The PR Explosion

I always find Veronis Suhler Stevenson’s (VSS) Communications Industry Forecast interesting reading, but the latest edition revealed an important shift in client spending that bodes well for the public relations industry. Here are some highlights:

• Client spending will rise by 55% to $8 billion in 2013 — $3 billion of which will be spent on word-of-mouth marketing, which includes social media outreach, as well as offline brand ambassador programs.

• Expenditures on PR and word-of-mouth increased by 7% — to $5.2 billion — in 2008 versus the prior year.

• In 2008, advertising represented the smallest share — at 24% — of the four major communication segments, the first time that has happened since the study began in 1986.

• From 2008 to 2013, VSS forecasts that traditional advertising will decline by another 3%, following a 11% decline over the past 2 years.

“Advertising is very expensive, and in tough times, companies demand greater ROI. Traditional advertising is not as measurable as the Internet or other forms of marketing communications,” said Jim Rutherfurd, EVP and managing director of VSS in a recent interview in PRWeek. “It is also part of a trend that started long ago that has seen companies move from mass media to more targeted communications.”


Technorati Tags: VSS Communications, client spending, public relations

The Tiger Lays an Egg

Vulnerable? Yes. Disciplined? Yes. Cold? Also, yes.

While Tiger Woods’ public apology — “I had affairs. I was unfaithful. I cheated.” — was possibly truthful and certainly forthcoming, it was delivered as if he were a robot communicating zero on the feelings scale. Nowhere did I hear expressions of deep remorse or how much he loved his wife and family; rather, he sounded as if he were duty-bound to make this confession … as if this calculated step were a prerequisite for the next calculated step in his plan for redemption.

When I saw a TV interview with his Buddhist priest, it all came together. Tiger had veered too far from Buddhism in recent years, he advised, and the priest confirmed. The priest stated that the first step needed to be a strong, truthful confession of all the misdeeds, and only then could progress be made.

Despite some anecdotal criticism of his apology directed at “his PR handlers,” to me the talk sounded like something written and directed by a Buddhist advisor, perhaps even the priest. The austere surroundings. The decision not to answer questions — which would be in keeping with the confessional first step. The priestly, “I’m meeting my commitment,” tone.

I recognize that The New York Times and many others have praised what he did and held Tiger up as a role model against others who did not make a high-profile public apology (such as Mark Sanford, Governor of South Carolina, and John Edwards, presidential aspirant). I disagree. There are also those who claim that since he is not an elected official, he had no responsibility to publically apologize. I disagree. Anyone who becomes a star and accepts endorsement money has an obligation to the public.

We live in a world of engagement. Tiger did not engage his audience.

Whether you like the word transparency or not, who knows how Tiger really feels? He refused to answer questions, and that is anything but transparent. This situation, which could have been put to bed with a quality performance, will haunt Tiger for some time. He may not be answering questions now, but he will have to face the music whenever he returns to golf.

Technorati Tags: Tiger Woods,
unfaithful, apologize,Mark Sanford, John Edwards

Measure Twice, Cut Once?

Today’s guest author is Frank Ovaitt, Executive Vice President of Makovsky + Company and Head of Research and CEO Emeritus of the Institute for Public Relations

“Measure twice, cut once” may be good enough for carpentry, but not for public relations.

Actually, it’s not good enough for carpentry either. Any competent carpenter has theoretical knowledge of materials, structural strength, the requirements of various applications and practical knowledge of standard practices and tools. Listening and learning from the customer is also critical, of course.

So it is in public relations. Many practitioners focus too much on measurement at the expense of other domains of research. In fact, there are four kinds of research-based knowledge that every professional needs:

1. Foundational research. For a practical example, consider Toyota’s response to its multi-faceted safety crisis. There is solid theoretical research that would have told them that explanation and confrontation would not work in this case (sometimes they do). With so much blame attributable to the organization, Toyota should have gone much quicker to accommodation strategies (apology, assurance and compensation).

2. Best practices and benchmarking studies. These help us understand important trends in public relations so we can consider whether they apply in a given situation. In crisis communications, this might mean research on what kind of scenario planning experienced practitioners use to be ready for whatever comes.

3. Initial or formative research. When you begin campaign planning, this work should precede all other work. Start with desired business outcomes. What additional knowledge (of audience attitudes, for instance) do you need to define PR objectives, strategies, tactics and messages? Returning to our crisis example, research can even identify “what could go wrong here” before possibility turns to disaster. The risks are different for a drug company versus a retail company or a tech company, but they are still knowable.

4. Measurement and evaluation. Even in a crisis, you can use online and offline metrics to understand what’s been achieved and how to achieve more. Do stories that quote your spokesperson have a more positive tone? Which messages are resonating, and which are falling flat? You have to keep tracking to keep improving.

Public relations practitioners shouldn’t sell themselves short — as if the research needs in this field are as simplistic as the carpenter’s “measure twice.” It’s the rich mix of four domains that really marks true professional work.

Technorati Tags: Frank Ovaitt,
foundational research, crisis,online metrics, offline metrics

Let's Retire these Words!

I recently read a funny and thought-provoking article in TIME magazine about the 15 words and phrases that should be banned from the English language in 2010 for “Mis-use, Over-use and General Uselessness.” The list, compiled by Lake Superior State University (LSSU), includes:

1. Shovel-ready
2. Transparent/Transparency
3. Czar
4. Tweet
5. App
6. Sexting
7. Friend (as a verb)
8. Teachable Moment
9. In These Economic Times ...
10. Stimulus
11. Toxic Assets
12. Too Big to Fail
13. Bromance
14. Chillaxin'
15. Obama (as a prefix)

“’In these economic times,’ purging our language of ‘toxic assets’ is a ’stimulus’ effort that’s ‘too big to fail,’” said a LSSU spokesperson.

I’m afraid that I’m an offender. (I’ve caught myself, more than once, using “transparency,” “app,” “tweet,” “in these economic times” and “too big to fail.”) But where, I ask you, are the following words and phrases that should also be banned: “public option,” “unprecedented,” “OMG” and “at the end of the day”?!

Surprisingly, there is such a superabundance of useless words in the workplace that I blogged about this topic back in October. Yet every year brings an entirely brand new crop of annoying, over-used words!

Toyota Exhausted

The so-called “quality” car — that has stood out for decades since the foreign car invasion of the U.S. many moons ago — has finally “collapsed,” so to speak … or at least its reputation has. Its business may follow, if the blunders continue and Toyota fails to publish a “repair plan” that customers can believe in.

First the company said it was the floor mats that caused the stuck-accelerator problems, then electrical issues in the accelerator itself and lately it is braking problems in the Prius. There has also been a parade of communications mistakes, while people are dying due to these problems.

The headline in Sunday’s New York Times is “Toyota Has Pattern of Slow Response on Safety Issues.” Authors James Kanter, Micheline Maynard and Hiroko Tabuchi cite design changes to correct safety issues that the company has been making — without telling customers about the underlying problems with cars already on the road. Yet according to the NYT, the CEO has balked at questions regarding whether the company has ever withheld safety information.

Further, while the CEO has issued a couple of apologies, he has been delegating the task of reassuring American consumers on various key TV shows and plans to do the same at Congressional hearings next week. The executive selected to be the “face” of the company has none of the operational responsibilities required to speak to these issues.

So what do we have here? Slow response, when immediacy is a fundamental in crisis communications. Lack of clarity and transparency, when being above board with customers is the only way to save your skin, if you can save it at all. Lack of accountability, when accountability means the CEO is front and center.

All the fundamentals of crisis communications are being violated, not unlike the missteps of Enron, Worldcom, Arthur Andersen and even Tiger Woods. As the great American philosopher, George Santayana, has said, “Those who cannot remember the past are condemned to repeat it.” Is Toyota suffering from a case of “historical amnesia” so profound that the company’s communications efforts have collapsed in exhaustion?

Technorati Tags: Prius, Toyota,
safety issues, breaking problems,Hiroko Tabuchi, James Kanter, Micheline Maynard

INDIA REVEALED: 10 SURPRISING FACTS

On Monday, just back from India, I posted my impressions of Mumbai (formerly Bombay) in my blog . I tried to
capture the kaleidoscopic quality of a city that combines the old and the new, extreme poverty and astonishing economic growth. Despite the city’s (and indeed India’s) pressing problems, India is definitely beginning to take its rightful place on the world stage.

Today, I’d like to drill down a little deeper and share with you 10 interesting facts about the country that Goldman Sachs has predicted “could be 40 times bigger by 2050.”

1. At 1.27 million square miles, India about a third of the size of the US.

2. India is the #2 most populous country in the world (with nearly 1.16 billion people), just behind China. In fact, India has almost four times the population of the United States.

3. Like the US, India is a federal republic: power rests with the voters who chose their governmental representatives. Everyone age 18 and older has the right to vote.

4. The two most prominent religions in India are Hinduism (80.5%) and Islam (13.4%), according to the 2001 census. However, Jainism and Buddhism have been practiced in India for nearly 2,500 years. What’s more, Jews and Christians have lived continuously in India since 200 BC and 52 AD, respectively.

5. There are 15 official languages in India. Hindi is most widely spoken language and the primary tongue of 41% of the population, but English is the most important language for national, political and commercial communication.

6. Slightly more than half of India’s work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with less than one-third of its labor force.

7. India’s top industries are: textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software and pharmaceuticals.

8. With more than 427 million mobile telephones in use, India currently outranks the U.S. in terms of cell phone subscribers. (China is #1.)

9. There are 81 million internet users in India … more than in Canada and the U.K. combined.

10. At $3.55 trillion in 2009, India’s GDP (purchasing power parity) is ranked #5, after the EU, US, China and Japan.

SOURCES: CIA - The World Factbook and the National Portal of India’s Interesting Facts about India.

Technorati Tags: india, Goldman Sachs,
Mumbai, communications, public relations, Makovsky

It's Happening in Mumbai

I have just returned from a week of business meetings in Mumbai (formerly Bombay), India, with a range of leading companies in multiple industries. Taking all the meetings as a whole, I saw a dynamic business community rearing its head, both nationally and internationally. There were those companies that saw enormous expansion within the Mumbai area only and, with a population nearing 20 million there, that opportunity is apparent. But there were also several $500,000+ firms that see market opportunities in the U.S. and Europe. Our schedule was set up by our IPREX partner firm in Mumbai: Concept, a leading public relations and investor relations firm and 2007 “Agency of the Year” in India, which has offices in key cities.

Mumbai is clearly a communications-conscious business community. Firms we spoke with saw the importance of communications in terms of building company value and launching new products. They were as concerned about the implications of social media and how best to channel its uses as we are. They realize that proper use of communications can enhance their growth, and they see enormous merit in moving in the right direction.

Physically, these corporations were generally set back behind gates in courtyard settings, as opposed to street-front structures. This certainly speaks to security concerns. Understandably, security was strong at both our hotel and other public buildings. At many, security personnel checked cars before entering by lifting the hoods and searching the trunks. Next, individuals walked through a security gate and then were scanned with an electronic wand.

Mumbai is still a contrast in styles. There were quite a few more skyscrapers since we were there in 2005, but by and large it remains a developing city. You still see an occasional cow walking in the street, and there are still 8-9 million people living in slums.

Nevertheless, there is a momentum in Mumbai that is reminiscent of New York. You can feel the electricity the minute you enter the city. The traffic is among the most crowded in the world because there is no underground or aboveground transportation system (although one is now under construction). The city has some stunning architecture, much of it built during its British colonial days. Dotted with more modern structures, the elimination of its slums, and hopefully cleaner buildings from yesteryear, Mumbai has the potential to be a masterpiece, contrasting the old and the new.

Technorati Tags: IPREX, Mumbai, slums, India, Concept Communication