An Opportunity to Lead on Intangibles

Today’s guest blogger is Bruce Berman, a principal in Brody Berman Associates, and is responsible for four books on IP and business, including From Ideas to Assets. His weekly posts can be found at IPCloseUp.


The recent sale by AOL of 800 patents to Microsoft for $1.1 billion, and patent purchases by Facebook and Google and Apple, are graphic reminders that intellectual property rights, otherwise hidden assets, are keys to unlocking value.

Intangible assets like patents that are not reflected on balance sheets today deserve the same oversight as a business’ other financial assets. They rarely get it.

PwC and other sources attribute 80% or more of the market value of S&P 500 companies to intangible assets, primarily intellectual property rights. Despite this, many companies do not discuss their patents publicly because they fear they are too intricate and that no one is listening. That is no longer the case.

CXOs and board of directors should not be intimidated by the learning curve or financial reporting challenge. Explaining their innovation rights should not be seen as a burden but as an opportunity to provide stakeholders transparency and turn hidden value into market capitalization.

Patents are the product of costly R&D. They can permit innovative companies more market share and higher profit margins, licensing revenues and freedom from disputes.

Businesses that fail to explain the role their IP rights play in financial performance are short-changing themselves and possibly shareholders. The clever ones will disclose more before investors and regulators require them to.

Heritage Brands’ Digital Bridge to Millennials

Makovsky EVP Matt Wolfrom and AVP Matt Makovsky wrote an article which appeared in AdAge on 2/29. The following is based on that article.

Facebook’s IPO will be the largest of any tech company in history, and that spotlight has Chief Executives asking their CMOs, “What’s our Facebook strategy?” Why this question?

Last week, at the inaugural Facebook Marketing Conference in NYC, Facebook took another giant leap forward with the launch of a new “brand timeline” – a digital canvas for brands to tell their stories dating back to their earliest days.

The brand timeline will no doubt unlock opportunities and also expose risks for many CMOs, but we envision a new world of possibilities for established heritage brands – and specifically to build connections with millennials.

This generation is the largest, most diverse, educated, affluent, complicated and influential consumer base that CMOs have ever encountered. Even with over 800 million users, Facebook remains a platform that was created by a millennial, for millennials. With the new brand timeline feature, brands will now be able to interact through a “virtual life story” that is inherently authentic to the brand and its history, on a medium that’s now second nature to a generation.

So what steps must CMOs consider before making this new Facebook conversion?

•Is your brand story ready to make the leap? Before making the digital leap, make sure your core brand story is quick to understand, easy to remember, more emotional and invites participation. Control is out. Co-creation is in. To be successful, marketers must be willing to let go of elements of their story, enabling millennials to discover new and lasting partnerships with heritage brands.

•Any skeletons in the closet? Every brand has a past, and given the ease with which millennials can discover past problems, it’s important to be transparent and face up to any past painful history and how the brand has dealt with it. Otherwise the backlash could be severe.

•Tap millennials within your marketing organization. Smart CMOs are complementing their traditional marketing acumen by tapping the adept millennials. For heritage brands, the new timeline not only creates an opportunity to build relationships with the millennial consumer, but also attract new marketing talent and vitality to the brand.

While it is too early to know exactly how the Facebook brand timeline will connect with the market, we believe the principles outlined above will prepare heritage brand CMOs to capitalize on the seismic shift occurring on one of the world’s largest marketing platforms.

INDICTMENT OF MANY

Madison, Wisconsin

One of the world’s leading public relations firms agreed to represent the world’s leading social network, Facebook, to surreptitiously criticize its competitor, Google, by convincing reporters to write negative stories about Google’s service, Social Circle. Ouch!

Specifically, according to various media articles published, Burson-Marsteller offered to ghostwrite pieces and submit them under the name of a graduate student at a cybersecurity research center, without revealing to the press that they were representing Facebook.

Well, shame on Burson and shame on Facebook. What Burson did was a clear violation of the Public Relations Society of America’s Code of Ethics – and its own. It is dishonest for a public relations firm not to publically reveal whom it is representing to the press or anyone else. Further, it is a violation of integrity to submit articles to the media without designating the source of the pieces. Even if a third party’s byline is used, it is critical to disclose the relationship with that third party … whether it’s a paid consultant to Facebook or a passionate, unpaid crusader fighting a perceived problem with Google’s privacy policy.

I know several members of the leadership of Burson-Marsteller and know they have high standards of ethical conduct; the organization is so large, however, I have to believe this happened somewhere within the firm where the leadership was unaware of the firm’s decision to take on this activity. While Burson publicly (i.e., in the media) admitted that what they did was a mistake (I have yet to see anything from Facebook), how could they not know that taking on this assignment — under the circumstances required) — was a mistake from the get-go?

As one of the two or three largest firms in the public relations industry, Burson’s behavior will inevitably be perceived by some as an indictment of our entire industry as manipulative, sneaky and dishonest – when in reality our business serves a critical communications function, conveying important information clearly, honestly and with transparency. We missed out this time on showing our finer side.

Hopefully, Burson will have a worldwide seminar covering its excellent code of ethics and demonstrating how they are now fully embraced by all its employees, at every level in the company — and invite everyone in the industry who cares to participate.