Model S unveiling is Tesla's last-ditch hope at a future in the business. Although it does not have financing for the production of the Model S, or even a site for a factory to produce it, Tesla plans to take deposits for the $58,000 vehicle from customers, a move at least one Tesla executive deemed fraudulent, prompting his departure."

At least the images are way cool.

Update (March 28): Google founders Brin and Page revealed as investors in Tesla.

Step and Repeat

Tweet

As the propagation of news has gone from top-down to bottom-up to sideways, the client mandate of building a positive presence in the media and social spheres remains a constant.

Outside of technology and consumer packaged goods, I'd argue that Hollywood has embraced the new marketing rules as much as any industry. The just concluded OMMA Hollywood, next month's AlwaysOn On Hollywood and just-announced Digital Hollywood confabs certainly attest to this.

So where does the lowly "press junket" figure in today's changed marketing mix? Apparently right up there, if you consider one hotel's plans to build the perfect space for hosting these hyper-controlled, one-on-one (mostly vapid) speed-interviewing sessions between celebs and the media filter.

According to a piece in today's New York Times, The W Hotel, on the fabled corner of Hollywood and Vine, is being built with the goal of usurping The Four Seasons as the preferred press junket palace:

"One hotel, the Four Seasons Hotel Los Angeles at Beverly Hills, by itself enjoys 'about 90 percent' of the junket trade. Jorge Collazo, the Four Seasons’ director of marketing, said he could not quantify the market share, but confirmed that his hotel 'definitely has the majority of the junketing business.'"

The W hopes to woo the left coast PR set by investing in the press junket as a mainstay in the Hollywood marketing mix:

"Junkets are highly structured events and require a specific configuration of hospitality rooms and reception rooms, according to the architect. Some hotel rooms need at least three bathrooms, with two of them large enough for a hair stylist or makeup artist to work in."

"Those same rooms need to be capable of being emptied of furniture at a moment’s notice so they can be transformed into “taping suites,” where actors can chat on camera with a succession of reporters and camera operators, who wait their turns in the adjoining hallway. In a single weekend under the lights, actors might grant up to 50 interviews."

When the W Hollywood hotel opens in November, "the junketing wars can commence." In typical Hollywood fashion, the marketing manager of The Four Seasons nonchalantly sniffed:

"It is easy to create a building and make it pretty and have all the proper equipment. The part you cannot produce so easily is the wealth of knowledge that comes from experience. The human resource is clearly an advantage over any new product."

I say send them both free passes to the Digital Hollywood event. Then perhaps they'll offer free broadband wireless throughout their properties, and consider installing digital video edit booths. Flip cams for all guests, anyone?

New Spin Spotter at RNC

Tweet

This just in from the folks at TechCrunch: the Republican National Committee has named a "Director of New Media." He's former Microsoft and MSN employee Todd Herman who posted on his new role here. (RNC's former top techie resigned earlier this month.)

Well, I'm not surprised the red-staters moved quickly to fill that vacant slot. Haven't they promised for months about finding some of that "je ne sais quoi" made so de rigeur by the Obama-ites during the '08 campaign? Well, now they have someone with real tech cred, albeit working for the party (deservedly) out of favor.

"Herman founded and ran SpinSpotter, a startup that provides tools to detect spin in news stories."

SpinSpotter...Republicans...hmmmm. Why does this sound like a such a contradiction in terms? I guess if the blue-blooded media watchdog group Fairness & Accuracy in Reporting (FAIR) can flourish, so can the two its red-blooded cousins Accuracy in Media and the consumer-driven SpinSpotter. But then again Herman is not so easily defined.

"...his political affiliation leaned conservative and he’s also made political contributions to the Electronic Freedom Foundation, Swift Boat Veterans for Truth and the American Center for Law and Justice."

Money for EFF and Swift Boat Veterans out of the same checking account? Go figure.

All I Ever Wanted to Be Was a...

Tweet

The current issue of IDD magazine online explores the public relations quagmire currently confronting the investment banking industry. In a piece titled "Occupational Hazard," some of our industry's bold-faced names share their advice on just how to rebuild IB's sullied reputation.

(President Obama's quip on Leno last night suggesting that our best & brightest forgo careers in investment banking probably didn't help much.)

Here's a smattering of the notables' quotables:

Peter Verrengia, president and senior partner at Fleishman-Hillard's Communications Consulting Worldwide: "At the heart of this is the fact that the public doesn't understand the role of the investment banker, how capital formation happens, or how it relates to their own economic progress. This has been fine in the past. Periodically, when the market blew up, bankers would come in for some finger-pointing, but the public, having little understanding of what they really do, tended to move on to other targets that they understood a little bit better, like brokers or individual companies that have failed to perform."

Paul Argenti, a co-founder of Communications Consulting Worldwide (with Verrengia) and now a corporate communication professor at Dartmouth College's Tuck School of Business: "If it's just an image problem, you need a new suit of clothes, and everything will be fine. In this case, the entire industry is perceived as responsible for everything that's gone wrong in the financial system and everything that's wrong with America. It's hard to fix your image when everyone hates you and thinks you're responsible for all the evil in the world."

Tim Skeet, regional chairman, International Capital Market Association for the United Kingdom and Ireland: "The media and politicians are trying to ease these elements of the crisis into pre-digested sound bytes, but in reality everything is more complicated and technical than that," says Skeet. "All of us -- the media, politicians and bankers -- have a duty to communicate to the public that this is a very complex situation that cannot be reduced to sound bytes."

Matthew Harrington, CEO of U.S. operations at Edelman: "It's a very different industry than a consumer product category inasmuch as their audience is pretty rarefied in CEOs and policymakers, so it's not for a mass audience. But in this period of time they are being splashed across the newspapers, so their visibility is now a mass audience, whereas historically it hasn't needed to be and hasn't been."

Michael Kempner, CEO of MWW Group: "The institutions have to work very hard to create trust, which is going to be very difficult, and they need to be open and transparent and act in a way more consistent with understanding what people are going through in this economy."

A common theme emerges: the industry needs advocates from its own ranks to frame the conversation or others will do it for them (and don't forget to hire us to help you).

Yet I wonder whether what ails investment banking is more systemic, and whether a more pro-active media relations posture will prove an effective cure? Me thinks there may be more substantive challenges that need fixing before these companies should take their message to the court of public opinion.

Update (March 26): William D. Cohan, author of "House of Cards," and Felix Salmon of Portfolio debate whether we really need Wall Street bankers.

What Marketers Worry

Tweet

I don't remember the last time I picked up a copy of Cracked magazine. But then again, what me worry that I barely recall Cracked nemesis Alfred E. Neuman (at least until our 43rd president assumed his persona).

I was tooling around today on the PopUrls site and came across this pertinent-to-PR-peeps post via Cracked.com:

"9 Corporate Attempts At "Edgy" That Failed (Hilariously)"

In it, the beta site highlights nine case studies that some of the world's most vaunted consumer brands probably wished had never made it out of the creative session. They include:

• The fake viral fan video SONY created for its PSP.
• Reebok's use of Fiddy as a role model for youth.
• Pepsi Max's suicide ad (from Germany).
• Mattel's consumer-driven effort to remake "Ken" as cool.
  
• McDonald's (failed) inducement to rappers to feature Mickey D in their videos.
  

Having a presence in the social sphere means diddly squat without that little extra to create tension, edge. I mean isn't controversy the elusive ingredient that can propel a campaign to viral nirvana? With this in mind, one has to give these marketers some credit for pushing the envelope -- even though the envelope they pushed was in truly bad taste.

SXSW Soothsayers

Tweet

I kinda wish I was in Austin mixing it up with the social media set at #SXSW, but here I am in Miami with my #1 son stealing a couple of rounds. My Dell 5150 finally croaked, so I'm on the hotel's computer trying to catch up. (My Blackberry's mobile Twitter feed only goes so far.)

I stopped by PR Newser to discover the prognostications of some great prognosticators (and SMFs) Brian Solis and Peter Shankman who waxed on the future of PR. Will agencies become irrelevant? Will the press release wither away? Will the new breed of social media strategists usurp the leading role traditional PR'ists have played with clients in need? From PR Newser:

"'The bottom line, said Solis when asked about what will be the business model for PR in the future: We're not charging to write press releases or for media campaigns anymore,' he said. Indeed, those functions will still exist, but they are becoming an increasingly smaller part of the pie."

The bigger issue, in my mind, has more to do with identifying and nurturing the PR competencies that remain relevant in the new social media marketing order. Sure, drafting and "placing" news releases with MSM has lost its luster (and effectiveness). Be that as it may, clients still look to agencies and counselors to bring to life their news and point-of-views in the expanding "media" and social media spheres. Right?

This goal hasn't changed, though the means to it certainly has. More importantly, the skill to cogently and convincingly communicate a client's perspective, coupled with a working knowledge of the evolved universe where that POV can flourish, remains valid - even to this day.

Cramer Eats Crow

Tweet

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Interview Outtake Pt. 2

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

My wife has pedestrian tastes in her TV fare. I peeked in on her the other night and caught her watching the most vapid and annoying show on television. If you thought "Dancing with the Stars," "The Biggest Loser," and "American Idol" rankle as the most tasteless and mindless programming on the tube, have you ever seen the "Real Housewives of New York City?" Trust me. It's nauseating, and doubly so for anyone who actually grew up here.

This particular episode took place at the American Cancer Society's Hope Lodge, which offers free lodging (and a welcome sanctuary) to out-of-town cancer patients receiving treatment at any one of New York's first-rate hospitals. The dialogue consisted of these dumb-ass "housewives" dissing each other and their husbands while preparing a meal for these brave patients and their families. Frankly, I don't know what's worse: listening to these social climbers whine about their vacuous lives or a heavy dose of chemotherapy. But I digress.

Yesterday, I managed to catch another paradoxical food-preparation TV segment. This one featured CNBC's beleaguered stock-picker Jim Cramer waxing on the economy alongside the convicted stock trader Martha Stewart, as the two baked banana cake on Ms. Stewart's show. Yikes. What has the world come to? We're all doomed.

Talking Cramer, did you happen to see his reconciliation with Mr. Stewart last night on "The Daily Show?" Actually, I wouldn't describe this exchange as a reconciliation. Stewart simply ambushed him, and what's more, dredged up some fairly incriminating TV clips that showed Cramer boasting of manipulating the market for his own gain. Double yikes.

OK So let's say you're Cramer (or CNBC's) PR rep. In spite of the nastiness between the CNBC and Comedy Central camps these last few weeks, you'd think it's a safe bet that Stewart would be civil and not go for the jugular. After all, he was relatively gracious to guests like Sen. McCain and Gov. Huckabee in the midst of a most acrimonious political campaign. Well, if you thought Stewart would kiss and make-up, you'd be wrong.

What surprised me most was just how unprepared the usually unflappable "Mad Money" host was. Did he really think he could just wing it after what had percolated in the court of public opinion? Did his ego tell him that any advance interview prep was unnecessary? Didn't his handlers speak to the writers before the segment to catch a whiff of what lied ahead? I suspect that Cramer ain't feeling so hot this morning.

Related posts:

• Jason Calacanis
• Brian Stelter (NYTimes)
• JackCoyle (WashPost)
• Howard Kurtz (Wash Post)
• Ryan Tate (Gawker)
• Diane Brady (Business Week)
  
• @Steve Case (via Twitter) Stewart vs. Cramer: One-Sided Smackdown To watch last nights show: To read Wash Post analysis: » link to Howard Kurtz - Stewart vs. Cramer: A One-Sided Smackdown - washingtonpost.com
  
  

Hooray for the Consultants

Tweet

As the proprietor of a somewhat successful New York PR consultancy, after years of toiling in the big agency world, I read with more than a passing interest Tom Foremski's assessment of our industry in Silicon Valley Watcher.

Its title:

"PR Watch: The Disruption Of The PR Industry And
Why Everyone Has Become A Consultant."

Foremski not only sees agencies retaining more outside consultants to service clients, and by doing so, cutting agency overhead and healthcare costs, but also sees clients dropping their agencies altogether in favor of "very competent" practitioners:

"The PR industry in Silicon Valley appears to be converting to "consultants" en masse. The benefits to PR firms are that they save on payroll and other costs. However, the risk is that PR firms could lose their remaining clients to an army of very competent PR consultants offering services at sharply lower costs compared with PR firms and their higher costs of doing business."

My consultancy certainly has benefited from the client trend of streamlining, without compromising communications goals. (Though I still take issue with Jeremiah Owyang's recent suggestion that the client will be better served by simply cutting its agency's fees.) I recommend that they think outside the big box.

The bigger point Mr. Foremski makes, and has made on previous occasions, has to do with the fate of the PR profession. The picture he paints ain't pretty. He quotes one west coast agency person:

"No PR firm will be able to justify a monthly retainer of $30,000 just to do media relations and put out a few press releases. The old way of doing PR just doesn't cut it anymore. Even when the economy comes back, the old way of doing PR won't."

So the Silicon Valley-centric minds contend that the old way of doing PR is destined to follow dead tree media to the grave. Perhaps he's right, but I don't think so. Few will argue with the disruptive influence that information technology and media fragmentation have had on our industry, especially in their impact on media consumption habits.

Yet one basic client mandate hasn't changed: to build a greater, more positive and redeeming online and offline presence for their brands, products, services, and points-of-view -- whether it's via The New York Times, Mashable or Facebook. It's only the means to this end that has.

Pitching and "placing" stories (I hate that term) remains a profitable (and still-effective) calling for PR pros across a wide array of industries. Yet, content creation and optimization, and direct-to-constituency dialogue increasingly drive our clients' footprint-building goals.

Does this shift portend the death knell for our industry? Hardly. Do agencies and consultants need to adjust? Absolutely.

Seth's Tribal Order

Tweet

In December, I read Seth Godin's wisp of a book Tribes in which the esteemed digital pundit rallies his marketing-minded readers to break with tradition and take a leading role in the new world order.

In a January 2008 post on his blog, he explained it this way:

"Brand management is so 1999. Brand management was top down, internally focused, political and money based. It involved an MBA managing the brand, the ads, the shelf space, etc. The MBA argued with product development and manufacturing to get decent stuff, and with the CFO to get more cash to spend on ads. Tribe management is a whole different way of looking at the world."

The book bowed in October 2008 and was well received. At a scant 160 pages, it's also a relatively quick, yet most worthwhile undertaking. Setting his new tribal order aside, Seth's Blog today serves up a short tutorial on the difference between PR and publicity:

"Publicity is the act of getting ink....PR is the strategic crafting of your story...."

Now there's something that hasn't changed in my decades toiling in this space, even with the upheaval we've witnessed these last several years.

As noted in my post yesterday, Twitter founder Evan Williams can get as much ink as he wants...for the moment...but his microblogging platform's fate will ultimately be determined by the qualitative aspects of that exposure. In other words, he'd likely be better served by a seasoned public relations strategist (who'll help shape his story), not a publicist.

Seth closed his post today with this keen observation:

"In my experience, a few people have a publicity problem, but almost everyone has a PR problem. You need to solve that one first. And you probably won't accomplish that if you hire a publicity firm and don't even give them the freedom and access they need to work with you on your story."

Thanks, Seth, for the reassuring (and redeeming) words of advice.

Twitter's PR Ride

Tweet

Let's revisit Twitter, and specifically the ubiquity of the rapidly expanding microblogging channel in the news media. Much of the coverage has occurred naturally, a bi-product of the editorial echo chamber, nourished to a great extent by Twitter's RT-happy users.

Some stories appear consensual. While others seem precipitated by Twitter itself or its PR advisors (does it have any?). No matter the origin, the strategy begs the question: to what end?

Readers of this space will know that this PR pro is not a big fan of gratuitous media exposure. Sure, it feeds egos like Donald Trump or P. Diddy, but in an enterprise or organization, PR should have a purpose: to produce results (and I don't count the appearance in a media outlet as a result in and of itself).

Take for example yesterday's first-person profile of Twitter co-founder Evan Wiliams (@ev) in The New York Times's "The Boss" column. I read it and thought "why?" What were the goals for this interview and were they accomplished?

Does Twitter really need more media exposure, and if it does, why this column? Clearly, the tech team at The Times has given Twitter more than its share of attention. But then again, perhaps this statement from Mr. Williams provides a glimpse of the current strategy (and the story's raison d'etre):

"Right now, anything we would do to make money would take our time away from acquiring more users. We have patient investors."

So it appears that growing the channel's user base is first and foremost on Twitter's mind right now (in spite of conjecture that search will ultimately drive revenue). It's a cart-horse thing. Yesterday's Times' piece ended on this note:

"My wife, Sara, a designer, keeps me balanced. We’re building a modern house that we hope will be done by 2010. The design is a challenge — that’s why she’s in charge."

Evan, good luck anyway with your home design challenge, though I'd much rather learn of your plans and aspirations. The talk you gave at TED was a great start.

Much-Needed Humor

Tweet

What a week. So much bad news. Between the 8.1% unemployment rate, the Dow and S&P at 12-year lows, my boys' 529s, the prospect of a GM bankruptcy filing, Rhianna taking Chris Brown back (for now), and Michael Jackson's re-emergence on the global stage, I can't take it any more!

Rather than rant on the sorry state of our affairs, I thought we should pay homage to the folks at IAC's CollegeHumor.com, which produced the segment below. The marketing team at AXE bodywash also deserve a nod since I think they bankrolled the prank.

Watch Prank War 7: The Half Million Dollar Shot and more funny videos on CollegeHumor

Have a great weekend, and don't forget that the value of a smile exceeds any amount you might have in your 401K.

Recession? Fire the PR Firms

Tweet

"We get it. We absolutely get it. We understand that it would seem absurd at a time like this to be using taxpayer funds for this kind of non-essential service."

Non-essential service? So this is our fate, PR peeps...at last in the eyes of Chicago Mayoral press secretary Jacqueline Heard as she announced the cancellation of all 11 PR contracts with the city, the last one worth $5 million.

"It's been made abundantly clear to every department that they are not to use these contracts. But I suppose someone could feign ignorance and use them anyway. This will preclude that misstep. The door is locked shut on the use of these kinds of firms at this time."

These kinds of firms? Once again, we find ourselves in the unenviable position of defending our honor, let alone the value we offer as a profession. How will the city of Chicago measure the negative impact that will result from inadequate or unprofessional communications between the city and its key constituents? Isn't good PR, i.e., clear and concise communications, one of the essential ingredients for a city to govern effectively?

And it's not just municipal governments that see PR as superfluous or a waste of taxpayer money. Gee, I sure hope this is not a trend.

Update (March 6) - Chicagoist reports on the PR backlash.

PR DOES Drive Sales...

Tweet

Last week, Forrester senior analyst Jeremiah Owyang, a prolific and astute observer of web strategies (and someone whom I hold in high esteem), posted a link to a new, sobering USC Annenberg study on the state of the PR agency business. (It dovetailed well with the Council of PR Firms' own look at the state of agency affairs.)

Anyway, at the end of his analysis of the USC report, Jeremiah concluded that today's buyers of PR services have the upper hand, and thus offered the following suggestion:

Buyers Should Renegotiate PR Contract This one is going to raise hell with PR professionals, but if you’re a buyer of PR agency services, you should renegotiate your fees and contract at a reduced rate. The market simply has changed, and as with every other industry, demand and supply, cause changes. Now, this isn’t to suggest you cut rates and lose the quality of service you’re getting, but figure out what areas the firm is not providing value and reduce those services. On the other hand, you can try to increase your budget with these firms, and ask for services greater than you could have afforded in an upswing, now that you, as the buyer, are in clear control.

Well, it did raise an eyebrow (or two) with this PR vet prompting the following comment:

Jeremiah, As you surmised, it is the last item (recommendation) with which I take issue. Overall, the study does not deviate much from what we’re hearing in our industry (and many others). But the notion that companies should renegotiate the terms of their agency engagements doesn’t make sense given that fact that public relations, of all the marketing disciplines, has always been the most efficient spend.

In fact, I would recommend that CMOs re-allocate a greater piece of their marketing budget to PR during tough economic times. They may just be surprised at the increased ROI.

Peter Himler
Flatiron Communications LLC
www.flatironcomm.com

Being the good analyst that he is, Jeremiah responded by asking me to back up my assertion with metrics. (He also complimented my blog):

Peter Himler

Can you back up with data that PR is the most efficient spend for marketers? I know (from research) that marketers are most focused right now on qualified leads.

PR doesn’t always provide leads, in fact that may not be the primary reason to hire a strategic communication firm. Respectfully, I’m standing by my recommendation as I know I can back it up with data.

BTW: I dig your blog, good topics http://theflack.blogspot.com/

I replied as follows:

Jeremiah,

I can’t provide specific data to back up my assertion that PR is a more efficient spend than other marketing disciplines. I can only draw on my professional observations on what fee a BBDO might require to mount a national ad campaign versus what its sister agency Ketchum may need for a comparable PR campaign, i.e., seven or eight-figures versus six figures.

I can’t say the same for online marketing where the disparity in fee structures from agency to agency is not as severe. So perhaps I should have qualified my statement to say that traditionally PR has been more cost-effective marketing discipline, but in the digital and social media realms, all bets are off.

We thus reached a consensus, sort of:

Peter, That makes sense, I agree with much of what you clarified.

I will say that PR is a great solution if your objective is awareness, consideration, influence. However, I’ve yet to see proven numbers that indicate that PR directly drives sales, conversions, and leads each and every time like advertising, webinars, and sweepstakes.

With that said, lead generation activities would perform poorly if they don’t have activities driving awareness, consideration, and preference.

They all work together.

I say "sort of" because I believe that PR most certainly has the capacity to drive sales, conversions and leads. Having judged my share of industry awards, I've seen case study after case study whose metrics support this conclusion. Maybe one of my readers would care to contribute to this meme on measurement? KD Paine?