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Tuesday, August 31, 2010

The Role of PR in the New Media Conversation

Social media is changing how we use and interact with content. It is also of course having a profound effect on the role of PR in communications and message control.

While old media embracing social networks and user input is nothing new (e.g. The New York Times and CNN), WXYZ-TV, Detroit's ABC affiliate, has been embracing social networks in an innovative local experiment.

Stephen Clark, a news anchor at the channel, has embarked on an evolving program using twitter to build and tap his audience. He originally started with just getting feedback and encouraging viewers to create a social network community and now gets community involved in actually vetting and creating what appears on newscasts. Blogger Becky Johns provides a good summary of this initiative and the possible implications for the broader media. One thing she mentions with real relevance for the PR and communications industry: you can't simply PITCH this community. It will be interesting to see if and how marketers can find a way to infiltrate this kind of forum and in a natural, organic (free trade?) way become part of this kind of group, sell some COMPELLING stories/content, and not irritate the genuine, involved audience members.

Johns notes that if this kind of experiment takes off, it could have an impact on how PR folks do their jobs:
  1. Pitches will require compelling visual content. A press release just won’t be enough. PR staffs will need to expand storytelling abilities from just words to other creative means.
  2. PR pros will have to represent their company or client AND the community at large. The good ones will be active backchannel participants. They’ll have no know what’s happening locally, in their specific industry and the reporter’s beat and coverage history. Not two out of three. All of it.
While this is surely no magic bullet to save the fortunes of traditional media, it is certain that initiatives like this make it more relevant. If the world is interacting and learning in a certain way, you either need to lead, follow or get out of the way. PR firms can play their part by learning to play by the new rules: getting in and listening and not trying to dominate the conversation.

Thanks for reading.
Jonathan Gardner

Monday, August 30, 2010

No One Wants to Work for Americans

Part II in our "reputation economy" (it's not real but if we keep saying it, maybe it will become real!) series: today there's the news that a whole bunch of state-owned companies in China are looking for top-level management. Unhappy with the companies' performance, the government wants to up its game and made the unprecedented move of taking out full-page newspaper ads. Per the New York Times story (here):
"While some of the positions were restricted to Chinese citizens, many of the posts were open to foreign applicants..."
Based on my experience, there won't be a single foreigner hired for any of these positions. And there will most likely by 10 zillion local Chinese applicants....because (according to Newsweek):
In August, China’s biggest job-search site released a survey of 200,000 Chinese college students, ranking their preferences for employment. Only three non-Chinese multinational corporations made the list of the top 50: Google, Microsoft, and Procter & Gamble, all in the top 10. That’s a steep decline from the 21 foreign firms that made the list last year.
So, no one in China wants to work for a non-Chinese (read: Western or Japanese) company. You see, U.S. corporations are facing a perception problem in today's troubled "reputation economy."
"...particularly since the financial crisis, big Chinese companies are seen as offering less-risky jobs with more growth potential."
In short, it's risky to work for a U.S. company that will just stagnate until it then shrivels and dies.

On the topic of job opportunities, you would think a company like Sands China would offer everything that a globe-trotting executive would desire: growth industry (gambling in China), U.S. parent company, seasoned international management. But before you send off your resume, you'd better determine if you meet the strict age and race requirements (in the Macau Daily Times):
"Local gaming operator Sands China wants to have a new Chief Executive Officer (CEO) in place by the end of this year according to the company’s acting CEO Michael Leven, and the company would prefer the appointee to be Asian. “It doesn’t have to specifically be a hospitality or casino executive, but definitely someone with the right age and experience."
It IS very common for Asian companies to state in ads, etc. that they want someone of a certain age and they usually even request a photo. We don't know (or care to do the work to find out) if Sands China is allowed to have blatantly discriminatory hiring practices and operate completely outside of U.S. EEOC regulations (if it is a U.S. company, I would say no). Legality aside, this is an astoundingly non-PC attitude for the leader of a major company to be displaying in a public forum. And, they surely will be deluged with applicants as Leven says you don't need any relevant experience and just simply need to be the right age and race.

Thanks for reading
Jonathan Gardner

Lacking any Real Industries, US to Switch to 'Reputation' Economy

Today, we serve two and only two masters: revenue and reputation. The trick is to position your brand and build your reputation in the sweet spot between capitalism and humanism.
Forbes magazine has put out on the interwebs a short opinion piece about the importance of corporate reputation. This is mostly a big "what else is new?" for the 3 troglodytic companies out there that are still unaware that their image can drive success. But it is always good to preach the smart stuff, even to the converted. The writer, Anthony Johndrow, is with something called the Reputation Institute, and he does pretty nice work of restating why -- especially in this economy (the justification for basically every business article right now that would not normally be considered newsworthy) --
"Companies that are leading the reputation economy are not doing one or the other [serving 'two masters']. Rather, they are able to tie both their products and services and their corporate image together in the interest of both"

I think it's a bit silly to really start calling anything the "reputation economy"(what the what?!). Anyway,  we're basically in the "circling the drain" economy or maybe the "suffering-based economy." The piece is still worth a read. You can find it here.

Thanks for reading.
Jonathan Gardner

Wednesday, August 18, 2010

Foxconn's Rx for Suicide Prevention: Try PR!

Foxconn, maker of iPhones, iPads and Dell Computers is notorious for its ghastly treatment of its workers in China, to the extent that at least 12 laborers have killed themselves this year. So, what do you do if you want to save lives and prevent suicides? If you answered "treat workers humanely every day" or "show you care" or "end sweatshop conditions" you'd be wrong. The answer, according to Foxconn: hire a PR firm! That's right, instead of fixing a problem, you can just pretend it's been fixed, all through public relations.

Under pressure from Dell, HP, Apple and world opinion, Foxconn, a Taiwan-headquartered company with 900,000 employees in China, decided to clean up its act. It has provided modest wage increases to staff to try to end the spate of suicides. The company has installed suicide-prevention nets around buildings to try stop the preferred method of death. And, they hired Burson Marsteller, a US PR company.

The big PR firms are of course notorious for not being so choosy about who they wind up in bed with. Burson Marsteller has (not sure if they still do) worked with tobacco giant Phillip Morris/Altria for years in Asia. One of my former employers was doing PR to try to clean up the image of deposed Thai Prime Minister (and fugitive from justice) Thaksin Shinawatra. PR companies are constantly working for the wrong side (like Brunswick PR and Ogilvy, who work for BP), so this should come as no surprise. We explored their lack of ethics overseas in an earlier post.

Instead of working long-term to change their company culture, treat workers decently and show the world how they've changed, Foxconn is now resorting to PR stunts. As a colleague used to say "it's just pink paint" (as in, don't fix a problem, just paint over it in a pretty color).

So we get word that the company is forcing its staff to trot out for "motivational rallies" reminiscent of something in Pyongyang.  The Huffington Post has the story and shockingly Mao-esque photos (here). Forget that it looks absurdly stage managed and the workers mostly look bored or miserable, but who is this for? Is this for the "Terry" on the signs they are forced to carry ("Terry" Guo, the president of Foxconn)? Is it a big show to impress "dear leader" with the "spontaneity" and joy of his people?
One activist said Foxconn's Wednesday rally was unlikely to boost morale and does not replace the need for more thoroughgoing reforms."I don't think today's event is going to achieve anything except provide a bit of theater," said Geoffrey Crothall, spokesman of the China Labor Bulletin, a labor rights group based in Hong Kong. "Basically what Foxconn needs to do is treat its workers like decent human beings and pay them a decent wage. It's not rocket science. They're still tackling this from a top-down approach, they are organizing the workers. They're not allowing the workers to organize themselves."
 This story has been burning up the internets, and a commenter on Gizmodo had a good point:
It's sad how many companies think that a "Team Building" party alone can raise morale. It's actually an insult if the rest of their actions stink. If you beat your wife all week but buy her a dozen roses on Friday afternoon expecting sudden happiness you're likely to get a smack on the face. Treat your employees well every day, provide them with a decent work environment, encouragement, purpose, inspiration, and room to grow and THEN once you've proven to them that you actually care, THEN throw a party. And for the love of Justin, don't call it a "Team Building Party".
This kind of managed media event for the domestic China market (surely that's who this is aimed at, with the younger, make-up spackled young women front and center in photos) plays very well. While, we in the West tend to mostly be VERY skeptical of what we see in the press, in Asia, and especially China where most media is still state controlled or constricted, what you see in the media is taken as gospel by most everyone. The average newspaper reader (or factory worker) in China would have no idea that these "rallies" are fake PR events and the workers neither participated enthusiastically nor do they worship the cult of "Terry" Guo.

So, for PR effect, Burson Marsteller may have given its client some good service in the local China market. But Foxconn and their PR counselors should be aware: here in the US (you know, where Apple and Dell are) we are not buying this load of bunk. You should be REALLY cleaning up your act, not just going through some phony motions. You can't spin me, baby!

Thanks for reading.
Jonathan Gardner

UPDATED: Wired has a great piece on this whole fiasco here (good comments too!)

Tuesday, August 10, 2010

PR Guy Scared HP into Firing Hurd?

When HP needed justification in axing CEO Mark V. Hurd recently, they called in a consulting firm - one that is inexperienced in crisis communications or even tech - to give them grade-school PR 101 advice that amounted to "scandals are bad and scary."

When this story blew up last week, initial reports focused on allegations by an actress/marketing consultant (aren't they all multitasking these days) named Jodie Fisher that Hurd had sexually harrassed her. These charges proved untrue but an investigation showed that the CEO had submitted inaccurate expense reports to the tune of $20,000. All in all, the story had a little sizzle and no steak.

Then Hurd announces his "resignation" last Friday and we find out he'll get around a $37 million payout.

All the while, behind the scenes, the board at HP was being advised by something called APCO. We dug a little and learned this is a PR firm (that few have ever heard of). A PR rep had been counseling the company ahead of this scandal (just how much of a heads-up did they have?). The PR person used some classic fear tactics to get their client to act ("if you don't fire this guy in 24 hours, the world will end...and Fox News will say bad things about you!") But what they were told, really was of the "monsters are under your bed" variety.

Says The New York Times:
At a presentation to the directors of H.P., the public relations specialist from APCO cited recent sexual imbroglios like the one that diminished Tiger Woods. The specialist cautioned that only 20 percent of top executives survive these types of allegations and then they usually end up leaving because of the weight of negative publicity. He also warned that Gloria Allred, the celebrity lawyer representing Mr. Hurd’s accuser, would thrust H.P. and Mr. Hurd into a media nightmare...The representative from...APCO... even wrote a mock sensational newspaper article to demonstrate what would happen if news leaked.
Now, whether you agree or not about HP firing Hurd - who seemed a pretty effective leader - I'm more interested in this approach. The scare tactics the PR guy used would normally only work on/be employed with fairly unsophisticated clients (or on children afraid of the dark). One would think the HP board would be fairly with-it people who wouldn't need the PR 101 lecture. In short, this is all PRETTY OBVIOUS stuff that we would use when we were talking to client audiences holed up in some 4th-tier city in a 3rd-world country who had never even HEARD of PR. So, what he's saying is essentially true, but I can imagine the eye-rolling and smirking going on as he delivered his "presentation" (a crappy PowerPoint with his homemade newspaper stories?). It's all very grade-school.

He may have been appointed to this task solely to provide cover. I think we can all be sure some "account supervisor" from APCO didn't spur the board of HP, a mega-billion-dollar corporation, to make such a huge move. It is possible that a few members of a board - which had already decided to act - brought him in to add to the momentum on the decision-making and at least make a show of getting outside opinion. Though you would think they would bring in a brand-name, big PR company or management consultancy.

Surely, the PR rep is getting lots of slaps on the back at his cubicle today. We can be sure that whoever gets a new business pitch from APCO in the near future will be seeing a slide/hearing a shpiel about "providing critical crisis and issues management c-suite counsel to HP." Let's forget the fact that they actually "...[do] not have a particularly strong reputation for crisis management or technology expertise." If you happen to be subjected to this presentation, just remember: there are no monsters under the bed.

Thanks for reading,
Jonathan Gardner

Friday, August 6, 2010

Haagen-Dazs Lies to Consumers in Taiwan

We all know brands often try to "reposition" themselves when they move to a new market - Mary Kay and Buick marketed as "luxury" brands in Asia, etc. - but sometimes this re-imagining can take the form of BLATANT lying. Take the case of Haagen-Dazs Taiwan for example.

We wrote at length (HERE) about Western brands "fauxscaling" (you heard the word here first!) when they move to Asia, trying through PR, marketing, etc. to become something they so truly are not back home. In Taiwan, Haagen-Dazs (a former joint venture now wholly owned by parent company General Mills), has for years positioned itself as an upscale luxury brand. They've done fairly well at it. The couple dozen retail outlets are nicely appointed, with a "European cafe style" vibe, attracting date-nighters and families. They push elaborate sundaes and confections, the likes of which we would A. never order and B. never find in U.S. Haagen-Dazs scoop shops. On encountering the brand in a supermarket or convenience store, you can expect to pay US$10 or MORE a pint. I know, it's hard to believe that they are able to get away with positioning the brand like this, especially when the other week CVS (a FAR from upmarket retailer) had Haagen-Dazs on special, two pints for $3.

But that's not even the worst of it. When I visited Taiwan Haagen-Dazs outlets, I was often confused by the language on the menus, brochures and other POS items that featured convoluted origin myths, placing the companies birthplace somewhere on the European continent. "That's absurd," I would cry, "Everyone knows that the company was started by Polish (yes, I realize Poland is in Europe) Jewish immigrants who lived in the Bronx and opened their first retail outlet in Brooklyn." But most people just chose to ignore me, or couldn't understand my broken Chinese anyway.

We find our fauxscaling Haagen-Dazs friends are up to no good once again in Taiwan. On their website is an EVEN MORE outlandish bit of lying marketing garbage: "Haagen-Dazs is originally imported from France." That's right, I'm not making it up. In the screen grab below, the full paragraph of Chinese text begins with a line that says that.

The rest of the paragraph talks about how their strawberries come from Poland (um, is that supposed to impress me? I like my Driscoll's from Cali), their green tea from Kyoto and their milk from France. Yes, maybe their milk comes from France but NOT THEIR ICE CREAM. Nor did it ever come from there. It has always come from factories in the U.S. (the mix comes from there and is blended in ASIA, not Europe, not France or anywhere near there). They also have a factory in Taiwan. Even if you don't agree that this is terrible, terrible lying, at the least it is very disingenuous and misleading.

I will tell you one thing though, the lying FOR SURE doesn't end with their website. Based on my experience in the Taiwan market, I can nearly guarantee the local management has trained waitstaff to talk up the "European heritage" and that they "import" their products from Europe. You see, they have been doing this all along. The many, many people I know in Taiwan are all convinced that Haagen-Dazs is a European brand/company. Maybe someday they'll believe me when I shout otherwise.

As we discussed about fauxscaling, there are tremendous risks involved. There could be a local backlash against the brand, and this kind of brand mythologizing could negatively affect their global brand. It's a good bet the U.S. folks at General Mills didn't know their local Haagen-Dazs unit was up to these shenanigans and probably don't really care what they do as long as they deliver results. Of course, that's all good UNTIL they do something that would embarrass the home office. You know, something like lying to local consumers.

Thanks for reading.
Jonathan Gardner