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Big is beastly, especially if we’re talking big banks like Barclays

August 28, 2012

Which brands make us most angry? Yes, you guessed correctly. The big ones that rip us off, starve us of mortgage funds, pilfer our savings and behave with amoral disregard for everyone’s interest but their own. Anything, in short, that ends with the word “Bank”.

But come, let’s be a bit more specific. How about some brand differentiation – which is the worst, and which the runner-up? Well, coming in at number 2 – just behind the winning “All banks” category – is Barclays. And next, in 7th position, is Royal Bank of Scotland.

I know all of this thanks to some research, just out, conducted by YouGov and commissioned by creative agency Johnny Fearless (of which more below).

Why don’t Lloyds, Santander and HSBC make it into the top 10? Surely not on account of the odour of sanctity. We can only speculate, but could it be that Barclays and RBS have the two biggest Swinging Dicks attached to their brand heritage, namely Bob Diamond and Fred the Shred? I doubt that most people know who Antonio Horta-Osario is, and would struggle to recall his name in sufficient detail if they did. Which is probably just as well for Horta-Osario and Lloyds Bank.

More interesting, if perplexing in some ways, is the identity of the other 7 members of this exclusive Top 10 club. Tenth equal with Coca-Cola is Nestlé – still regarded as a corporate pariah on account of its anti-social baby-milk marketing practices in developing countries. I’m sure that doesn’t depress sales of Kit-Kats and Yorkie bars one bit, though.

And what’s Coke doing in there? Sorry boys and girls, for all your tender investment in clean athleticism, those grubby practices in Third World countries have not gone unnoticed.

Next up, “All utilities companies” at number 8, on account of their high prices and perceived profiteering. But two deserving special mentions here are British Gas – with its conspicuously bad customer service; and BT – with its ineffectual overseas call centres.

Virgin Media is in there at number 8 as well, although I have yet to discover whether this is because we’re all being beastly to Beardie or on account of some graver underlying cause – such as woefully inadequate service.

That leaves us with McDonald’s at number 4 – poor quality food and an inappropriate Olympics sponsorship, apparently.

…And, weighing in at number 3, the nation’s unfavourite retailer – Tesco. Memo to Tesco CEO Phil Clarke: it’s because you’re too big for your boots, despoil our high streets and blackmail your suppliers. No other retailer can do this so successfully, it seems.

  1. Which companies or brands make you feel angry? 
  2. What is it they do to make you feel angry?
Rank Company or brand
1 All banks’, ‘Banks’
2 Barclays
3 Tesco
4 McDonald’s
5 BT
6 British Gas
7 Royal Bank of Scotland’, ‘RBS’
8= Virgin Media
8= Utilities’, ‘Energy companies’
10= Nestlé
10= Coca-Cola

The research was commissioned by Johnny Fearless and carried out by YouGov. Total sample size was 2077 adults. Fieldwork was undertaken between August 3-6th 2012. The figures have been weighted and are representative of all UK adults (aged 18+).

Johnny Fearless is a Soho start-up agency founded by Paul Domenet and Neil Hughston, whose stock in trade is creating “social crackle” around brand messages. Or so it says in their publicity blurb.

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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.


BSkyB – nearly the company with the UK’s biggest marketing budget

January 4, 2011

Will BSkyB soon become the UK’s biggest marketing company? It’s a sobering thought  – especially for those who, like culture secretary Jeremy Hunt, must now consider whether Rupert Murdoch and his son James are fit and proper guardians of the 61% of the broadcast media company they do not already own. What will they do with unfettered control of all that money – not so much when it is directed at ITV and the BBC (the case already), but at BSkyB’s non-broadcast rivals?

In fact, BSkyB is still some way from being the company with the biggest marketing budget. The latest Nielsen figures, which leaked out just before Christmas in The Telegraph, reveal that BSkyB has now moved into number two position behind Procter & Gamble in the advertisers’ league table: not quite the same thing, but the most reliable indicator we have in these matters. The main casualty – inevitably given what has happened to it – is the Central Office of Information. For some years the COI sat on, or very near, the top of the pile. Its fall from grace has been melodramatic: despatched from top to fifth place, with spending slashed 47% to settle – for now at – £112m. There’s no likelihood of it getting back.

BSkyB, on the other hand, increased its spend 20% to reach £161m. But even that wasn’t nearly enough for it to become top dog in the near future. P&G put on another third – giving it an unassailable lead at £189m. Unless of course BT, currently 7th with a spend of £104m, continues its phenomenal 44% multiplication of spend for the next three years (unlikely, I suggest).

These Nielsen figures are interesting indicators, but they need to be viewed with considerable caution. Although they purport to record expenditure to the end of the calendar year, there are a number of caveats; for example, there is no internet spend included for the last quarter (a significant omission). They are, moreover, merely a ratecard indicator: they do not tell us what was actually spent after discount. Finally, they do not record all forms of marketing activity. And some of these excluded sectors, like POP, are absolutely massive.

For all these imperfections, however, the Nielsen figures reveal a remarkable truth. BSkyB has become one of the UK’s most powerful companies, and it has done so in large measure through the intelligent application of marketing.


Simon Fuller revolutionises the TV pilot

December 19, 2009

I was intrigued to read (in the Financial Times) that Simon Fuller, founder of 19 Entertainment, intends to pilot his new show not on television but on the internet.

Fuller, who devised American Idol, US television’s most successful format in years, has developed a new venture called If I Can Dream. I quote: It “will follow the efforts of five young people trying to break into the entertainment industry. Their every move will be streamed online, with the audience able to interact with them via video messages and social networking sites such as Twitter and MySpace.”

Clearly this represents a step-change beyond the reality entertainment of Big Brother, with digital interactivity moving centre-stage instead of acting as a useful ancillary. But the real beauty of his digital strategy is that it will massively reduce the cost of producing a pilot on US network TV.

How so? Well, Fuller intends to use Hulu, an online video entertainment platform jointly owned by Fox, ABC and NBC, which will enable him to build a web audience, slowly but steadily, for several months before launching on TV. Hulu had about 42 million viewers in October.

Could something similar happen in the UK (home of American Idol’s prototype, Pop Idol)? After all  the tears and gnashing of teeth in the IPTV sector over the regulator’s refusal to endorse the Kangaroo project, the odds might seem low. Not so, necessarily. I read in the same edition of the FT that Project Canvas, a joint venture between the BBC, ITV, Five and BT aimed at standardising online video technology, has taken on a new spurt of life. It has now added Channel 4 and TalkTalk to its ranks. That leaves only BSkyB (sister company of Fox) as a significant outsider.

There’s hope yet for a triumph of common sense.


Ofcom ‘double standards’ in BT pension investigation

December 4, 2009

If I were Jeremy Darroch, chief executive of BSkyB, I would be incandescent at Ofcom giving BT a sympathetic hearing over its proposal to cane consumers with extra broadband charges so it can stuff its depleted pension fund.

Here’s why.  Ofcom appears to be operating a set of dual standards when it comes to regulatory investigation. On the one hand, it is perfectly prepared to consider lowering the wholesale prices that BSkyB charges its rivals for pay-TV programme rights. Principal beneficiaries? Virgin Media, Top Up TV and, er, BT Vision.

On the other hand, it is equally prepared to consider raising wholesale prices when such an action would benefit BT. As for example, with the line rental charged by BT wholesale subsidiary Openreach to third party broadband customers, such as TalkTalk  – and BSkyB. Ofcom says it wants to benefit the end-user of pay-TV by lowering prices; yet contradictorily it implies end-users generally may have to carry the passed-on burden of raised broadband tariff prices should BT’s pension stuffing be deemed ‘in the public interest’.

There’s more. The ostensible reason for an investigation into the pay-TV market is that BSkyB operates a complex monopoly, which may need to be moderated by introducing an independent pricing structure monitored by Ofcom. Wait a minute, though. Doesn’t BT also operate a complex monopoly – in the supply of broadband (copper-wire-based) infrastructure? And isn’t Ofcom opening itself to the charge of propping up that monopoly if it let’s BT’s proposal through?

The crux of the BT rationale is that it provides a vital public service, at a loss. In other words, it has had to run a pension deficit as a result of conditions (the regulatory framework; the rising longevity of its employees etc) beyond its reasonable control.

Yet it is far from evident that these are the only, or even the major, preconditions which have led to BT’s pension deficit. After all, isn’t this the same BT that for some years declined to pay money into its pension fund, to the more or less exclusive benefit of shareholders? And which wilfully embarked on a high-risk global expansion strategy that eventually boomeranged on all its stakeholders disastrously?

Ofcom, which has no doubt employed entirely objective criteria in investigating these separate yet related issues, nonetheless risks accusations of conflict of interest if it finds in favour of BT. All the more so because it has now become a football in the increasingly acrimonious war between HMG and Rupert Murdoch. If the NewsCorp-backed Tories get in next year, Ofcom will most likely find itself history.


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