Is now the moment when The Sun brand begins to set?

January 29, 2012

Arrested: four senior Sun hacks, plus an allegedly bent copper.

Is this the moment that damage to The Sun brand becomes systemic and unstoppable?

Not if News Corp, which ultimately owns the title, has calculated correctly. After all, the information that led to the arrests – carried out as part of the Operation Elveden investigation into police corruption – was volunteered by the company itself. It’s a gesture clearly designed to demonstrate that the House of Murdoch is now whiter than white, thanks to the “fearless” probing of its so-called Management and Standards Committee (driving force, former Telegraph editor-in-chief Will Lewis).

Sacrificing the prospects of 4 more Sun employees superficially looks like a shrewd way of cauterizing existing brand damage. But on one condition only: that no more evidence of criminal behaviour comes to light. And who, in the circumstances, is going to guarantee that?

Because these four are not the first Sun staff to be arrested. Remember Sun district editor Jamie Pyatt, who was assisting police with their inquiries last November, and has now been bailed until next March? The suspicion must linger that more arrests – inextricably linking The Sun to the culture of criminal deception imbuing other parts of NI – are on the way. And how might that play with advertiser sentiment?

When perception will actually catch up with reality is, of course, anyone’s guess. One of the remarkable aspects of this marathon phone-hacking (computer-hacking and police bribery) scandal is how long everyone at News Corp rival Trinity Mirror – from CEO Sly Bailey down to Daily Mirror editor Richard Wallace and, indeed, The Mirror’s most famous alumnus of all, Piers Morgan – has been able to cling to the increasingly threadbare “Three Wise Monkeys” defence strategy. Only the other week, Bailey was telling the Leveson Inquiry that she had never launched an inquiry into potential journalistic abuses “because she had never been given any evidence of it“. Of course she hasn’t. Which turkey ever votes for Christmas?

UPDATE 30/1/12: Nick Davies, the man who has done more than anyone else to break open this scandal, clearly sees the arrest of senior Sun editorial executives as a pivotal moment. In his Guardian piece today, he suggests that News Corp has now lost control of its own database, and therefore the ability to obstruct further disclosures. With potentially terrifying consequences for a lot of senior people in the Murdoch news organisation. See ‘Mysteries of Data Pool 3 give Rupert Murdoch a whole new headache‘.

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Just Lovin’ It (Not) – Part 2. McDonald’s chokes on its social media initiative

January 26, 2012

When will brands with a corporate reputation problem finally realise that social media – whatever its siren attractions – is not for them?

Not yet, as evidenced by the so-called “McFail” initiative. Last week, McDonald’s (yes, the Brand the World Loves to Hate, see my earlier post), bought two “promoted tweets” – Twitter’s answer to generating advertising revenue. The aim, apparently, was to persuade McDonald’s customers – those presumably with an excess of serotonin in the bloodstream – to share their happy-clappy experiences with the world.

Surprise, surprise, the clickable Twitter “hashtag” McDStories was (all too easily) purloined by mischievous malcontents. Very soon, instead of reading about McNuggets like Grandma used to make them (not), we were subjected to tsunami-force tirades on alleged animal-welfare abuse, wage slavery, food poisoning induced by McD fare and graphic descriptions of the bodily symptoms that accompany it.

By about 1400 hours Eastern Seaboard Time, D-Day, Operation McDStories had been ignominiously aborted. “Within an hour, we saw that it wasn’t going as planned,” explained a baffled Rick Wion, McDonald’s US social media director. “It was negative enough that we set about a change of course.”

Too right, Rick: a 180 degree one, to avoid losing your job.

Before you ask what planet Rick and his McD chums live on, let me explain: it’s the same one inhabited by the folk at Dr Pepper (owner, Coca-Cola), Nestlé, Wendy’s and Qantas. All of these brands have, at various times, lived under the narcotic delusion that social media is a marcoms nirvana utterly divorced from the everyday travails of brand management – and experienced brutal cold-turkey on discovering it is not.

When they go well, social media campaigns are a dream: they inexpensively capture the zeitgeist. But the gains are purely tactical, while the reverses, however infrequent, tend to have asymmetrical, strategic consequences. Why? Because negative high-profile media coverage brings the feckless actions of Rick and people like him to the immediate attention of their CEOs, for all the wrong reasons. If McDonald’s chief Jim Skinner was previously unaware of Wion’s existence, he is no longer. #McDStories has, with one fell blow, managed to poleaxe Jim’s precious Good News story: burgeoning corporate growth in Q4. Not great for Rick’s career advancement, I suspect.


After all that, Joel Ewanick awards $3bn GM global media account to – Carat

January 24, 2012

It seems the keeper of the world’s third largest advertising budget is a bit of a tease. Only the other day Joel Ewanick, General Motors global chief marketing officer, was telling us that, six months into the review, he simply couldn’t make up his mind about where to place GM’s $4.26bn advertising budget. Agencies on tenterhooks. Could there be a last minute reprieve for them?

Aegis Group chief executive Jerry Buhlmann: $3bn Carat win should bring a smile to his face

No there could not. Actually, Ewanick had long since decided to give the largest chunk under review – the $3bn global media planning and buying business (bar India and China) – to Aegis-owned Carat. You read it here first, as long ago as early December.

If there was last-minute anguish over the decision, it more likely related to brinksmanship over Carat’s fee and the administrative nightmare of reducing a media roster of 40 down to a single agency.

That said, another part of the review may prove more of a poser for him. Ewanick has yet to pronounce on who will win creative duties for the mega-billion dollar Chevrolet account (it’s GM’s biggest brand, accounting for over half of vehicle sales). Omnicom-owned Goodby Silverstein & Partners looked safe with the bulk of the account since it was hired on Ewanick’s personal say-so soon after his arrival at GM. But there is talk that IPG agency McCann-Erickson – which already handles Chevy in India, China and Latin America – is destined to become the first Chevrolet global agency of record (ie, the senior partner).

We can only hope that, for the sake of embattled McCann Worldgroup chief Nick Brien, this rumour turns out to be true.

Because there is little solace to be found elsewhere. Universal McCann’s Latin American media business – sizeable and, more importantly, booming – will now be moving to Carat.

It could be worse though, Nick. Biggest casualty by far of the media consolidation (and indeed of the general review) is Publicis Groupe. PG’s media unit Starcom MediaVest has held the dominant US slice of the business since spring 2005 (back then, way before Lehman Bros and Chapter 11, it was worth $3.5bn a year).

Until now, PG has had a very strong year, mostly at WPP’s expense. Starcom managed to wrest the $600m Novartis account from MEC and its Digitas unit recently won the $1bn Sprint telecoms business. But the crushing GM media loss comes on top of other, collateral, damage. Big Fuel, the social media agency which Publicis seems to have acquired partly at Ewanick’s behest (it certainly came highly recommended) has overnight been reduced to a shell of its former self. By the self-same Ewanick’s unhelpful decision to move the GM account – about three-quarters of its income – elsewhere. Gives a new meaning to “Le Défi Americain”, doesn’t it?


Forget Big Brother Facebook – it’s sneaky little sisters we really need to worry about

January 20, 2012

By Robert Dwek 

Talk about love-hate relationships. We read this week that Facebook – with a mere 800 million plus accounts worldwide – is now among America’s most hated companies – thanks to the perception that it doesn’t really care about its users’ privacy.

When are we finally going to have the real debate about privacy – the one relevant to the 21st rather than the 20th century ? It’s what we might call Big Brother versus little brother, for reasons that will become clear in a moment.

Facebook was founded, as we all know thanks to the movie, by college geeks who wanted to assess the “fitness” of female students. In that respect, it was an extension of American high school, where the only privacy invaders are your peers.

This Facebook DNA has remained at the core of the company, no matter how world-conquering and gargantuan it has become. The Big Brother is not so much the evil corporate that is Facebook HQ – or for that matter the evil corporates who pay Facebook to promote themselves. No, the Big Brother lurking deep within Facebook is in fact … us. We, the 800 million users.

And that brings me neatly onto my little brother – actually, little sister – story. The other day my younger sibling who lives far across the sea, popped up on my computer screen, via Google Talk, with the words: “Enjoying Abba are we ?” What the ?! How the !! did she know my partner had been blaring out a bunch of Abba songs on her iPhone ? For a couple of seconds it was quite spooky.

But the (prosaic) answer came soon enough. I’d forgotten that sometime recently, in yet another unmemorable online moment, I’d allowed Spotify to tell the Facebook universe all about my music-listening habits. That is why Spotify-Facebook assumed it was me listening to Abba and put words to this effect on my Facebook page.

Here’s the problem when it comes to the potential evil of Big Brother: corporates like Facebook and Spotify – both relying on incredibly small numbers of employees relative to their global reach – will do almost nothing of interest with this data that they have collected about “me”.

These companies – and indeed most modern companies – have neither the resources nor the inclination to exploit all this data that they are supposedly collecting. I remember writing breathless stuff about the “database revolution” back in the early ‘90s, waxing lyrical about the impending golden age of “personalisation” and “one-to-one” marketing that was about to dawn. Well, frankly, it never did.

Most companies are utterly incompetent in using our data. Phone calls that are “recorded for training purposes” disappear into a black hole of indifference.

But marketers persist in believing their own propaganda. More to the point, consumers believe in it too!

The fact is, Big Brother died with the end of communism – he’s so last century. Little brother, however, or indeed little sister, is alive and well. Marketers finally caught onto little bro when they realised they were too lazy and incompetent to do the spying themselves. So they outsourced it – to their customers.

OK, I’m being somewhat tongue in cheek. Is forwarding a “viral” email spying ? Is my little sister’s commenting on my apparent musical taste something sinister ? Odd and unexpected, maybe, but sinister, no. The point is that We-The-People, we the seething mass of little brothers and sisters – we are the only ones who give enough of a damn to spy on each other.

So, the potential “evil” of a massively understaffed company like Facebook amounts to no more than its ability to empower our voyeurism.

The thing we should “hate” in a “most hated company” is not what they might do with our data but what we might do with it. And maybe we should be grateful for small mercies: my sister at least did something, and in a very timely way, with the information presented.

God bless outsourcing.

Robert Dwek is a writer, journalist and blogger, whose interests include marketing and social media.


Willie Walsh uses BA brand power to put a spoke in ‘Boris Island’ airport hub project

January 19, 2012

British Airways may not be the brand it was when the Saatchi brothers landed Manhattan at Heathrow nearly 30 year ago. But, as national flag carrier, it still packs a punch: it’s still the largest UK airline based on fleet size, number of international flights and international destinations.

What’s more, as a founder member of International Airlines Group, BA has with Iberia created the world’s third largest airline service by revenue and the second largest service in Europe.

So when its chief steward (or perhaps that should be pilot), IAG chief executive Willie Walsh, says he doesn’t like something, the politicians have to listen whether they like it or not.

And right now, their ears will be ringing, because Wee Willie is beside himself with rage. Not only has he been denied ‘his’ precious third runway at Heathrow – more or less BA’s individual fiefdom and a world brand in its own right. But to add insult to injury, he has also been dragged into – as he sees it – the Government’s hare-brained scheme to build a mega-airport in the Thames Estuary.

Over his dead body. In a move reminiscent of Fool’s Mate in Chess, Walsh seems to have played a blinder on the politicians.

David Cameron, his Transport Secretary and Mayor of London Boris Johnson (who originally espoused the idea) have seemingly done little else over the past few days beyond eulogising the £50bn hub project at “Boris Island” and the transformative effect it will have on the British economy.

Er, no. Walsh crash-landed their airy delusions with a simple, crushing declaration. He’s not moving from Heathrow:

“I don’t think it can be financed. If I throw my weight behind it, people will expect me to be part of the solution financing it and I won’t. The only way you’d make it financially successful is say you’re going to build it and, as part of that, you’re going to close Heathrow. If you leave Heathrow open and you build this new airport, we’re going to stay at Heathrow.”

According to Walsh, these socio-economic engineering projects cause staggering disruption for precious little return, financial or otherwise. The new hub at Montreal didn’t work when they tried it; nor did the one at Kuala Lumpur.

If BA – which holds most of the Heathrow slots, not to mention exclusive rights to state-of-the art Terminal 5 – is not moving to Boris Island, none of its rivals will be either, for fear of losing what slots they have. Or so he reckons. And who is to call his bluff?

Manhattan may once have landed at Heathrow, but Heathrow will definitely not be landing at Thames Estuary Airport. Ah, the power of a global brand flexing its muscles.


Julie Roehm – marketing’s femme fatale

January 17, 2012

So Julie Roehm, femme fatale and arguably the only larger-than-life personality left in marketing, has managed to land herself a proper job again – as VP marketing at global software company SAP.

Unlike Jodie Fisher, the “marketing consultant” who brought down HP CEO Mark Hurd, Roehm really is a high-profile marketer. Glance at her CV (conveniently at hand on LinkedIn) and you will see that the past 5 years positively teems with starry advisory roles. Look a little further down the list, and you will note that she has held down some pretty senior marcoms appointments too, at Ford, Chrysler and Walmart. No trumped up “meeter-and-greeter”, no former reality-TV starlet, no bimbo she.

One thing – apart from the bottle-blonde big hair – that Fisher and Roehm do have in common, though: they are both tireless self-publicists.

To give the flavour, here’s an extract from Roehm’s personal website, written by an uncritical admirer at Hallmark:

You immediately know she is courageous, brave, in command.  When I tell her this, she smiles that trademark Roehm smile, mix of fine intuition, confidence, fierce focus and remarkable intelligence.  “Fearlessness is like a muscle.  The more you exercise it, the more natural it becomes to not let fears run you…that’s a favorite from Arianna Huffington.”

Clients seek her because she’s a warrior with a guru-like ability to feel and predict what makes consumers need, not want.  Believe, never doubt.  Buy, not browse.  Rev up, not idle.

Notoriously unafraid of controversy and a good, clean fight for the right, Julie is an intrepid, yet infinitely calculating innovator.

Strip away the cringeworthy, obsequious tone and you can see why Julie would be highly attractive to an otherwise successful client suffering from lack of image self-esteem; and, equally, why she might be a bit of a nightmare to work with.

The “notoriously unafraid of controversy” bit refers, of course, to the only reason Roehm is known this side of the Atlantic. Her last full-time marketing job was as senior VP-communications at Walmart, from which she was ignominiously fired after 9 months. Walmart’s idea of conduct unbecoming might seem absurdly straitlaced in this part of the world. Nevertheless, Roehm was well aware of the risk she was running when allowing herself to be so extravagantly lionised by the Draft FCB top team flaunting their (oh so temporary) $600m account win; and even more so when she engaged in an “inappropriate” email correspondence with her sidekick Sean Womack.

Roehm simply doesn’t know what reverse gear is. Absence of fear stood her in good stead during her marcoms years in the motor industry, where some saucy ad ideas – like men standing around in urinals talking about the length of their trucks – actually managed to shift metal. But it ended up making her more “famous” than the brand she represented. After the Walmart episode she was unemployable for 5 years, though she made a good fist of going freelance.

Will things work out better at software infrastructure company SAP AG? Leopards and spots come to mind. SAP ought to know what it is doing: Roehm has already worked there as a consultant. Then again, the same could probably have been said of Walmart, with which SAP shares some repressed, correct, organisational values. I also wonder whether La Roehm’s personality is too big for the fishbowl world of B2B – a source of potential frustration for both sides.

Of one thing we can be tolerably certain, though: existing ad agencies need to be on their creative mettle. Watch out Ogilvy, which has held the global $100m SAP account since 1999. A review is sure to be on the way.


Why the IBM brand made a comeback but Kodak never will

January 16, 2012

The imminent arrival of Kodak at the bankruptcy court underlines a curious paradox about technology brands. They come about by, in some way, incarnating a bold invention. They end because they have become too brittle and resistant to precisely the process of innovation that made them great in the first place.

No doubt the Kodak name will survive Chapter 11 in some guise. But it will be as a zombie brand, entirely reliant on its 131-year heritage. It can have no purchase in our future aspirations which, I would argue, is vital to the ongoing success of brands in this sector.

How did such a catastrophic failure come about after generations of success? The simple answer is that Kodak was a legacy company too heavily invested in analogue print technology to be able to embrace digital photography when it arrived, clearly suggesting a monumental lack of corporate vision. However, the simple answer ignores an inconvenient fact: in 1975 Kodak was the first major brand to launch a range of affordable digital cameras.

It’s not so much that Kodak failed to respond to the digital challenge as that it failed to provide a full and satisfactory answer. Actually, it tried very hard with a number of solutions, which included chemicals and medical-testing equipment. Finally, it settled upon consumer and commercial printers but, unfortunately, long after Xerox and Hewlett-Packard had sewn up that market. Unlike one-trick pony Polaroid, which faced the same digital challenge, Kodak had plenty going for it. It just wasn’t enough.

Things might have been very different if Kodak had possessed the ruthless entrepreneurial culture to exploit its first-mover advantage in digital cameras. The sort of culture that drove its founder, George Eastman, back in the 19th century. But it did not. Not only had it to confront a cash-cow legacy (who ever found it easy to jettison money-making assets?), it also had institutional shareholders to placate. Publicly quoted joint-stock companies aren’t about strategic risk; they’re about steady shareholder returns. Why worry about the day after the day after tomorrow, when tomorrow looks just fine?

Ah, you say: but what about Steve Jobs? Apple was and is a joint-stock company, isn’t it? And it had the wisdom to take Jobs back on board.

Yes it did. But don’t forget that Jobs was entrepreneurial-drive incarnate – he wasn’t some whizz-kid corporate manager – and that by the time Apple took him back it was in such a mess that he was able to dictate his own terms. The right-angled strategic turn into streamed entertainment, the iPod and all that followed from it was a huge corporate risk. Even Jobs may have been a little surprised by its eventual success.

More analogous to the case of Kodak, though in a lesser state of decay, are RIM, maker of Blackberry (which has seen its shares drop 75% in value during the last year), Nokia and Yahoo.

What these companies share is a great past, present profitability but no visible purchase on the future. On present trajectory, they will end up like Palm, the PDA specialist: they will be bought, eviscerated then discarded on the junk-pile of corporate history.

An inevitable fate? Not necessarily. Rare though they are, not all turnarounds in the technology sector depend upon a messianic figure like Jobs – although they do demand pretty extraordinary corporate skills.

A good case in point is IBM. Like Kodak, IBM – whose roots go back to 1911 – found itself struggling with a destabilising transformative technology. It had grown great on the mainframe computer, which by the 1980s was obsolescent. Again like Kodak, it was not ignorant of the nature of, or need for, change. At one point it became the world’s largest manufacturer of the new game in tech city – the personal computer. What, unlike Microsoft, it failed to grasp was that the new technology was all about software control. Microsoft cleaned up the market with its PC operating system; IBM fell a prey to PC cloning, which cut its margins to ribbons.

It took an outsider to fix IBM’s cultural obsession with hardware. And not one from within the industry either. Lou Gerstner, who was appointed chief executive of IBM in 1993, hailed from tobacco and food conglomerate RJR Nabisco. Previously he had held a senior position at American Express.

The key to Gerstner’s remarkable 4-year turnaround of IBM was his realisation that the company had to harness its elite skills to not the current, but the next trend in digital evolution. Forget the PC, concentrate on the internet and make IBM the businessman’s natural friend with software solutions that embraced such issues as intranets and electronic commerce sites. While IBM prospered, Digital Equipment Corporation, its great mainframe challenger in the sixties and seventies, failed to embrace change and went under. Or rather, it was acquired by Compaq, which was acquired by Hewlett-Packard – itself now painfully struggling with its future corporate identity. Who now remembers the Digital brand name?


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