Aren’t some Outdoor Plus shareholders compromised by a conflict of interest?

February 22, 2013

Marc MendozaThere’s a lot going on under the radar in OOH – or posters, as we anciently called it. And I’m not simply talking of Omnicom’s Eric Newnham-fronted effort to crash the charmed circle of UK specialist buyers – namely WPP-owned Kinetic and Aegis-owned Posterscope.

No, what caught my eye recently was something entirely different. It concerned premium digital site owner Outdoor Plus and its opening of yet another of the landmark London locations in which it specialises – in  this case The Spire, a 20 metre-high construct unmissably situated on the A40 exit from London.

The PR spiel, as conveyed in MediaWeek, was suitably gushing: access to a dedicated commuter and business audience; balanced male:female ratio; 60% ABC1; capable of targeting traffic both in and out of central London. What more could an advertiser ask for?

Very little, according to an excited Grant Branfoot, Outdoor Plus’s sales director: “The potential for advertisers is vast and through the addition of The Spire to our expanding digital portfolio (it includes The Eye in Holborn, the Euston Road Underpass and Vauxhall Cross), we think we can help advertisers exploit the immediacy, the creative possibilities and the opportunity for highly targeted messaging which is associated with large format outdoor digital screens.”

The potential for advertisers is vast, is it Grant? More correctly, the potential for some, carefully selected, advertisers is vast. Many will likely get scarcely a sniff of a placement. The reason is somewhat complicated, and to do with Outdoor Plus’s curious shareholding structure. But don’t go away, readers. It’s worth the wait, really.

Outdoor Plus is a reasonably sized, reasonably well-run private company founded in 2006 by Jonathan Lewis – who remains its managing director. Turnover was about £15.42m in the year to December 31, 2011 – the latest financial figures recorded in Companies House. Group operating profits – of which Outdoor’s comprised the vast majority – were £1.8m, allowing the six directors to award themselves collective “emoluments” (or fees) of about £770,000.

The roll-call of these directors makes interesting reading. Among them are Philip Andrew Georgiadis, daytime job: chairman of Walker Media; and Marc Sydney Benjamin Mendoza, better known as head of Havas Media UK. In other words, principals of notable media-buying organisations whose job it is, inter alia, to oversee without fear or favour the negotiation of the most advantageous placements for their clients on UK OOH sites.

Turn to the share structure of the company and things get even more interesting. It emerges that Georgiadis is also a 5.3% shareholder in Outdoor Plus. Mendoza (pictured) owns just a shade more. And then there’s Mendoza’s cousin and, technically, his boss, Havas Media UK group head Mark Craze, who owns 3.2%. But we’re not quite over yet, because Stephanie Gottlieb, wife of Colin Gottlieb – the EMEA chief executive of Omnicom-owned OMG – also owns 1%.

Now I’m not suggesting anything illegal is going on here. At one level, you have to tip your hat to Lewis, who has been extremely shrewd in persuading these media luminaries to come aboard, thereby – shall we say – reinforcing his revenue stream.

Indeed, even if the shareholding of the Havas, Walker and OMG representatives were to be combined, they could hardly be accused of concert-party style manipulation.

None of that, however, quite expunges the whiff of conflicting interest surrounding this cosy media buy-side/sell-side coalition. Clients whose accounts are not held by Havas, Walker or OMG may well be the losers. And those whose accounts are need to be assured that they are getting the very best deal for all the right reasons.

Senior media executives, like Caesar’s wife, should be above suspicion.

Supermarkets should remember the consequences of the Perrier scandal

February 18, 2013

Malcolm WalkerDuring the early part of 1990, health officials in North Carolina, USA, made an alarming discovery. Some Perrier bottled mineral water, whose purity was so legendary they had used it to benchmark other water supplies, was found to be contaminated with minute traces of benzene.

Benzene is a natural component of crude oil. Ingested in sufficient quantities, it can cause cancer in humans. Of course, there was no question of that happening in North Carolina. As a Federal Food and Drug Administration official drily observed at the time: “At these levels there is no immediate hazard. Over many years, if you consumed about 16 fluid ounces a day, your lifetime risk of cancer might increase by one in a million, which we consider a negligible risk.”

But no one was listening to the FDA’s voice of reason. Panic broke out all over the USA – and not just there. Perrier, at that time world leader in the mineral water category, was obliged to withdraw its entire global inventory of 160 million bottles. Brand integrity was further compromised by the discovery that the “natural” bubbles in the bottled potion were actually added back later. Perrier never fully recovered: it lost its leadership and became just another branded mineral water, albeit still a famous French one. Commercially, the crisis was if anything even more disastrous. The independent Perrier bottled water company was, within two years, sold to Nestlé.

I think you know where I’m leading with this. Fast-forward 23 years, to a full-page ad that appeared in yesterday’s national newspapers. It was inserted by Malcolm Walker, founder and chief executive of  leading UK food retailer Iceland. Its purpose was to divert responsibility for the horse meat scandal now engulfing our supermarkets by pointing the finger of blame at cheapskate procurement in local government, the National Health Service – and its equally unscrupulous counterpart in the catering industry – which has connived at bringing down processed food costs to their lowest possible denominator. Doubtless, judging from the ensuing squawks of indignation, the Iceland boss has a point – though how exactly his tirade exonerates the supermarkets from their own ruthless manipulation of supplier lines is not entirely clear. However, Walker does not stop there. Having scored some points on behalf of his sector, he then goes on to trash it by adopting a “holier than thou” approach:

“Iceland does not sell cheap food. We sell high-quality own label frozen food that is good value. We do not sell – and never sold – ‘white pack’ economy products.” Unlike, he carefully does not add, Tesco and Asda. And, just to ram the point home, he goes on to claim that “no horse meat has ever been found in an Iceland product”.

Well, almost none. At the bottom of the ad there is a mealy-mouthed admission that 0.1% of equine DNA was indeed found in two Iceland Quarter Pound burgers. But these don’t count, because the test, carried out by the Food Safety Authority of Ireland, was not an “accredited” one, and the discovered traces of horse were “well below the current accepted threshold level” of 1%. So, yaboo sucks to any critics.

Nice one, Malcolm. You’ve managed to spread, or at least smear, the blame far and wide, and thrown into the processor just a hint of xenophobia. Ireland, Romania, France – these horse-eating monkeys, they’re not like us – not to be trusted, whatever their professions of rigorously adhering to EU-wide standards. But, leaving aside the lowly populism of his message, Walker, in waxing eloquent about the infinitesimal amount of contamination in his own burgers, has committed a revealing tactical blunder.

Perrier logoThe current food scandal is not about parts per billion contaminants found in horse meat; it’s about trust in the brand. Just like the benzene found in Perrier all those years ago, consumers would have to ingest an awful lot of horse burger infected with “bute” equine painkiller (over 500 250 gram ones, to be precise) before experiencing any appreciable side effect. But that won’t prevent them passing summary judgement on those august brands – at the head of the supply chain – that have allowed this scandal to happen: namely the UK grocery multiples.

Possibly with devastating consequences for future sales.

One interesting aspect of this scandal is that its ramifications have now moved on from cheap lines of processed meat – in short, “poor people” – to ready-made meals. In the other words, the sort of thing consumed by affluent and articulate members of the middle-class. That’s bad news even for elite purveyors, such as Waitrose and M&S.

In all probability there’s nothing to worry about. But that’s not the point, is it? My local butcher tells me business has gone gang-busters over the past couple of weeks. And for good reason. In the past, there was a perception (false, as it happens, in many cases) that local businesses could not match supermarket fresh meat prices. Now, understandably, people seem a lot more concerned about local provenance. If you must have lasagne, it’s as well to see the meat being minced while you wait, rather than trusting the word of some supermarket about the integrity of its supply line.

Richard III gets a brand makeover

February 5, 2013

Richard IIIRichard III, the marketing angle? Incredible as it may seem, there is one – and Mediapost claims to have detected it.

The spectacular discovery of the last Plantagenet monarch’s remains under a Leicestershire car-park has been derided in some academic quarters as a stunt that offers little new insight into the historical record (unlike, for example, the discovery of Troy).

Not so. Instead of a cripple “Cheated of feature by dissembling nature, Deformed, unfinish’d, sent before my time, Into this breathing world, scarce half made up, And that so lamely and unfashionable, That dogs bark at me as I halt by them” we have been presented with incontrovertible evidence of a fit, 32-year old man, at 5ft 8in tall for his era but for a curvature of spine that set his right shoulder above his left, and possessed – according to the reconstruction of his skull – of a personable, sensitive appearance ill at odds with the psychopathic villain of Shakespeare’s imagination.

How much, then, was the Tudor “brand makeover” of Richard a carefully fabricated lie designed to cement the succeeding dynasty’s undoubtedly shaky claim to the crown of England?

The fact is, back in the 1480s anyone who was anyone – well, nearly anyone – was a bastard. The Princes in the Tower were bastards (or so Richard persuaded Parliament on acceding to the throne in 1483); Henry, Duke of Richmond – the victor of Bosworth Field – was most certainly a bastard, tracing his ancestry to King Edward III via the bar sinister on both sides of the family; and so – according to some – was Richard’s elder brother Edward IV: the son of an English archer rather than the 2nd Duke of York – though, understandably enough, no one was prepared to openly address the matter during the charismatic, 6ft 4in warrior’s lifetime.

In a country riven by a generation of civil war, legitimacy was a necessary though not sufficient qualification for long-term kingship. And Richard, unlike most other contenders to the throne during that period, had an unimpeachable claim to it. However, the paramount requirement in that anarchic and bloody era was ruthless leadership, on and off the battlefield. Edward IV had it, but his predecessor – mad, incompetent but very legitimate Henry VI – did not. Result: civil implosion and the Wars of the Roses. That was the thing about the Medieval state. Weak leadership was not simply a failing in a king, but a mortal sin: because sooner or later it plunged the country into internecine strife (note the reigns of Stephen, John, Henry III, Edward II and Richard II).

Henry VI eventually paid for his incompetence with his life – he was starved to death in 1471, probably on the orders of an exasperated Edward IV. Twelve years later, a similar succession crisis seemed to be shaping up when Edward himself died prematurely, at 40. The plan was that Edward’s son – known to history as Edward V – would succeed him. But Edward was only 12 and the substitute sibling, his brother Richard Duke of York, considerably younger. Either way, they would be puppets in the hands of the Nevilles, Stanleys, Woodvilles, de la Poles and Percys – the aristocratic “cousins” who were the powers behind the throne at that time. Another round of civil war loomed. Forseeing this, Edward had made Richard, then Duke of Gloucester, their protector. Richard had proved himself very competent, on and off the battlefield. A surprisingly enlightened administrator who in effect already ruled in the north of the country, he had also proved his martial valour at the decisive battles of Barnet and Tewkesbury (1471) which had ensured a Yorkist was put back on the throne. Later, Richard played a leading role in pacifying Scotland. Edward had every reason to be grateful. Most of all, he trusted Richard implicitly. What could possibly go wrong?

In placing the two princes in the protective “custody” of the Tower of London (then simply another royal palace) and subsequently disbarring them from the succession, Richard may have acted out of cruel necessity, or naked ambition. Conceivably both. Did he really believe the princes were illegitimate? We don’t know. Did he have suspicions that his own brother was illegitimate? We don’t know. Was his own dynasty likely to be strengthened by, in some way, disposing of potential rivals who might provide a rallying point for disputing his own position? Yes, it was. At that time, he had a son, also Edward (in those days they were all Edward, Richard or Henry, it seems), who died the subsequent Henry VIIyear, 1484. Did the Princes die in 1483 (thus effectively excluding the Duke of Richmond, later Henry VII (left), as their murderer – he was in France at the time, and in no position to gain access to the Tower)? Almost certainly – nothing more is heard of them after the summer of that year. What’s more Richard, though he denied killing them, failed to provide the living evidence that would have discredited any such claims. Did he, or his agent the Duke of Buckingham/ Sir James Tyrrell, do the heinous deed? Beyond reasonable doubt, no. On the balance of probability, yes. Did Richard have any defensible argument for doing what he probably did? Raison d’état, maybe. Pretenders purporting to be the young Duke of York were to cause Henry VII endless trouble during the earlier part of his reign.

Richard has been set up in history as the Arch-Infanticide. In reality, what use is it judging him by the standards of our own time? His code of conduct was not identifiably worse than that of his predecessor – himself a regicide – or his successor, a consummate Machiavellian who discreetly saw off many an opponent at the gallows. That’s what monarchs did then – if they wanted to survive. Richard’s misfortune was to be betrayed on the field of battle – by an ally connected through marriage to the other side. Even his enemies conceded he fought courageously to the end.

If the Battle of Bosworth had gone the other way – and it very nearly did – we can be tolerably sure we would not now be obsessing about the fate of the Princes in the Tower. To the victor the spoils.

Ryanair’s two-fingered salute to social media

February 2, 2013

Michael O'LearyI was amused to read that the incoming head of comms at Ryanair (forgive the oxymoron) has “deliberately” ruled out a social media strategy.

New boy Robin Kiely tells us – apparently without irony –  that such an initiative “would not be helpful” to Ryanair as “we would have so many people looking for a response.” A dedicated Facebook account, for instance, would probably mean “hiring two more people to sit on Facebook all day.”

Just two, Robin? Surely a legion would not be enough to handle the sycophantic email that would inundate your site.

As an after-thought, Kiely mentions that customers of Ryanair are, in any case, handsomely provided for by the budget airline’s “customer care line”. Has anyone ever managed to find a living being on the other end of this, without being connected to the ether for half an hour beforehand? Just checking.

Social media is, as you can imagine, heavily populated with accounts trading on the Ryanair brand, few of them complimentary. A quick trawl revealed an official PR Twitter account which has been dormant since August. By contrast, one altogether busier account, on Facebook, is that of the RyanairPilotGroup. It’s replete with commentary on Ryanair’s alleged infractions of European working regulations; tax evasion; and imminent strike action.

A bit worrying really, if these people really are Ryanair pilots…

You know what they say, Robin: journalists, like Nature, abhor a vacuum. If you’re not there, you’re not a player.

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