Sep 25

The misery never ends

September 25 - newspaper

I just visited the College of Charleston Thursday and Friday, attending board meetings, delivering lectures and participating in panels. I love the C of C. It's a beautiful campus with bright, alert students. 

As might be expected, most of the students said finding a good job was their number one pain point.

I shared my job search/interviewing strategies, but also heard some smart tips from fellow advisory board members I thought worth sharing, including:

  • Think global. Relocate to the hot markets that have jobs, such as China. Spend a few years there gaining experience and leverage it to come back home to your ideal job.
  • Demonstrate a basic knowledge of how business works. (Note: this doesn't seem to be an age-specific problem since the Council of PR Firms routinely reports the 'lack' of such knowledge is the number one criticism of agencies by their clients).
  • Learn a second language. With American's rapidly-changing demographics, fluency in an Asian or Spanish language or dialect can be a huge plus.
  • Master writing and, in particular, writing on deadline. PR demands multitasking and PR pros must be able to write quickly, clearly and consistently.
  • Be willing to do whatever it takes. If assigned grunt work, be the best possible grunt.

That last point prompted one young lady to raise her hand. She'd just finished an internship and, frankly, didn't care for the grunt work. "When will the misery end?” she asked. “Never,” I responded. “The misery changes as one moves up the food chain, but it never goes away. It just becomes more intense.” I don't think she cared for my answer.

Another student disagreed with my advice on job interview preparation. “Do you have any idea how busy we are? We don't have the time to do all the research on a company that you suggest we do. Besides,” she said, “That's what the internships are for. You learn about the company when you get the job.” I wished her well and suggested she had a real Catch-22 situation on her hands since a company won't hire a person who hasn't demonstrated the time or energy to learn about them in advance.

The students were fully engaged in the lectures, grateful for the advice and will, I'm sure, do very well once they hit the real world. I just hope they come prepared and accept the fact that the misery never ends.

Sep 17

Silence kills

September 17 - layoffnotice I was shocked to read about the horrific happenings at France Telecom, the global telecommunications giant. Based upon huge staff reductions and other Draconian measures taken during the recession, no fewer than 23 employees have committed suicide in the past 18 months.

I was even more shocked and, in fact, sickened to read about senior management's apparent lack of communication and abject indifference as the crisis unfolded. One France Telecom employee, Monique Fraysee-Guiglini, said management had been in total denial for a long time. “It has refused to listen to what the office doctors had to say about the restructuring. We tried to sound the alarm several times, in vain. Speech is very restricted,” she said.

What a terrible indictment. And, what a horrible way in which to manage an organization and treat fellow human beings. I've seen lots of corporate cultures over the years, many of which were positively toxic. But, I've never, ever experienced one that seems as totally detached from common sense, business ethics and basic decency as the one at France Telecom.

Having just attended the Arthur Page Society's annual conference, I know how critically important honesty and transparency is to a brand's reputation and performance. During the two-day conference, we had the opportunity to listen to the CEOs of such companies as US Airways, Darden Restaurants, CDW and others. Each consistently stressed the critical importance of placing ethics ahead of expediency. These companies succeed because they do the right thing.

If the allegations against the senior executives of France Telecom are true, then the company will most surely be forever branded as the evil doppelganger of J&J/Tylenol in the annals of crisis communications management.

Aug 18

Honey, let’s scratch the Rancho Bernardo Inn off next Summer’s vacation list

There's clever marketing in a downtime and then there's pure desperation. The San Diego-based Rancho Bernardo Inn's recent pricing strategy would fit neatly into the latter category.

That's because the allegedly upscale resort is now offering a $19 per night 'survivor' package aimed at victims of the current recession.

August 18 - tents According to Reuters, down-on-their-luck consumers can still enjoy the resort's amenities as long at they bring along their own tent, flashlight, sleeping bags, toilet paper and insect repellent. For the $19, vacationers get to set up camp at one of the resort's lovely pools and enjoy all the usual frills sans the warmth and comfort of an actual room. One would also assume room (or tent) service wouldn't be included.

This is a terrible idea for any number of reasons. First, and most importantly, it undermines whatever image and reputation the Rancho Bernardo Inn has built up until now. Second, the $19 per night offer will attract, shall we say, a slightly less exclusive clientele. Third, the latter will scare off middle and upper-scale patrons who have either patronized the inn in the past or might consider doing so in the future. Like Mercedes, Cadillac and other luxury brands that have eroded their up-market brand image by slashing prices, the Rancho Bernardo will pay a heavy price down the road.

Moving forward, the Rancho Bernardo Inn will be forever known as 'tent city,’ the 'homeless hotel' or some other horrific moniker.

The four-star inn's assistant general manager calls it '…clever marketing in a downtime.' I call it brand suicide.

*Thanks to Greg Schmalz for the idea for this post.

Aug 12

The vagaries of business: 1995-2009

August 12 - business-101 I had the opportunity to join a day-long meeting
of PR agency executives last week. While a few were excelling, most were
struggling in the current economy. Many, in fact, had taken Draconian cuts
to assure their firms remained profitable. Others had re-assigned formerly
billable staff to nearly full-time marketing and business development
activities. It was grim, to say the least.

I hope these firms succeed in their prospecting, but making changes after the
fact is akin to trying to run down the proverbial horse that's already bolted
from the barn.

But, I digress. At the meeting, participants agreed that clients were not only
inviting more firms than ever to pitch their business, but taking an inordinate
time to make a decision. One statement in particular took me aback. An agency
principal reported that his firm had won no fewer than three recent pieces of
business only to be told the client budget no longer existed. Ouch! It's tough
enough to chase down some of these leads. But, imagine receiving a call that
begins with the prospect/client saying, 'Herbert, I have some good news and
some bad news. Which would you like first?'

I went through the 'now you see it, now you don't' experience once before. It
was back in those lazy, hazy, crazy days of dotcom-mania. We'd pitched a
company, been awarded the business in the morning and then fired in the
afternoon. Apparently, the CMO had neither the authority nor the budget to hire
a firm. Nice.

Last week's therapy session also reminded me of Peppercom's first big setback.
We'd been in business for about three months when I received a call from a guy
with whom I'd once worked. He was now head of human resources at a global
chemical company and had a mega budget for employee communications. 'Steve,' he
said. 'I want you guys to overhaul everything. Soup to nuts. You give me the
budget and I'll authorize the purchase orders. Oh, and we need to start
yesterday.'

Talk about manna from heaven! We had one or two other small clients at the time
but, in one fell swoop, this chemical company client was about to transform the
fledgling Peppercom into a multi-million dollar agency.

Ed and I quickly crafted the program (with Ed gleefully whipping together
massive budgets, btw). The two of us then barreled up Rt. 95 to Connecticut to present the plans and budget, and begin the work.

When we arrived at the reception desk and asked for the contact, however, we
received a puzzled look. 'Why don't you take a seat?' suggested the
receptionist.

About 20 minutes later, a woman came strolling out. She introduced herself as
the new head of human resources and corporate communications, and sighed, 'Did
no one contact you about John?' We shook our heads. 'Well,' she continued,
'John was fired last week. I saw your proposal and budgets and, frankly, have
no interest in working with you. I'm sorry you had to come all this way.'

Boom. Easy come, easy go. Talk about a long, brutal ride back to Manhattan. The word 'funeral' came to mind. 

I was never able to track John down to find out what had happened. And, he
never bothered calling me.

Ed and I overcame our shock and disbelief (as well as our intention to hire 10
people and move into new office space) and went back to cold calling new
business prospects. (Footnote: a variation of this anecdote occurred many years
later when a global CMO promised us a $10 million budget only to disappear a
few months later).

Business always has its ups and downs, in good times and bad. While
commiserating over one's bad luck can be cathartic, I've found the single
biggest 'secret' to success is resiliency. When an ITT, Panasonic or a Unisys
fires you, you pick yourself up, dust yourself off,  paste a smile on your
face and charge ahead.

There will always be clients who spin your wheels and dangle assignments and
budgets they have authority to award. And, every once in a while, there will be
a prospect who disappears completely after promising a wealth of riches. The
best remedy is to simply chalk it up to the vagaries of business: yesterday,
today and tomorrow.

Jun 15

What’s $146 million among friends?

June 15 - pocket-money How'd you like to be owed $146 million and be asked by the debtor for even more? That's exactly the situation Publicis finds itself in with General Motors.

Not only does the automaker owe the advertising holding company $146 million but, get this, GM's asked Publicis to continue working on the account during and after its bankruptcy case.

Talk about being stuck between a rock and a hard place. What would you do? The Ad Age article reporting the mess doesn't indicate what Publicis will do. But, how could they continue to go even deeper into debt? I'm all for showing good faith and investing in a client's business. But. The GM business model is completely broken and will take decades to fix (and I doubt it can be).

This is a serious image and reputation challenge for Publicis (not to mention a brutal drain on cash flow). Clients, prospective clients, the Street and investors have to be mightily concerned about the company's financial future. And, employee morale has to be at rock bottom. In fact, I can just imagine the water cooler discussions at Publicis agencies:

Shimmerwitz: 'So, with all the money GM owes us, do you think we still have a shot at year-end bonuses?'

O'Hara: 'Of course we do. But, I wouldn't count on a replacement for the water cooler when it's empty.

May 07

Hey, it could be worse. You could be Mikheil Saakashvili.

Sometimes it takes a compelling photograph, a tear-jerker of a story or the sight of a street person badly beaten down by life to remind me that I've got it really good. Sure, I worry about the economy, my kids' future and whether the Mets $36 million investment in Oliver Perez was, in fact, the huge mistake it now appears to be.

May 7 - wsj But, then, I see something like Wednesday's Wall Street Journal front page photograph of Mikheil Saakashvili, surrounded by AK-47-toting security guards and I breathe a sigh of relief. Who, you may ask, is Mr. Saakashvili? He's the president of Georgia (the country, not the SEC bastion of legendary college football running backs).

A picture is indeed worth a thousand words. And this one is a real beaut. It depicts the country's chief executive entering a Georgian military base where an attempted mutiny had just been squashed. The president's security guard 'heavies' look like set actors from The Sopranos and Saakasvili's expression is priceless. He's glancing to his immediate left and his eyes speak volumes: 'God, is that guy going to shoot me? Is that group about to kidnap me? Is that a grenade in that thug's pocket or is he just happy to see me?'

There's stress and then there's real stress. The next time I'm feeling a little down, I'm going to re-read this blog, check out the photo and thank my lucky stars I'm not president of Georgia (the country, not the home of America's finest peaches).

Apr 16

We are now engaged in a great Civil War

I often think of those words from Lincoln's Gettysburg Address when I read Ad Age. April 16 - lincoln-gettysburg-banner

Since the market
meltdown, the publication has become a horrified witness to the advertising
versions of Antietam, Shiloh and, yes, Gettysburg itself. Every week, one advertising expert will bemoan the industry's plight
while another guru pushes back and says, 'No, these are great times for
advertising.'

And, it's set
against articles announcing yet another major marketer's decision to decouple
its ad budgets and spend the dollars in other, more cost-effective, one-to-one
ways.

The ad industry is
in a state of turmoil akin to the 1917 Russian Revolution. And, social media is
this revolution's Lenin. Long-standing traditions, icons and business practices
are being swept aside as marketers take a deep pause and ask, 'Why am I
advertising in the first place?'

The big holding
companies are desperately retrofitting their broken models as they're being
squeezed by their owners to make Draconian cuts, freeze all salary raises and
bonuses and bill, bill, bill. It must make for great workplace environments.

Ad Age reflects
this angst and uncertainty. And, you can tell that marketers aren't sure what's
appropriate in this chaotic, cataclysmic era either. Nationwide Insurance, for
example, is shelling out $178 million for a traditional campaign that revives
its old 'Nationwide is on your side' theme. They think it will 'comfort'
current and prospective policyholders. Yeah, sure. Give me $178 million and
I'll show you 178 million better ways to engage in a dialogue with your
audience.

Then there's
Brink's Home Security, which is playing on people's fears and, in the process,
increasing alarm system sales by 10 percent. Their spots show a scared woman
all alone in a house that's about to be broken into until, bam, the Brink’s
alarm system screams out with the same deafening sounds of a 747 's engines and
the scoundrel scampers off into the darkness. Talk about taking advantage of
people's deepest, darkest fears. 

Ad Age's editorial
pages are ground zero for the meltdown. A newspaper publisher penned a letter
to the editor likening himself to one of the musicians on the Titanic and
vowing, as they did, to go down with his ship. An op-ed warns big agencies that
smarter, swifter and smaller shops are gaining in popularity with clients. Then
there's a cool profile of a magazine called Vice that, perhaps not so
surprisingly considering its name and content, is thriving as other media
properties go belly up.

Advertising is
engaged in a great civil war. Traditionalists still believe the old model works
(and companies like Nationwide reinforce such antiquated thinking with their
new campaign). At the same time, the digital/social media types are gaining
more and more business. And, smaller shops are springing up faster than dandelions
in May. Most in the industry seem shell-shocked, unsure of their fate and
uncertain what, exactly, they should do.

It all makes for
great reading and is akin to watching a train wreck in slow motion. It's also
very cool to be a PR guy reading all this stuff. Along with digital and
word-of-mouth firms, we're beautifully positioned to fill the massive gaps that
are now appearing.

To close the loop
on the Civil War analogy, I'm afraid Appomatox Court House is on the horizon
for the many advertising types who can't adapt fast enough.

Apr 15

I hate to say I told you so, but….

You know a seismic upheaval is underway when an advertising professional says public relations is the smartest marketing investment a company can make in a recession. I'll let you read what Steve McKee of a Cleveland-based ad agency has to say, but I will add a few other points:April 15 - credibility1

1) Advertising has always insisted upon an inside-out approach along the lines of: "Hey! Look at our new product or service! Isn't it wonderful?'' Public relations, on the other hand, has always engaged a reporter and his/her audience in a problem-solution dialogue: "Hey! Did you know that 88 percent of Americans just surveyed said the number one thing they need is ABC? Our client has a next generation ABC that I think you and your readers will want to know more about."

2) People don't need to pay for advertising anymore, so they don't. Web 2.0 consumers depend upon word-of-mouth and other forms of credible endorsement to make informed decisions. They TiVo their way through television programs and delete intrusive online ads. That said, they search like mad for news and information from credible sources.

3.) PR is much, much more than what Mr. McKee describes. In the postEnron, current AIG environment in which we live, PR has become fundamental to a brand's image and reputation. Open and honest internal and external dialogue, transparent conversations and fiscal responsibility are the new watchwords of the consumer conversation.

Mr. McKee quotes the ad agency Crispin Porter Bogusky's definition of advertising as: "Making our clients heroes." In this 'new normal' in which we live, my definition of PR might be "Making our clients credible."

The king is dead. Long live the king.

Apr 09

We have no intention of becoming PR’s version of the Packard

Al Ries, marketing, branding and positioning guru
extraordinaire, has penned a most fascinating opinion piece in a recent Ad Age. April 9 - Packard

The Ries piece (I couldn't resist) warns such marketers as
Starbucks and Cadillac to stop cheapening their brand before it's too late.
Ries says the long lost Packard automobile did just that and died as a result.

Prior to The Great Depression, says Ries, Packard totally
dominated the U.S.
luxury car market. In fact, Cadillac was little more than a distant blip in
Packard's rear view mirror. But, when the downturn came, Packard developed a
much lower cost alternative. The cars sold well. But, when the economy
rebounded, newly affluent Americans went with Cadillac, which had remained true
to its high-priced, high-quality roots throughout the Depression. Packard never
recovered and eventually disappeared altogether in 1957.

Now, fast forward to today. I see lots of commentary in the
PR and advertising trades from agency leaders who are suggesting that others
follow their lead in cutting billing rates to 'ensure ongoing business and
demonstrate value.' I see other 'leaders' offering 'lite' versions of their
positioning, media training and media relations services or charging $500 per
press release. I think such 'strategies' scream desperation and cheapen an
agency's brand.

I think, instead, we should be providing additional value by
being more creative, getting closer to our clients' customers and helping our
clients fight the good fight when their purchasing, finance or legal
departments suggest wholesale marketing cuts.

Cheapening your brand by lowering your billing rates or
giving away your services in "a la carte" menu style will cause you
huge headaches when the economy rebounds. And good luck convincing your clients
that you deserve a rate increase just because other vendors have increased
theirs.

We all have to endure budget cuts. They're a fact of life.
But offering the PR version of instant coffee a la Starbucks or a Cimarron a la Cadillac is a penny-wise, pound-foolish
strategy. (And Cadillac's mistake of the 1980s was all the more dumbfounding,
considering that it defied the very strategy that made them a big name brand
coming out of the Depression.)

The good times will return. Maintaining one's position as a
high quality service provider during the downturn will ensure a swifter return
to heady profits in the days to come. We, for one, have no interest in
becoming our industry's version of the Packard.

Mar 12

Opening Day at Stimulus Package Field

(Public Address Announcer): "Good afternoon, ladies and gentlemen, and welcome to opening day at Stimulus Package Field.

CitiGroup, as well as the New York Mets management and players, would like to thank you for helping to bail out the hapless, reckless corporation and make today's game possible.

We'd also like to thank you for paying the ticket price to enter the gates today. In doing so, you've actually bailed out Citigroup and the New York Mets management and players a second time. Thank you from the bottom of our hearts (and wallets).
2006_11_citifield

We'd now like to direct your attention to the Ben Bernanke Bullpen area where a U.S. Marine Corps Band will shortly lead us in the singing of our National Anthem.

But first, these notes of special interest:

– Those of you seated in the Timothy Geithner luxury boxes will be able to follow today's stock market dips on your personalized Bloomberg terminals. Please note: Citigroup shares are off by 40 percent since the opening bell.

– Those of you seated in the Bernie Madoff loge reserved section must vacate your seats now. It turns out your tickets are worthless. We do apologize, but it's your own fault.

– Those of you seated in the Alan Greenspan grandstand will, unfortunately, not be able to see anything at all. Mr. Greenspan thought "sightless seats" were especially appropriate since he himself never saw the recession coming. We suggest tuning into the game on WFAN Radio to follow the play-by-play.

Now, please stand and place your hand over your hearts (assuming they're still beating). We also request that those of you who still have the money to own a hat, remove it now and join us in the singing of our National Anthem……."

"Oh say, can you see where's our economy's gone?……."