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Unlocking the power of data under new EU Regulation

EU data protection keyAt a meeting of the Justice and Home Affairs, part of the EU Council of Ministers that took place on 4-5 December 2014, the forthcoming EU General Data Protection Regulation took a further step to becoming adopted across all 28 EU Member States.

The meeting, attended by Chris Grayling, Lord Chancellor and Teresa May, Home Secretary and chaired by Andrea Orlando, Italian Minister of Justice and President of the Council marks a tipping point in the harmonization of data protection laws across all 28 EU Member States.

At that meeting, the EU Council of Ministers gained partial consensus on two important and inter-related points with respect to data security and protection that sits at the heart of the proposed EU Regulation: a general EU framework for data protection and a ‘one-stop shop’ (OSS) mechanism that can be used by data subjects in order to arrive at a supervisory decision in trans-national data protection breaches.

Partial agreement by EU Council of Ministers

The EU Council of Minister reached partial agreement on a general approach on specific aspects of the draft EU Regulation setting out a general EU framework for data protection.

This partial agreement on the general approach includes provisions that are crucial to the public sector (Article 1, Article 6, paragraphs (2) and (3), Article 21) as well as provisions relating to specific data processing situations as outlined in Chapter IX of the proposed EU Regulation.

In addition, the majority of the Council of Ministers agreed to the Italian Presidency proposal of a ‘one-stop shop’ (OSS) mechanism that data subjects can access in order to pursue their legal remedies in cases of important trans-national data protection breaches.

The technical architecture for dealing with data breaches and other issues under the EU Regulation will be ‘fast tracked’ in the coming months in order to get the technical aspects of this sorted out.

“One-stop shop” (OSS) to enforce regulation for major data breaches across EU 

The objective of the OSS is to arrive at a single supervisory decision in instances of trans-national data breaches and this should be fast, ensure consistent application, provide legal certainty and reduce administrative burden. Many advocates of such an approach claim that this is a good example of balancing the need for a uniform approach for data controllers while providing remedies for data subjects.

“This is an important factor in enhancing the cost-efficiency of the data protection rules for international business and thus contributing to the growth of the digital economy,” adds the communique from the EU Council of Ministers.

From a UK perspective, the Information Commissioner’s Office (ICO) is likely to be closely involved as the decision-making supervisory authority as to whether enforcement action is brought against organisations and companies that are located in the UK but that have created a data protection breach across trans-national borders.

Proposed EU Regulation is now a step closer to being finalised

The proposed EU Regulation has taken a step closer to being finalised in 2015 and partially clearing these two hurdles that were once regarded as “insurmountable” is a clear indication of the appetite for getting on with the job of getting the EU Regulation out there once and for all.

Clearly the EU Council of Ministers needs to finalize its version of the draft EU Regulation before negotiations can enter their final stage but this latest partial agreement is another example of incremental progress that’s been made in the last 12 months.

Many in Europe, including those in Germany, France and Italy, see this forthcoming EU Regulation in the wider context of protecting fundamental human rights.

On 5 November 2014, the German Federal Commission for Data Protection Commissioner Andrea Voβhoff and the European Data Protection Supervisor (EDPS) Peter Histinx held a panel discussion in respect of the state of play and perspectives the forthcoming EU Regulation.

One of the panellist, Head of the Department for International Affairs at Italy’s Ministry of Justice, Stefano Mura reiterated that the proposed EU Regulation isn’t only a EU single-market issue.

“We need the highest affordable standard of fundamental rights,” said Mura with reference to Article 8 of the EU Charter of Fundamental Rights, which provides that everyone in the EU has the right to the protection of personal data.

This was particularly reflected in the controversial judgment of the European Court of Justice in the right to be forgotten case that specifically referenced this right in concluding that an individual could have a search engine listing removed where the material it linked to was no longer relevant.

This theme was developed further by Isabelle Falque-Pierrotin, President of the CNIL, the French Data Protection Authority and also chair of the Article 29 Working Party.

Falque-Pierrotin noted that the right to be forgotten judgment had shown that some of the ideas in the forthcoming EU Regulation were already being developed through the courts and this highlighted the urgency to get the EU Regulation agreed and to demonstrate to the world that Europe had a common standard in place and the regulatory powers to back it up.

Although the participants to the debate identified a number of key outstanding issues to be resolved prior to the conclusion of the reform, process, there was some optimism that such issues would be overcome and the process completed before the end of 2015.

Why this matters?

This is significant as the organiser of the debate, European Data Protection Supervisor (EDPS) is an independent supervisory authority whose members are elected by the European Parliament and the European Council in order to protect personal information and privacy, in addition to promoting and supervising data protection in the EU’s institutions and bodies.

The role of the EDPS includes, among other things, advising on privacy legislation and policies to the European Commission, the European Parliament and the European Council and working with other data protection authorities to promote consistent data protection across Europe.

Why 2015 could be the most important year for European marketers

The forthcoming EU Regulation has been discussed and debated in extraordinary detail by the European bureaucrats and it’s clear that public patience is wearing thin as existing data protection laws such as the Data Protection Act 1998 looks increasingly out-of-date as it’s no longer ‘fit for purpose’.

It’s clear that European laws have struggled to keep pace with technology changes that has impacted two fundamental rights – privacy and identity.

In the wake of the Snowden revelations, there’s increased public expectation for a uniform approach to European data protection, with calls for more sophisticated compliance tools and even stronger sanctions for those organisations and companies that transgress the new rules.

However it would be wrong for the EU Regulation to be rushed through in its final stages as consensus is required in its scope and approach in order to be effective and workable.

But that time has almost arrived.

Marketers should start NOW and follow best practice guidance given by the ICO ahead of the EU Regulation as much of the Regulation will be a codification of this guidance.

Not doing anything now is a recipe for disaster and simply creates a business continuity risk that can so easily be avoided.

The Council of Ministers is still reviewing the draft EU Regulation at a technical level and negotiations on the proposed text between the Council of Ministers and the European Parliament will only commence once the Council of Ministers is ready.

The earliest there could be agreement on the draft EU Regulation is likely to be the first six months of 2015 – and the expectation is that the revised data protection framework will be in place by mid-2017.

 

Advertising the benefits of marriage – India style!

parsi posterBack in 1989 I joined the BBC in London and was very fortunate to have met my beautiful wife Fenella who then worked as the executive assistant to the Head of BBC World Service Training.

I often tell friends that joining the BBC was the best thing I ever did in my life and I was incredibly lucky to have found someone as wonderful as Fenella who also turned out to be a Parsi! With a small community of around 5,000 in the UK and just 80,000 globally, the odds-on meeting the girl of my dreams who was also Parsi was not high, to say the least!

Years later, when I entered the PR agency world, it appeared that my impending marriage became a national news story here in the UK!

So it was with some amusement that I read this morning that Parzor Foundation, with a little help from Bombay Parsi Panchayat and the Indian Ministry of Minority Affairs, has come up with a print campaign that quite simply urges Parsis to get married and have children.

Yes, really!

OK, so there’s an issue, recognised by UNESCO, that my tiny ethnic community may not make it through to the end of this century as to be a Parsi you need to have been born a Zoroastrian, and our faith doesn’t allow people to convert, largely on historical reasons that date back thousands of years and was a condition imposed on us by the Hindu Kings when we left Persia to escape persecution from the Romans and Muslims and settled in our adopted country India.

But I doubt running a national print campaign in India is actually the answer, is it? Falling in love and meeting the person of your dreams is actually down to luck and chance in most cases and imploring people in my community to marry each other could look as being a bit naive or even desperate.

However, I do think there’s a more serious issue that needs to be addressed and it’s one of religious leadership within the Zoroastrian community coupled with the relevance of our faith in the lives of its adherents.

Like it or not, I think we are fast approaching the point where inter-marriage with others from different religious faiths is probably a more tenable solution to the current problem, although I realise there are very strong views on this issue, which often bring out the worst xenophobic tendencies among some Parsis in our community.

But our faith was never intended to be the exclusive preserve of those of the Royal Court as exemplified by Cyrus the Great and Xerxes the Great from ancient Persian times.

Parzor Foundation is a Delhi-based NGO that works towards preserving Zoroastrian heritage and Madison BMB is the creative agency behind this humour-laden effort, titled ‘Jiyo Parsi’.

The campaign attributes the dwindling numbers of the Parsi community to four main factors, namely, an increasing preference for staying single, for marrying late, and for having only one child, and, of course, to infertility.

While the campaign speaks about each of these reasons, it focuses on in-vitro fertilisation (IVF) for which the government is offering financial help to members of the Parsi community, under the Jiyo Parsi scheme.

“The Parsi community in India has gone from 114,000 people in 1941 to just 61,000 people in 2001. And more disturbingly, for every 800 deaths there are only 200 births in the community. We thought, instead of making it just about IVF, we should talk about the entire issue, about the way the entire Parsi population is on the decline,” explains Sam Balsara, managing director, Madison World and himself Parsi.

Just to put this into perspective, India’s population reached 1bn in 2001 and is likely to become 1.3bn by 2025, becoming the world’s most populous country and overtaking China.

“While doing our research,” explains Shernaz Cama, director of the UNESCO Parzor Project, “we came across some places where, hundred years ago, around 1,000 Parsis used to live. But now they are just deserted villages. The whole point of the campaign is not about marriage; instead, it’s about having more children, because that can keep the population stable.”

The irony of the situation is not lost on Balsara – a mass media campaign that’s targeted at just a handful of Parsis who’re based in different parts of the country.

The ad agency feels humour can help to lighten the message and leverage the “Parsi sense of humour” to address the problem at hand. Perhaps they should’ve employed a stand up comedian instead?

“We decided as a team to put the messaging out in a way that wouldn’t be bleak or morbid. On the contrary, we decided to go the other way and use humour as a weapon,” explains Raj Nair, chief creative officer, Madison BMB.

Other folk in ad land tend to agree with this strategy, but whether it will work in encouraging Parsis to get married and have babies only time will tell and it would be a very brave planner who thinks there’s a correlation that could be made on such an outcomes that can be plotted on an excel spreadsheet!

“I think it’s based on certain fundamental insights into the community. That’s what makes it incredibly real and effective. It’s laced with self-deprecating humour which is also the leitmotif of the brand – ‘the Parsi’. Overall, a glorious effort,” claims Swapan Seth, CEO of Equus Red Cell, a WPP-owned advertising agency in India.

But telling adults not use condoms in order to get pregnant probably wasn’t the most intelligent aspect of the campaign, was it?

Let’s hope that the campaign helps to raise the issue so it becomes a talking point rather than being seen as a clumsy attempt to reverse the birth rate in India’s smallest ethnic minority community.

“Instant death” to prospect-driven DM is on the cards

Gagging-DMThe stark warning, delivered by market research agency fast.Map, is contained in its Annual Marketing-GAP Tracker Report, published today.

According to the research, marketers consistently under-estimate the level of consumer concern regarding the use of contact details and the unauthorised distribution of such information to third parties, say the report’s authors.

Most consumers “don’t bother to even read the opt-out box” and the report’s authors warn that the forthcoming EU General Data Protection Regulation “could spell instant death to third-party data collection companies and an end to prospect-driven direct marketing”.

Based on the responses of two panels – 1180 consumers and 310 marketers –fast.Map found that marketing respondents shockingly “underestimated by up to 100% all consumers’ areas of concern”.

For example, 85% of consumer respondents said they would be “concerned” or “very concerned” if their details were passed to another organisation but only 45% of marketers surveyed thought consumers might see this as a problem.

In addition, 83% of consumer respondents said they’d be worried if an organisation didn’t keep the promises it had made in its permission statement and again 45% of marketers surveyed failed to appreciate the depth of consumer feeling on this issue.

More worryingly for the DM industry is that only 6% of consumers in the survey would opt-in to receive marketing messages from all the companies that currently contact them, although 19% of marketers thought they’d be willing to receive offers about future products and services.

With the swing towards permission-based marketing now a reality for all companies, audience and customer segments expect to receive something in return for the use of their data, such as generous discounts, special offers and samples.

Marketers can’t now take opt-in as a default position, even where there’s an existing business relationship unless there’s something of value delivered as a result of wanting to maintain contact with the customer.

“This is the new battleground of marketing and there’ll be a huge growth in compliance and helping marketers gain consent,” predicts David Cole, managing director at fast.MAP.

He added that marketers would have to deploy skills of “analysis, copy writing and creativity to engage people on that new battleground”.

It’s clearly a training issue that the marketing industry needs to face up to in order to avoid the sanctions for breach of the forthcoming EU Regulation that could be up to 5% of global turnover or €100m in fines for the biggest offenders.

 

‘Miracle Whip Factor’, brand dispersion and Ed Miliband

MilbandMiracle Whip is salad dressing similar to mayonnaise and is popular with American and Canadian consumers. Not a subject that you think would stir strong emotions?

Well, you’d be wrong!

When marketers at Kraft began researching consumer attitude towards the salad dressing, they found surprisingly deep emotions. It turns out that a substantial number of people love Miracle Whip. And many can’t stand the stuff!

Back in 2011, with this consumer insight, Kraft launched a high profile US ad campaign that made a virtue out of this schism, using celebrities like Paula D from Jersey Shore and the political pundit James Corville.

Some people in the ads praised Miracle Whip’s yumminess, whereas one person said they would end their relationship if he found out his girlfriend ate the stuff and another said they would rather lick your shoe than try it.

Without a hint of irony, brand director Sara Braun proudly announced on the back of the research that Miracle Whip “is a polarising product” and that they were trying to own up to this reality.

Well, love it or hate it, social media postings on Twitter rocketed by 631% and Miracle Whip clocked up a corresponding 14% increase in sales in the process.

And this got me thinking about Ed Miliband – not because I think he eats Miracle Whip (well, I’m not sure to be honest!) but because brand managers need to think the same way as political campaign managers.

The point is, when political campaign managers formulate strategy, they measure their candidate’s negative polling numbers as a matter of course – after all, knowing what share of the electorate will never be persuaded to vote for your chosen candidate is essential in determining how to approach undecided voters.

You could say it would take a miracle for Ed Miliband to remain as leader of the Labour Party by the time we tuck into left-over turkey sandwiches on Boxing Day, but I digress..

Marketers gauging consumer attitudes have traditionally relied on ‘mean’ or ‘net advocacy scores’ but over-reliance on these metrics can be a bit misleading.

For example, a brand with a middling score may in fact be highly polarizing, with large numbers of fervent supporters and passionate detractors cancelling each other out.

Identifying these instances is increasingly important, because social media gives brand haters ready outlets for transmitting their dislike.

This is a subject that has fascinated academics for some time including those at Arizona State University that carried out research evaluating various brands’ polarization quotient and then examining the relationship between polarization and stock market returns.

The researchers found that highly polarizing brands tend to perform more poorly than others, but they also tend to be less risky and exhibit relatively little variation in stock price.

Whether this is good news for the Ed Miliband is a moot point. But let’s get back to Miracle Whip.

To thrive in this environment, brand managers need to think about adopting new marketing strategies.

And this starts with an understanding of brand dispersion, a metric that measures polarization of a brand.

Brand managers also need to recognise that having a group of consumers who hate your brand can be a good thing – some brand owners have boosted sales by increasing the number of product haters.

HellmannLet’s take Hellmann’s Mayonnaise and Miracle Whip in a taste test.

And let’s suppose that each brand manager for both products surveys three consumers and asks each of them to rate their product on a scale of 1 (very poor) to 7 (excellent). Let’s say Hellmann’s Mayonnaise receives ratings of 3, 4 and 5 and Miracle Whip scores 1, 4 and 7.

On this basis, each brand has the same mean score 4, but what lies behind that mean is an important difference.

Hellmann’s Mayonnaise scores are clustered tightly together but Miracle Whip scores are widely dispersed – it has one brand lover and one brand hater, so it’s a polarizing brand.

Outside of the taste test, there are various ways to measure brand polarization.

One of the simplest ways is to look at the percentage of consumers who give a brand a rating of 6 or 7 and the percentage who give it a 1 or 2.

YouGov chartThe higher the percentages of brand lovers and brand haters, the greater the polarization.

For example, according to research by YouGov undertaken in 2013, McDonald’s is a highly polarizing brand – 33% of consumers love it and 29% hate it whereas Intel has low polarization. It’s loved by 33% of consumers but hated by a meagre 3%.

Another way to determine polarization is to calculate the standard deviation of consumers’ overall ratings.

For example, the higher standard deviations indicate greater polarization.

This method is perhaps more accurate than a net advocacy score and can be especially useful when brands are rated on 3-point or 5-point scales, although according to researchers the two methods tend to produce similar results.

So back to Ed Miliband and his camp.

What should they do’ given he’s pledged to fight the next general election campaign ‘street by street’?

Well, one way to reduce polarization is to do what most of us do when confronted with people who dislike us: try to change haters’ minds. This is a strategy that usually feels the most straight forward and comfortable. Brand managers who successfully deploy it reduce negative word of mouth and create a larger pool of potential buyers.

About ten years ago, General Mills’ Betty Crocker brand, best known for cake mixes, icing, and other cook-at-home dessert products was suffering because of increasing concern over obesity amongst the US population. And this precipitated a shift towards low-carb products as well as criticism of food industry marketing techniques that were accused of creating a poor diet issue in the first place. At the beginning of 2008, around 4.5% of consumers could be classified as Betty Crocker haters.

So General Mills went on the offensive and decided to take steps to reverse this polarity in opinion and in April 2009 launched a social network, MyBlogSpark to promote Betty Crocker and other brands in its portfolio and posting responses in order to diffuse bloggers’ complaints.

BettyThat year, Betty Crocker became the first major brand to develop a gluten-free baking mix. It soon partnered with celiac disease foundations and launched a website for consumers, Gluten Freely (now ceased).

The strategy appeared to work as by May 2011, the share of Betty Crocker brand haters had dropped to 2.8%.

Any bad word of mouth about a brand has a multiplier effect and research shows that negative invective can influence neutral consumers. Just take a look at TripAdvisor and read the negative comments on hotels listed on its site if you don’t believe me.

Another neutralizing strategy and perhaps one not to be adopted by the Miliband camp is to antagonise brand detractors (of course they may read this blog but it’s too late!). This ‘Ryanair Effect’ can, in certain circumstances, reinforce the brand’s connection with its most enthusiastic consumers because people often feel compelled to defend a favourite product that has come under attack.

And the defence mounted by fans often sways neutral consumers into becoming supporters – but it’s a high risk strategy.

Alternatively, a brand manager could consider amplifying a polarizing attribute in the hope of turning a negative into a positive.

In the UK, the most famous example of this is Marmite. In fact, its own tagline is ‘Love it or hate it’ which makes a virtue of the fact it attracts such strong opinions.

MarmiteIn 2010, it took this a step further and launched Marmite XO – an extra strength version. Using social media, brand owner Unilever identified 30 consumers who were especially devoted to the brand and invited them to taste testings (complete with Marmite-flavoured cocktails) and launched a Facebook group.

Again, the strategy seemed to work as the promotion generated 54,000 visits to the website and 300,000 Facebook page views, and retailers sold out of Marmite XO as soon as it appeared on the shelves.

When Strongbow saw that sales in the cider market were moving in the direction of trendy Magners cider that encouraged younger drinkers to imbibe it over ice, Strongbow could’ve decided to fight back in order to recapture some of these lost sales. Instead, back in 2009 it decided to appeal to its traditional customer segment and focused on the fact that the drink was to be consumed all year round, not just when the weather turned hot.

Again, such a strategy paid off and sales increased by 23%, maintaining its leading position in bars and clubs in the UK. Magners of course realised that it had to appeal to a wider customer segment but sales of its cider have continued to slip by 10.3% in the first half of this year.

What each of these examples illustrates is that brand managers now have access to data they could only dream about before. However, learning to assess and exploit brand dispersion is a natural step in this progression.

Brand managers – and political campaign managers – should avoid relying on averages; they need to dig deeper to uncover and understand the full range of attitudes towards their brands. Although this is especially critical for polarizing brands, all marketers should be cognizant of their brands’ dispersion and should track it over time.

Fuelled by social media, pockets of haters can quickly develop and spread, even for brands that once enjoyed universal appeal.

The trick is to spot an opportunity to reverse negative polarization before it’s too late.

And that’s the Miracle Whip Factor.

Diversity Matters

Black sheepActively valuing diversity and managing inclusion is the hallmark of a successful global organisation – irrespective of its size or whether it’s commercial, voluntary or part of Government. Diversity matters because in order for such organisations to reach levels of world-class performance, they must embrace a wide range of attitudes, values, beliefs, perceptions and behaviours and not just of those that are employed by them but also those that are shared by the communities that they seek to serve.

Research on both sides of the Atlantic tends to show that social inclusion in the way described isn’t a libertarian ideal but actually makes good business sense.

I was reminded about the power of diversity when I recently ran a leadership workshop for one of the Armed Forces that had found it a struggle to attract, recruit and retain applicants from black, Asian and other minority ethnic backgrounds.

What’s interesting is that the UK is set to become the most diverse country in Europe by 2020 and organisations that don’t reflect a greater degree of diversity than they do at present will start to be left behind in the battle for talent.

Diversity can manifest itself in many ways, including:

  • family background
  • age
  • ethnicity
  • gender
  • physical attributes, qualities and appearance
  • nationality
  • sexual orientation
  • educational and social background
  • religious beliefs.

Diversity doesn’t always come easily for many organisations and one reason is that there’s a natural tendency for humans to gravitate towards people they perceive as being similar and where the recruitment focus is fixated about whether or not someone will ‘fit in’.

To some extent, I’m sympathetic about this.

Either consciously or subconsciously we tend to feel comfortable, at ease and secure when we are with people like ourselves.

But we have to see beyond our own prejudices and not fall into the trap of hiring PLUs (‘people like us’) as that’s a recipe for disaster – we will lack genuine innovation, miss the opportunities for learning and developing new skills and competencies and from a competitive perspective, we’ll start to lose market share to those with better products and services that are much more in tune within rapidly changing market and customer segments.

Some argue that uniformity can hold an organisation together, particularly if this is uniformed organisation such as the Armed Forces or indeed the Scout Association – both of which I’ve had the privilege of working with.

However, as recognised by these organisations as well as others I’ve worked with, sufficient diversity is required in order to stop these organisations from dying. For any system to survive there needs to be sufficient diversity within it to cope with environment change amongst many other things.

Difference certainly adds value. And I was reminded of this when I received a copy of a book that told the story of an inspirational war-time leader. But it’s likely you may never have heard of this remarkable individual.

Field-Marshal-Sam-ManekshawField Marshall Sam Hormusji Framji Jamshedji Manekshaw (Sam Manekshaw) was Chief of the Indian Army from 1969-1973. He was born to a Parsi family from Amritsar and was a practicing Zoroastrian, the smallest ethnic minority group in India.

The book, written by Brigadier Behram Panthaki (former Aid-de-Camp to General Manekshaw) and his wife Zenobia Panthaki, traces the life and times of one of the most talented army generals to have served India and its allies, particularly at the point when the British Government announced its decision to grant independence to India on 20 February 1947 and the partitioning of India and Pakistan as a result of the Radcliffe Line, drawn by Sir Cyril Radcliffe that took effect on the 17 August 1947.

It was clear that Sam Manekshaw was destined for a phenomenal military career but what struck me about this story was the fact that Sam Manekshaw defied convention. He was someone who stuck by his values and always placed the needs of others before that of himself.

And he did this his way. As a result, it wasn’t always easy but he showed true leadership and courage when it really mattered and he made friends of everyone who had the honour of working with him.

Similarity and diversity are in fact two sides of the same coin. Both sides are necessary and the more tightly similarity and diversity are bound together, the greater the value of the currency.

And as the remarkable life story of Sam Manekshaw illustrates, leaders must help people to understand and value those things that they have in common and which bind them together.

And at the same time, leaders must actively recognise, acknowledge and capitalise on the differences their people bring into the workplace and consistently encourage them to display and utilise those differences for the benefit of the organisation as whole.

Ardi Kolah was the former Director of Marketing and Communications for the Defence Academy of the UK (2003-2006)

Why failure can be good for you

FailureThis may sound counter-intuitive but let me briefly explain why.  Failure isn’t fatal. But failure to change might be. In the world of American basketball, John Wooden is a legend. He coached UCLA to win 10 NCAA national championships in just 12 seasons. And he achieved this feat because of his ability to constantly adapt to new players, new rivals and new styles of play.

In our own industry, marketers and PR professionals need to be open to learning from failure.

Business leaders are continually being faced with complex changes: an aging population, the rise of the middle class in emerging economies with a different attitudes and beliefs and constant technological advancement of the web and mobile technologies that disrupt well-established business models, to a name a few.

What we’ve learnt over the past decade is that in a shifting environment consistent business performance isn’t enough to perpetuate itself. The recent shock departure of Tesco’s CEO and its lack lustre financial performance of late shows just how far “Britain’s most admired company” can fall from hero to zero.

To keep their organisations relevant, CEOs and other leaders must heed the reinvention imperative. This is why failure can be good for you.

This has happened in some of the biggest blue chip brands on the planet. Take IBM. Over the past century IBM has gone from manufacturing adding machines to inventing the PC to earning the majority of its revenues from services.

Another is Xerox. When the company began it was so closely identified with photocopiers that its name became not only the eponym for its product category but a common verb. Then Xerox went on to invent Ethernet and today it competes in areas such as mass-transit ticketing systems and e-discovery solutions.

Just ten years’ ago Samsung was known only for consumer electronics. Today it’s one of the most valuable brands in the world and spans advanced technology, construction, petrochemicals, fashion, medicine, finance and hotels.

Even adversity can be the precipitation for change.

According to the Institute for Crisis Management, some 75% of crises actually start internally – half of them from within management and a quarter with other employees.

Enhancing employee engagement may help to militate against this but it can’t be completely eradicated as organisations need to be able to manage human failure on a daily basis. Which is why to some extent internal crises are the hardest things to manage and when the lawyers get involved inevitably such short comings are swiftly covered up under a cloak of silence. But silence isn’t a sustainable strategy, even before the development of social media. It’s incredibly damaging today and organisations need to learn to express concern without conceding liability.

Brand Jack bookPR academic Quentin Langley, in his recent book Brand Jack, observes: “Those publics with long-term interest in your organisation need to be engaged on a long-term basis. You can even take this to another level, as Shell did with its post-Brent Spa, post-Nigeria “burden-sharing strategy”. This involved identifying “special publics” – academics, NGOs and the media – and engaging with them in round-table discussions about the problems facing oil companies.

“The Brent Spa crisis – when a Greenpeace campaign had forced Shell UK to back down on plans to dispose of an oil storage platform by deep sea disposal, almost certainly the safest way, and adopt a risky and expensive strategy of onshore dismantling – had taught Shell important lessons.”

From a business perspective, senior managers need to constantly think about reinvention and change in everything they do. It’s essential to get beyond pride in “what we’re really good at” which ironically can blind people to changes in what the world needs and what customers value most.

A key lesson that needs to be learnt is knowing how to make the distinction between enduring trends from those that are short-lived. Remember the fuss that surrounded Second Life and how we were all now going to play out our fantasies for real in a virtual world and make money from this?

Decision-makers – and even politicians – must be willing to take short term hits to performance in order to lay the ground work for long-term advantage.

Pressure from the London Stock Exchange to deliver in the next quarter is a given. The job of the business leader is to counter it with a point of view on where the industry is headed in the next five-10 years. If your strategy strikes outsiders as unexpected, that’s fine. They don’t know your business as well as you do.

Success is never final, failure is never fatal. It’s courage that counts.

 

What value would you put on having a good reputation?

journalistIt used to be said that what a good journalist needs is a strong pair of legs, plausible manner and rat-like cunning. 

And wasn’t it the case that only politicians and estate agents ranked lower than journalists in the wake of the meltdown of News of the World?

But shouldn’t we add public relations professionals to that list too?

Well, not if the PRCA has anything to do with it.

And I’ll come back to this in a moment.

PR professionals know three important things – important if they want to keep their jobs, that is.

The first is that their continued career within the profession depends on being able to persuade people to read, watch, listen, and one way or another buy a product or service or support a cause or point of view.

The second is that their continued career progression depends on pleasing their even more immediate customer, their boss.

And the third, for those who work in “traditional” or “mainstream” PR is the obvious point that there’s vastly more consumer choice as a result of the explosion of online and mobile communications.

Rabbit Andersen Consulting campaignI remember when I started my PR career back in 1992 at Andersen Consulting (Accenture) and we had what looked like a highly complex sign-off procedure for any piece of PR and marketing collateral you could think of – news release, newsletter, sales presentation, or whatever.

At the time, I thought it was cumbersome that so many people at associate and partner level had to sign off on this stuff.

But with hindsight, I should’ve thought then what I think now.

This was an excellent way of managing reputation – from the highest level – that our words matched our deeds.

Fast forward to the demands of PR in a 24/7 world and you could argue we just don’t have the luxury as we did back then to reflect to the same degree on the words and the deeds of our outputs.

PR folk are now expected to ‘knock something off’ for the website or email newsletter with the implication that because you’re writing for the wild world of the blogosphere you can be less exacting in your professional standards.

Even responsible PR and marketing practitioners seem to feel they’ve a licence to bend the truth and sail close to the wind when they’re writing online.

Yet in the minds of desired audiences, customers, clients, prospects and supporters the distinction between what they receive offline and what they read online has disappeared. They expect an individual or organisation to have the same level of accuracy irrespective of the medium.

The trust of your customers, clients, prospects and supporters matters more than anything else in today’s competitive environment – perhaps even more than what you say about your products or service.

Trust has become the single biggest business issue facing organisations and companies today. And managing reputational risk is a key priority, not just for the director of communications or PR agency but also for the entire boardroom and the senior leadership team.

It’s against this backdrop that the PRCA has taken a bold step to help inform and stimulate a debate within the PR profession that seeks not just to explore how and what reputation is within this modern context but also why it matters from a financial point of view.

This isn’t as easy or straight-forward as it sounds, so the PRCA has engaged with some of UK’s leading PR practitioners to explore this in greater detail including Sue Garrard, Senior Vice-President of Communications and Sustainable Development, Unilever; Nigel Gilbert, Chief Marketing and Communications Officer, TSB Bank; Amanda Mackenzie, Chief Marketing and Communications Officer, Aviva; Zitah McMillan, Director of Communications and International, Financial Conduct Authority; Sheila Mitchell, Marketing Director, Public Health England; George Pascoe-Watson, Partner, Portland and Chris Satterthwaite, Chief Executive, Chime Communications.

Launched today, the Economics of Reputation‘ toolkit provides a one-stop shop for the busy PR professional to get to grips with the latest thinking on the subject and encourages debate within the industry through #ReputationMatters on Twitter.

Tony LanghamThe campaign is being led by Tony Langham, Lansons Chief Executive and PR Council Vice Chairman at the PRCA.

“The sheer volume of literature on reputation means that developing a clear understanding of reputation has become incredibly problematic.

“This toolkit has been developed to provide a straightforward way into this hugely complex topic, which is now a leading issue for the business world. We hope that this will provide a basis for thought-provoking debate, which we aim to stimulate over the remainder of the year,” says Langham.

The toolkit has been produced by Now and is sponsored by BNY Mellon and can be downloaded for FREE by clicking here.

Ardi Kolah is an elected member of the PRCA Council and author of the best-selling Essential Law for Marketers, published by Kogan Page (£19.99) available here.

 

Will shuffling the pack create a winning hand for the Tories in 2015?

cameron-kitchenBritish PM David Cameron is an effective communicator although perhaps not in the same league as Tony Blair. However, Cameron did learn his trade whilst working within the public relations industry as director of communications for Michael Green at Carlton Communications. I remember it well. I once had a meeting with both men. So it’s probably fair to assume that Cameron recognised the PR challenge that was starring him in the face.

The fate of the Tories in winning the next General Election remains in the balance despite the resurgence in the fortunes of the UK economy as evidenced by a recent spate of research and statistics that show Britain’s economy is growing faster than any other large advanced economy this year.

However, until ordinary people start to feel prosperous again, the recovery will be viewed as benefiting only the rich and well-off.

OsborneThis air of superiority and elitism that the Cabinet exudes has dogged Cameron ever since taking office as it’s filled with Anglo Saxon, blue-blooded white Etonians and Oxbridge educated multi-millionaires.

Unsurprisingly, the perception of elitism has been perpetuated much to Cameron’s best efforts to portray the Government as on the side of the ordinary person in the street. Sadly the act began to wear a bit thin when the electorate were being given lectures on how the nation needed to tighten its belt by these same multi-millionaires.

Understanding that the popularity of his party will need to extend beyond the nicer parts of the UK populated by the chattering classes, Cameron has gone sex crazy.

Well to be more precise, he’s now got five women around the Cabinet table: Teresa May (Home Secretary), Nicky Morgan (Education Secretary), Liz Truss (Environment Secretary), Justine Greening (International Development Secretary) and Theresa Villiers (Northern Ireland Secretary).

Women in CabinetBut will this make-over be enough to swing the electorate behind the Tories at the General Election next year and give it another chance of running the country sans LibDems?

Many commentators are starting to sound much more positive of the chances of Cameron being able to pull this off in the face of a Labour Opposition that has singularly failed to pull far ahead in the polls against the incumbent party of power.

According to Tory pollster Lord Ashcroft, the Conservatives are slightly further behind Labour in marginal seats. Yet they need to be at least four or five points ahead nationally just to be the largest party and do better than that in order to command a majority.

The rise in popularity of the right-wing UKIP party presents a problem for the Tories as they struggle to appeal to disaffected voters without sounding xenophobic or racist. The latest YouGov poll suggests that 14% of respondents who voted Tory in 2010 said they planned to vote UKIP next time round.

But according to YouGov founder Peter Kellner, the “fundamentals” are on the Tories’ side and what Cameron needs to do is to turn his party’s strengths on the economy into votes.

However, just winning back defecting Tory supporters by focusing on their living standards won’t be enough.

women powerThe demographic profile of the UK has changed, along with the rest of the world and now women outnumber men and also hold down most of the jobs in the economy.

Perhaps Cameron is now getting in touch with his feminine side which could see him return to power next year but also deliver what he’s always promised he would do – a more compassionate and caring conservatism.

But for that he’s likely to need the feminine touch.

Ardi Kolah is author of the popular cartoon series of books Guru in a Bottle, published by Kogan Page in UK, India and USA.

What the arts can learn about sponsorship from sport

QB15This isn’t a one-way street of course. There’s a lot that sports can learn from the arts – for example creating unique experiences that reach desired audience and customer segments in a precise way that’s memorable and doesn’t suffer from ‘sponsorship clutter’ that often afflicts much bigger property types such as a premier league football club.

However, the arts sector needs to become much more commercially savvy in helping itself achieve anything like the success achieved by sports rights owners over the last 40 years that has generated billions in support of sports and entertainment that relies on sponsorship income for its existence.

Earlier this week, UK arts charity House of Illustration opened its doors as the world’s first gallery celebrating illustration in all its form, inspired by the incomparable Sir Quentin Blake who’s perhaps done more than anyone in the world to inspire children to take up reading through his collaboration with the beloved children’s author Roald Dahl.

GuestsFrom a sponsorship perspective, there’s now an “once-in-a-lifetime” opportunity for supporting this small but truly inspirational charity that has education at its heart and that will allow brand owners to join the charity in its remarkable journey.

Before unpacking how this could be achieved, it’s worth thinking about more traditional marketing outside of sponsorship and why this is on the decline.

Advertising on TV and national newspapers and magazines is still effective when integrated with other media channels such as online, mobile and social but advertising expenditure globally apart from online advertising is in decline.

This has come about largely as a result of the fragmentation of media and the fragmentation of audiences. In turn, this has meant that brand owners can’t just rely on more advertising to get their messages across.

When done well, sponsorship achieves a dialogue with the audiences it’s trying to reach. It’s less about advertising and much more about collaboration with its partners. In many respects this is a much deeper level of engagement and brand partnership that can be achieved through advertising on its own.

Rev-Run-and-Mel-BOver the last 20 years, I’ve worked with many brands and sports rights holders in helping to drive a higher return on objectives and return on investment from their sponsorship activities and have used these same techniques within the arts sector to achieve results for organizations including MOBO, the Raindance Film Festival and the British Independent Film Awards.

A very common mistake made by rights holders is to produce communications that are produced from the “inside out” rather than “outside in”. What I mean by this is arts organizations need to engage with a potential sponsor on the agenda that really matters for that particular brand owner.

It’s all too easy for an arts organization to be seduced by its own wonderfulness but you can quickly lose the plot if you fall into this trap.

Given that great communication is about influencing and changing behaviour, then the vision delivered by the arts organization needs to inspire. And the challenge is to do this from the point of view of those that the arts organization wants to talk with – the potential sponsors.

The way in which successful sponsorship is sold and bought today is along the lines of tangible benefits; intangible benefits and premium benefits.

This is the “Holy Trinity” of sponsorship. It’s important for any arts organization to have complete clarity on what it owns now, what it will own in the future and as a result what rights it can deliver to a prospective brand partner today.

If you don’t have this sorted out, then any due diligence carried out by a prospective sponsor will quickly result in no further action and that isn’t an outcome any arts organization will want given that there’s limited time and resources at its disposal and these must be used selectively in order to get a result.

In the current climate it’s important sponsors know what they’ll get for their money and the next step is to demonstrate how they’ll get a return on their objectives and a return on investment.

Return on objectives

ROO requires the prospective sponsor to undertake analysis in terms of whether the property type (arts) is a basic fit with its brand communication, marketing and sales objectives; whether it’s feasible in its time frame; and whether the sponsorship can be used to drive customer loyalty as well as customer acquisition.

In some cases, the brand partner will be engaged with the arts sponsorship because it satisfies corporate social responsibility (CSR) objectives, although such objectives aren’t mutually exclusive of commercial ones.

Should it tick all the right boxes, then the next challenge from the sponsor’s perspective is how to bring the investment in the arts sponsorship alive. And that’s where the arts organization can deliver more added-value.

Olympics CokeThe creative quotient of any brand partnership is its vital ingredient. If we were sitting in the office of an Olympic sponsor we’d be talking about how we can sprinkle the ‘magic dust’ of the Olympic Games on to the brand partner’s communications.

And many arts organizations, just like the House of Illustration, have bucket loads of magic dust! It’s this intellectual process that helps differentiate arts organizations in the highly competitive sponsorship market.

EinsteinAlbert Einstein struggled for years to make sense of the many complexities and contradictions of physics and the real world. The sheer complexity he was trying to explain was mind boggling.

However, through creativity he eventually saw the light, by taking a step back and reflecting on the patterns and symmetries, applying hypotheses and deduction, he discovered the relationship between energy and matter was actually very simple, that E=mc².

So we need to understand the objectives of potential sponsors and position the brand partnership opportunity as a creative and powerful “solution” for them. And this needs to be bespoke.

Return on investment

The ability to demonstrate the value of what the sponsorship delivers is incredibly powerful for the dialogue between an arts organization with brand owners. This is why arts organizations need to audit the assets – tangible and intangible – and place a financial value on them that is defendable in the eyes of a prospective sponsor.

Tangible value

Examples of tangible values include: on-site signage/branding visible to visitors; TV viewers; web site visitors; database of opt-in visitors; advertisements in the arts organization’s magazine and other publications; and mentions in the press, radio, outdoor advertising, and other associated literature.

It will also include exposure of a brand partner’s logo on the arts organization’s web site. Other tangible values includes conference facilities, hospitality and entertainment facilities; an App that could provide content to mobile users on a subscription basis – or is free as it is sponsored by the sponsor.

If the arts organization were to run radio ads featuring the voice of famous personalities inviting visitors to come and there was an on-air credit for the brand partner, then this too is a tangible asset.

Intangible value

Depending on the needs and requirements of the sponsor, an arts organization should be able to create a menu of intangible benefits from which it can select the most appropriate for meeting the needs and requirements of the sponsor.

Typically, intangible benefits are brand essence fit with sponsor; visitor fit with sponsor’s customer segments; corporate social responsibility (CSR) of the sponsor; promotional options; reputation enhancement; geographical location and access to intellectual property (IP) rights.

Premium benefits

Lauren-ChildThis could be a mix of tangible and intangible benefits and could include special appearances by those connected with the arts organization, such as illustrators and artists like Lauren Child in the case of the House of Illustration; special invitation-only evenings; specially commissioned works that could be exhibited within the sponsor’s own office environment; and exclusive competitions, prizes and promotions for the sponsor’s employees, partners, affiliates and agents.

Get this right and the arts organization will be on its way to creating a platform for brand partnerships that will endure and deliver benefits for all parties concerned.

Ardi Kolah is a Board Trustee of the House of Illustration and the author of High Impact Marketing That Gets Results. He’s also author of Improving the Performance of Sponsorship, to be published by Routledge in 2015.

Marketers need to reach consumers that shop around the clock

shop around the clockAccording to new research published by brand strategy consultants Vivaldi Partners Group, there’s a new breed of consumer that can’t actually be reached through traditional marketing channels. 

These ‘Always-On Consumers’ (AOC) now represent nearly half of the most valuable customer segments in the US.

This group can’t be segmented along neat demographic or socio-economic lines but instead exhibit five distinct behaviour types that once identified can provide marketers with clues as to why these consumers choose to connect with certain brands and not others.

“There are significant differences in how these consumers use or consume new technologies, why they use various new technologies, why they engage, how they connect with brands and how they shop.

chart 1“As a result, there are enormous implications for how to build brands with these consumers and how to connect with them in the future,” explains Dr Erich Joachimsthaler, CEO of Vivaldi Partners Group.

The US study surveyed 574 respondents (55% aged between 16-39 years old) by focussing on their consumption patterns and how they connected with brands and businesses as well as why they chose to do so.

In this way, the researchers felt they could more accurately understand the attitudes, values, beliefs, perceptions and behaviours of the different consumer groups that make up the AOC segment.

In this real-time, 24/7 world, AOCs behave in very different ways. Marketers need to recognise the rise of the omni-consumer – the shopper who’s active at any time of day.

They must have a plan in place to attract the modern-day consumer who’s constantly on their smartphone or tablet device looking for the latest offers or deals on products.

The days of traditional bricks and mortar, 9am to 5pm shopping habits are gone and have been replaced by ‘twilight shopping’ between 5pm and midnight, often on mobile devices.

There are five distinct shoppers that fall into this description:

  1. “Mindful explorers” (27%)
  2. “Social bumblebees” (22%)
  3. “Ad blockers” (20%)
  4. “Focused problem solvers” (18%)
  5. “Deal hunters” (13%)

 

“MINDFUL EXPLORERS”

Here, Mark is typical of this segment. He tends to keep a low profile and wants to protect his personal identity and data. He tends to be a news junkie and an avid gamer. In traditional marketing thinking he would be called an early adopter, so he’s likely to be one of the first to acquire Google glasses.

Chart 3He’s a new product evangelist and will share his views widely.

From a marketer’s perspective, this segment is very useful as it’s more likely than any other AOC to take a brand survey or join a brand’s online community because this will be seen as an opportunity to offer valuable feedback to brands that they care about.

Social style

Compared with other segments within AOC, these consumers tend to spend less time on social networks and post less frequently. Although concerned about privacy and not wanting to be the centre of attention, these consumers have many online friends in the gaming community whom they’ve never met in person.

Shopping style

These consumers don’t spend spontaneously and only shop for items that they actually want to search for. Typically, a purchase decision is influenced by a number of information sources including recommendations from family and friends and online customer reviews.

“SOCIAL BUMBLEBEES”

Here, Simon is typical of this segment. He has a constant presence in the newsfeeds of 400+ Facebook friends and he usually posts 3-4 status updates a day, including links to his favourite songs and funny YouTube videos and brief, light-hearted posts about his daily activities.

chart 2These consumers are more extrovert than other AOC segments and aren’t afraid to broadcast their opinions.

As busy professionals they recognise that work colleagues can see their status updates and are more relaxed when it comes to privacy issues. They also tend to shop on the go via a tablet or iPad.

Social style

These consumers tend to use email mainly for work purposes and Facebook for keeping in touch with friends and family with daily, casual interactions. They are enjoying sharing content.

Shopping style

These consumers are much more impulsive and may even purchase goods that they may not have been searching for on the internet. Typically, when looking to buy a high ticket item, this group will Google the brand/product, read a handful of reviews and usually make a decision within a day or two.

“AD BLOCKERS”

Here, Anna is typical of this segment and as the description infers, doesn’t like to be marketed to although she isn’t that protective about her online privacy. She tends to have less than 100 Facebook friends and tends to log in daily to chat and share updates with a relatively small but active circle of friends.

chart 4She doesn’t tend to pay too much notice to any online content unless it’s a message from someone she knows personally.

From a marketers’ perspective, using banner ads, branded content, news articles and blog posts aren’t likely to be that effective with this segment.

Social style

These consumers tend to have a tight-knit family and circle of friends. The typical type of social interaction is spent emailing this circle and browsing pictures on Facebook of these individuals where this personal connection exists. Although not extrovert by nature, these consumers don’t have a problem being the centre of attention once in a while.

Shopping style

This is perhaps the least active consumer group compared to other AOC segments as they tend to spend the smallest amount on shopping, both online and offline. Shopping online tends to be for cooking and cleaning supplies and other household items.

“FOCUSED PROBLEM SOLVERS”

Here, Felicia is typical of this consumer segment. They tend to have a higher age profile and are professionally qualified, often with a family. She is purposeful in her online activities and will not be fazed by managing her finances through online banking, making restaurant reservations, booking flights or holidays or other online transactions.

Chart 5She tends to ignore the noise of social media and online advertising and sticks to tried and trusted brands and products.

She will look at online reviews and recommendations and she is influenced by family and friends that will sometimes convince her to try something different.

Social style

Typically, professional networks like LinkedIn are important to this segment and they tend to log in at least 2-3 times a week.

They are also likely to log in to Facebook regularly to check photos and updates from family and friends. In terms of their own updates, they prefer using email rather than social media.

Shopping style

This segment tends to shop online for restocking staple household and personal care products. For bigger ticket items, these consumers prefer to bricks and mortar to online shopping so they can try out the product for themselves.

“DEAL HUNTERS”

Here, Derek is typical of this customer segment and spends the most time online compared with the other AOC segments. His purchase behaviour is motivated by online discounts, editorial reviews, recommendations from trusted friends and family.

Chart 6Although Derek is a loyal customer, he’s not given to writing reviews or becoming a vocal advocate of products that he may have purchased say on Amazon.

Social style

This consumer group are highly sociable and will have more than 500 Facebook friends but tend to be in ‘receive’ rather than ‘transmit’ mode and will infrequently post updates.

They are also consumers that tend to spend a large proportion of their online time privately such as downloading music to their smartphones and exchanging emails with family and friends.

Shopping style

This consumer segment are always looking for a bargain and could be much more spontaneous when they come across a deal for a product that they might not have set out to purchase in the first instance.

They appreciate value for money. They also tend to spend a lot of time gathering information and comparing prices before making a purchase decision.

When it comes to making a decision, they will visit the company website to further research the product. Beyond that, they don’t tend to be over-engaged with brands and branded content.

According to the researchers, there are several important lessons emerging from this study for brand owners.

Although it may appear counter-intuitive, the research suggests that AOC that use mobile devices and hang out online are less likely to connect with brands and businesses as their interaction is driven by social rather than e-commerce.

eshopperIn this permission based economy, marketers need to earn the right to connect with AOC segments and as the research shows, many such segments differ greatly in terms of their willingness to interact with brands and they have different reasons for doing so.

“Consumers use multiple paths to purchase along the consumer journey.

“Traditional brand-building efforts such as integrated marketing communications efforts are unlikely to be effective,” warns Erich Joachimsthaler.

In summary, collaboration, commerce and communications must converge in order to create a new paradigm for building strong brands with AOC segments.

 

Ardi Kolah is author of High Impact Marketing That Gets Results. Order your copy for a 30% discount

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