“Silly” remark by Everything Everywhere chief lets slip truth about T-Mobile brand

October 26, 2011

Dear Mr Swantee

How do these female Telegraph journalists do it? Trap you into saying things you didn’t really mean to say, that is? Not many months ago, Mr Cable was silly enough to tell two such hackettes that Mr Murdoch’s empire was thoroughly evil and that he was going to put a stop to it, just when he was supposed to be impartially adjudicating the self-same Mr Murdoch’s bid for BSkyB.

Now you, too, have been very silly. Or, to be more precise, you have been caught rubbishing Everything Everywhere, the brand name of the company where you are chief executive.

Here are the very words you used, as reported by the delightful Katherine Rushton:

“Everything Everywhere is not a brand, it’s a silly name with a stopping effect”, he said, although he maintained it was useful for stores which house the two mobile brands.”

Now I know what you’re going to say; in fact what you have said: just like poor old Vince, you were quoted out of context. His context was entrapment; yours we’re going to work on a bit – just in case there’s any misunderstanding.

The first thing I’d like to make clear is that we are all right behind you. Not only do we admire the candour of someone in so senior and responsible a position voicing what we have all long since judged to be a self-evident truth (just, as it happens, we did with Mr Cable). We are also quite prepared to accept that journalists, with their obsession for compression, tend to miss the bigger picture.

I expect, when you were describing your corporate brand as “silly”, what you were really doing was employing a bit of time-honoured rhetorical licence: using the part as shorthand for the whole. It’s not Everything Everywhere the brand that is “silly” with “a stopping effect”, but the brand strategy behind it. That, surely, is the bigger picture that got left out of the context.

Right from the beginning, that brand strategy has been misconceived, hasn’t it?

I mean, the initial idea was all right as far as it went: putting together 2 failing UK mobile telecoms brands in one brand-new holding company and, overnight, transforming yourself into UK leader by customers, ahead of those snake-oil people at O2. What a clever sleight of hand, and one that avoided Orange and T-Mobile experiencing serious difficulty with the competition authorities into the bargain.

The trouble is, your predecessor Tom Alexander wasn’t empowered by his twin masters, France Télécom and Deutsche Telekom, to take the idea any further – and you were left to clear up the mess that resulted. 50:50 ventures never work, do they? Still, you’ve done what you can, within the agreed terms. You’ve swept away all those unnecessary backroom boys and girls, stripped out excess infrastructure, rationalised the shops, brushed up the margins, cleansed the boardroom of useless, nay-saying, former T-Mobile executives and ploughed on with a leaner, meaner Orange team. Yes, Sirree, having worked at HP before you joined France Télécom, you know just about everything there is to know about consolidating tired, low-growth companies.

But one thing they haven’t let you do is to slay the elephant in the room. Yes, I know what you said when you took over earlier this year:

“The T-Mobile customers want a flexible payment and usage system. The Orange customers want a predictable amount paid every month. There is a clear difference.”

But the justification for that difference is becoming less and less apparent, isn’t it? Look at your latest, Q3, figures: pre-paid, plummeting; contracts up. T-Mobile’s days as a UK brand are surely numbered.

Truth to tell, Orange is and always has been much the stronger brand; better serviced too. Maybe, if there hadn’t been all that fudging at the beginning by your corporate masters, then the figures would have been a lot more convincing than they are today. And your brand hierarchy a lot more coherent. Without T-Mobile to worry about, poor old Tom would never have had a nervous breakdown trying to justify the vacuous sticking-plaster of Everything Everywhere – as the best of all branding in the best of possible worlds, when it patently wasn’t.

No wonder you let slip your frustration with a “silly”, unguarded remark.

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EC chief will sanction eavesdropping online if admen agree to behave themselves

October 22, 2011

Ever heard of Robert Madelin? The chances are you have not. Don’t worry, it won’t hold you back in life. Unless you happen to be a major advertiser or senior advertising executive. In which case, you should be ashamed of your ignorance.

Forget the Bailey Report, forget erotically charged images on posters. The frontiers of commercial freedom have already moved to a more strategic battle-front. One where the weapons of choice are electronic spies and surveillance.

If advertisers win this battle, the prize is very great. Using what is termed “behavioural targeting” – (sometimes “behavioural analytics” or “online tracking”, but let’s call it BT for the sake of simplicity) – they will be able to plot the course of any internet journey an individual ever makes. True, they won’t be allowed to know that individual’s real name, date of birth or physical address. But they will, by inference, be able to draw over time an incredibly intimate portrait of his or her most heartfelt material desires.

BT is, or rather will be, infinitely more valuable to advertisers than their best current tool, contextual advertising – which relies upon careful targeting of web-page content rather than anything known about the disposition of its visitor. Andrew Walmsley, a noted industry expert on the subject, is in no doubt that BT will supplant demographics-based contextual advertising:

We’re still going to see demographics used online, but principally so it can be benchmarked against other media. But, just as we sometimes hear the Fahrenheit temperature given on the weather forecast, it’s really just for the old folks.

His article is, by the way, a useful reminder that not all BT is the same: there are at least six varieties, of varying potency.

So, win-win: bring it on. Except, of course, that BT is deeply invasive of individual privacy. Technically, it relies upon access to an electronic spy – a special kind of cookie – planted in the heart of every individual’s hard-disk drive. Without consent, its exploitation could be considered not only an infringement of the Data Protection Act, but the wider European Human Rights Act. Many civil rights advocates would go further and invoke the shade of George Orwell. Unregulated, information acquired through online tracking could pass into the hands of shady, unlicensed third-party operators – for example, totalitarian-minded apparatchiks or deeply unscrupulous businessmen – with who knows what consequences for our civil liberties.

I come back to Madelin. Who is he? None other than the director general of Information Society and Media, European Commission (EC/INFSO for short). In other words, the senior civil servant in charge of the Brussels bureau concerned, among other things, with reconciling the needs – commerce among them – of the information society and EU civil liberties.

One of Madelin’s unenviable tasks is to act as ringmaster in the interpretation of a new ePrivacy Directive, promulgated in May this year but only fully effective from next spring.

A key bone of contention between the two warring factions he must conciliate – let’s call them “industry” and “civil society”, because that’s what they call themselves – is whether the new legislation actually requires “prior informed consent” being given to any organisations wishing to place or access files stored on a personal computer. And if so, just what definition is placed on the term ‘file’.

An extreme interpretation of these new rules would mean unmitigated triumph for the privacy lobby. Every time a cookie (not all of which are concerned with online tracking, of course) came up, it would have to be accompanied by a pop-up demanding instant consent or denial. Tedious in the extreme for the online user, and disastrous for industry.

The more nuanced civil society position seems to be an “Opt In” choice for the individual user, backed by  statutory legislation, but applicable only to those cookies capable of commercial online tracking.

Not surprisingly industry, whose position has been articulated by the Internet Advertising Bureau and something called EASA (European Advertising Standards Alliance), is having none of this.

It believes the civil society stance is flawed and naive. Specifically, the privacy lobbyists fail to understand that the free advantages we enjoy on the internet these days  – such as email, news, social networking, maps, entertainment – have only come about because they have been subsidised by advertising revenue. In this sense, BT is merely “the next stage” in a process which has been going on for two decades.

Worse, what lurks behind the civil society position is not so much a concern for advancing individual privacy as a profoundly hostile attitude to commerce – which is regarded as sinister and manipulative.

Industry is not arguing there should be no restrictions on BT, merely that they should be – you guessed – minimal and self-regulated; in fact, drawn up on the British ‘voluntary’ model of advertising regulation. It disputes that the “informed consent” required by the new legislation need be “prior”. Hence its adoption of what we might call an “Opt Out” strategy.

Put simply, the industry proposal amounts to a website where consumers can block online tracking by going through a long list of advertisers (those at least signing up to the IAB initiative) and clicking on check boxes. This mechanism will be identified by an icon appearing on sites where commercial tracking technology (particularly third-party cookies) is being used. And promoted along the lines of ‘better technology leads to a better life; but you, the consumer, remain in control’.

There is some doubt – even within the industry camp – that the IAB-devised plan will be enough to turn the trick on its own. Nevertheless, industry is becoming increasingly confident that is has won the day, barring a few concessions.

This confidence was backlit a few months ago by some extraordinary shenanigans in Brussels, when one member of the civil society faction stomped out of a Madelin-chaired committee meeting and subsequently accused Madelin of being “captured by industry“.

What this seems to mean is that Madelin has indeed come down in favour of Opt Out. But there will be a price to pay. It will include an open, independent, audit to which advertisers will have to submit themselves; total transparency (whatever that means, exactly) in their dealings; and an effective consumer tribunal for handling any complaints.

A key voice in all of this will be that of Chris Graham, the UK Information Commissioner and – as former chief executive of the Advertising Standards Authority – something of an expert on how the self-regulatory system works. (Purely coincidentally, the ASA is likely to be the UK  regulator if Opt Out prevails.)

Graham has yet to pronounce ex cathedra on the subject. But the broadly benign texture of his views can be gauged by a visit to the ICO website, where the talk is of the industry facing up to ‘transparency’ and ‘independent audits’.

My understanding is that the advertising industry is being given a few more months’ grace to define its regulatory position satisfactorily. Failing which, Madelin will move down the path to statutory legislation. As can be imagined, every sinew will be stretched to ensure he does not feel the need to do so.

Before leaving this convoluted subject, it might be of passing interest to hear what the punter, rather than self-appointed experts speaking on his behalf, thinks about BT.

Handily, McCann Erickson has just published a relevant piece of research under the McCann Truth Central banner. The study, which quizzed 6,500 people in the US, UK, Hong Kong, Japan, India and Chile, shows that people are indeed concerned about attacks on their personal privacy. But targeted marketing is way down the list of threats, the two principal issues being the security of financial data and the security of personal reputation.

McCann WorldGroup global IQ director Laura Simpson notes that:

65% of people around the world are aware of Web tracking and 44% are aware that marketers use it to determine the interests of consumers. “Many welcome it,” she adds, because they believe there is a fair exchange, including access to promotions and discounts and ads directed at them that are more relevant to their needs.

Then again, as one industry commentator on the article points out, that enthusiasm may be conditioned by poor understanding of how sophisticated BT actually is.


Will Rupert Murdoch really jettison James as NewsCorp’s heir?

October 19, 2011

It’s possible that Rupert Murdoch allowed himself the ghost of a smile on hearing that Michael Wolff – one of his most vociferous and tiresome tormentors – had been defenestrated from his fastness at AdWeek.

We might like to think of AdWeek as a trade magazine covering the US advertising, media and marketing scene. But for the past year it has been hijacked by Wolff’s anti-Murdoch agenda and shamelessly exploited by the former editorial director as a scandal-sheet covering every last detail of the so-called “Murdochcalypse”.

Murdoch will have been a good deal less pleased by what he read in the New York Times yesterday. Wolff is a gadfly, but the NYT is a seriously influential enemy which has taken it upon itself to drive a wedge between Murdoch and his presumed heir, younger son James.

It is not so much the content of the article as its timing that is so troubling. Murdoch and his brood are just days away from NewCorp’s annual general meeting that could theoretically see them unseated as directors. The last thing they need is another stinkbomb.

As it happens, the NYT article fails to come up with anything stunningly original. Provocatively titled ‘In Rift Between Murdochs, Heir Becomes Less Apparent‘ , it dwells on tensions – real and possibly imagined – between the two men in the hope of creating so much further bad blood that Murdoch père will eventually perform an Abrahamic sacrifice of his son’s career prospects in order to save his own skin.

Certainly Murdoch senior has been performing a skilful dance of the seven veils to protect his reputation. First he closed News of the World, and abandoned his cherished bid for BSkyB.  When that didn’t work, he sacrificed his faithful retainers Les Hinton and Rebekah Brooks. The tide of effluent still failing to ebb, he contributed millions, individually and corporately, to the Milly Dowler Fund.

For a while, the NewsCorp share price appeared to bounce back. Then came the hammer blow: a major shareholders’ revolt, partly sustained by new evidence of malpractice in the NewsCorp empire, this time at The Wall Street Journal.

Something like 25% of investors are expected to vote against the re-election of the Murdoch board on Friday. In almost any other public company that would mean curtains. But not at NewsCorp, where – unluckily for the institutional rebels – nearly 40% of the voting shares are owned by the Murdoch family.

So not much is really going to happen in the short term. Except some searing humiliation, fanned by the NYT. The worse it is, the poorer James Murdoch’s chances of eventual survival.

And that’s before his return for further grilling by the House of Commons media select committee, over the porkie pies and half-truths uttered during his last appearance.


Iceland’s president invites you to tea

October 17, 2011

I’ve just been viewing what must be the ultimate piece of crowd-sourcing. Practically the whole population of Iceland (roughly 320,000), from the president downwards, seems to be engaged in a single-minded campaign to reboot their poleaxed economy by inviting you to their home as a guest.

I’d hurry, though. The delicious pancakes with the president and his delightful wife, Icelandic sushi with the bashful mayor of Reykjavik and therapeutic thalasso-footbath with the comely minister of industry, energy and tourism, look like a strictly limited offer, ending in November.

The campaign has been devised by Soho-based agency The Brooklyn Brothers, and trades on an earlier multi-disciplinary Inspired By Iceland concept that recently won them agency of the year and the grand prix at the Euro Effies. Here’s what the blurb had to say:

This campaign involved Icelanders in telling their stories to the world. In July 2010, Iceland hour was created during which Icelanders went online and told the world how much they love their country. Even the Prime Minister got involved!

Within 2 weeks of the launch, over 85% of Icelanders were aware of the campaign. After 6 weeks, over half of the Icelandic public had contributed stories. Within just 10 weeks, the country was perceived as a safe place to visit again, visitor numbers were up 27% against forecasts. The first quarter of 2011 has seen Iceland’s highest tourist numbers ever.

On Facebook alone over 45,000 fans were recruited and over 2 million stories were seen and sent out by fans. Between June and August the live webcams were viewed 60 million times.

In total an additional 73 thousand tourists visited the country from Europe, worth an additional £127.4m to Iceland’s economy. The total campaign expenditure was £2m within this period, giving a short-term ROMI of 62.7:1.

What short-term ROMI will the President’s pancakes create? I must say I’m tempted to help him find out. Anyone interested in the offer should consult inspiredbyiceland.com .


Who’s to blame for prostituting the integrity of the WSJ and TechCrunch? The internet

October 14, 2011

At first sight, there may not seem much connection between AOL’s recent dismissal of Michael Arrington, founder of TechCrunch, and a spectacular scam at the Wall Street Journal, which this week brought down its European publisher Andrew Langhoff.

Don’t be deceived. There is every connection. Not in detail, but in principle. Both executives were fired because they had prostituted editorial integrity.

It’s fairly evident that neither deliberately set out to do so. Rather, they were attempting to apply imaginative (and increasingly desperate) commercial solutions to a problem endemic in the news information business. Namely, the pernicious effect of the internet – the ‘free news’ junkies’ hourly fix – on traditional advertising revenue.

Arrington had to go because his cavalier attitude to conflict of interest put him on a collision course with Arianna Huffington, editor-in-chief at AOL – who was rightly concerned about the impact of his heretical gospel on the rest of AOL’s news assets (chiefly the Huffington Post).

Although TechCrunch, which AOL acquired for $30m last year, is a respected news source, as a free blog it was badly underfunded by the low-yield advertising which was the only traditional alternative to subscription revenue. Arrington’s solution was to set up CrunchFund, a venture capitalist fund specialising in new technology companies. Which aspiring tech company would not trade exclusive stories with TechCrunch in the hope of coming into contact with untold Wall Street riches? Investors, on the other hand, soon came to recognise TechCrunch for what it was: an invaluable source of investment-grade information.

The problem was what happened next. Should TechCrunch journalists, to all outward appearances acting without fear or favour, be obliged to soft-pedal any clients who signed up to Arrington’s fund? The new funding paradigm soon became a very old-fashioned conflict of interest.

The WSJ/Langhoff affair also breached journalistic ethics, but in a rather different way. Officially, Langhoff was fired because he had signed a deal with Dutch consulting firm Executive Learning Partnership which resulted in a series of special reports considered in breach of the WSJ’s ‘unimpeachable’ standards of editorial integrity. In fact, this was only the half of it, according to The Guardian. Apart from trading too much prominence and name-checking, Langhoff also seems to have struck an interesting side-deal with ELP’s sponsorship money (ie, advertising revenue). ELP was to channel money (including, at a later stage, some of the WSJ’s own money) into buying a large number of heavily discounted copies of the European edition of – the WSJ. This action is not illegal nor, strictly speaking, does it break the Audit Bureau of Circulations’ rules (Why not? we should ask indignantly). But it is designed to deceive. Inflated ABC figures give advertisers the impression that the WSJ is a stronger media vehicle than it actually is, which helps to harden rates.

While denying some of The Guardian’s more “malign interpretations”, News Corp – which owns the WSJ through Dow Jones – has nevertheless conceded that Langhoff had to go because he had allowed WSJ to enter into “a broad business agreement” which could “give the impression that news coverage can be influenced by commercial relationships.”

If respected operators like WSJ and TechCrunch are getting up to such tricks, where does the rot stop? The answer may not be very comforting for the integrity of news values in general.


Will Nick Brien succeed in steering McCann off the rocks?

October 13, 2011

McCann WorldGroup is critical to the performance of Interpublic, the world’s fourth largest marketing services group; it provides about one third of its revenues.

Just recently it hasn’t been doing very well, a worrying state of affairs both for IPG shareholders and McCann’s chief executive of about 18 months, Nick Brien.

The fact is, it has not won any major new business under Brien’s stewardship. Worse, it is in deep trouble with two of its core clients, Nestlé and L’Oréal.

Last month, Nestlé expressed the depth of its displeasure by assigning all of McCann’s signature Nescafé business (nearly everything, globally) to rival Publicis Groupe. Reportedly, that’s $25m revenue down the Swanee.

Now comes news that McCann has screwed up its already troubled relationship with beauty house L’Oréal (which, by the way, is about 30% owned by Nestlé).

The Nescafé affair might – might – be written down to bad luck. Clients do move on eventually, even ones like Nestlé that have been with McCann for several decades.

The L’Oréal fiasco (for such it is) can, on the other hand, only be ascribed to McCann’s managerial incompetence. Stay with me, the story’s a bit complicated but bears retailing.

L’Oréal and its Maybelline brand are even bigger business for McCann than Nescafé: together they account for $100m a year IPG revenue, of which 80% comes out of McCann (according to AdWeek).

Historically, the relationship has been somewhat complicated by the fact US creative for Maybelline is handled by another IPG agency, Gotham, although McCann is responsible for adapting and distributing that work throughout the rest of the world.

Thinking, no doubt, that the account could be more efficiently run as a spin-off unit with its own profit and loss account, Brien and his lieutenants have spent the last year, and an enormous amount of money, creating something called Beauty Village.

Beauty Village was set up at the instigation, and with the full collaboration, of Cyril Chapuy – now global brand president of L’Oréal Paris, but formerly in charge of the Maybelline brand.

Client endorsement enough, you would have thought. But apparently not. No one had checked upstairs with the ‘C Suite’ at L’Oréal, with the result that Beauty Village has now had to be razed to the ground, despite all the hullabaloo a couple of months ago attending its launch.

Fairly or not, the buck for this disaster is going to stop with Brien. Already there is innuendo that the former media man has not got the client-handling skills it takes to run an organisation like McCann.

Whether that is actually true I’m not so sure. Media men may be direct rather than placatory by nature, but that has not stopped the likes of Tim Bell and Rick Bendel (formerly COO of Publicis Worldwide, now marketing supremo at Asda) succeeding in more senior roles.

Besides, there may be a silver lining to the cloud now settling over Brien’s head. At first sight the Nestlé and L’Oréal affairs look like unforced errors playing into the hand of Maurice Lévy, head of Publicis Groupe (core clients, both, at Publicis Worldwide). But Lévy has troubles of his own, with the Nestlé relationship at any rate.

For one thing, he has just lost Carter Murray, his key Nestlé point man, to WPP – which poached him as president-CEO of Y&R Advertising North America. Murray managed to raise Nestlé to Publicis’ premier and most profitable client.

For another, Lévy appears to have overplayed his hand by winning the £250m Ferrero European media business last month. Yes, it’s only media and, yes, a small part was already handled by PG media arm Zenith Optimedia. But now that Ferrero has upped the ante, Nestlé is feeling distinctly uncomfortable about sharing a media agency with its most deadly European rival.


“Bonking” Boris – the world’s worst brand ambassador for discreet nookie

October 10, 2011

You’ve got to admire the chutzpah – if nothing else – of those smart cookies at Ashley Madison. Using Bojo as a pirated pin-up boy for their national advertising campaign targeting the professionally promiscuous looks like a stroke of marcoms genius.

“Affairs Now Guaranteed! No Matter what you look like,” screams the copy. And there opposite it is the seemingly perfect complement, an image of the Tousled Philanderer, whose extramarital indiscretions are a matter of public record.

So, top marks for clear brand identification. Top marks also for effective use of media on a small budget. Like any successful political poster campaign, this one relies on stretching very little money a very long way through maximum media leverage. A so-far-single poster (erected in Camden, London) has neatly achieved national coverage in a matter of hours.

What’s more, Boris has managed to add reinforcing feedback, if entirely involuntarily. As can be readily appreciated, the affronted London Mayor regards this exploitation of his private life with all the relish attending a visit to the dentist for root-canal surgery. But threatening legal action is only going to make matters worse, by directing more attention to the campaign.

Ashley Madison is smugly aware of this; it has done its homework. No one is going to complain to the relevant regulator, the Advertising Standards Authority, for the good reason that AM has not, apparently, transgressed any of its rules. And, as for legal action, AM has an answer for that as well: “If the Mayor exerts the influence of his office to take it [the poster] down, we will proceed with our own legal action for tortuous interference of a business venture,” opines its managing director Noel Biderman on Campaign’s website.

I have just one quibble with this campaign, and it’s not what you might think. On its website the infidelity broker makes great play of one of its key brand attributes: it is, apparently, ‘The world’s leading married dating service for discreet encounters’.

Bojo discreet? Don’t make me laugh. Let’s just remind ourselves of that highly confidential record. Alexander “Bonking” Boris de Pfeffel Johnson was sacked from the shadow cabinet’s front bench in 2004 for lying to then leader Michael Howard about the four-year affair he had been conducting with champagne hack Petronella Wyatt. There is reasonable circumstantial evidence (according to the Daily Mail, at any rate) that he has recently fathered the son of wealthy socialite Helen Macintyre. More recently still, he has muddied already turbulent political waters by appointing his (now-ex) mistress as a fundraiser for the Olympic Park sculpture, shortly after her official partner had contributed £80,000 to the self-same project.

It may well be that the Mayor of London can walk on water. But I would advise clients of Ashley Madison not to think they can do the same.


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