. The Transom .

Sunday, April 23, 2006

Companies should pay more attention to conflicts of interest

The Wall Street Journal reported this weekend that Goldman Sachs Group has come under fire recently (and been fired) for their multiple conflicts of interest. How can they give advice in your interest if their corporate investments are in the interest of your rivals? It's no small secret that Goldman Sachs can make more money by 'playing the field,' which is why they risk walking the line of smart companies relieving them of their duties when these conflicts occur.

The same is true when hiring a communications agency. If you are Coca-Cola and hire me to market your product or company, would you feel secure if I also represented Pepsi? I highly doubt it.

Companies today want to hire firms with experience in their field, but not current experience. And that's the catch. Too many communications firms represent competing companies or interests. Why? They are either specialty shops or they have amassed so much experience in one industry they feel it would be a waste not to use it. And that leads to my problem with niche firms. It simply creates conflicts of interest and limits that firms growth. I believe that to best serve our clients, communications professionals have to be very well versed in multiple industries and disciplines. It brings outside of the box thinking and different perspectives to each program. It's healthy for the strategy.

Be warned of the agency that tries to tell you it won't be a conflict because a different team will be working on each account. If push ever came to shove, the client with the biggest budget will win.

Anheuser-Busch loses the battle to win the war

As the official beer sponsor of the 2006 World Cup, Anheuser-Busch has the right to serve their brands exclusively in every German stadium hosting a game. Yet A-B decided it would be best to let their German rival, Bitburger, share pouring rights in the stadiums. Why would they allow their largest German competitor, which Germans greatly prefer over Budweiser, to compete?

Because A-B sees the forest through the trees.

A-B made the decision that their sponsorship of the World Cup was more about getting their brand in front of the nearly 1 billion people watching the event on television than forcing half a million German fans to drink their beer and create serious negative feelings toward Bud. By giving the local fans a choice, the are extending a most rare olive branch in an era of corporate egos the size of their ad budgets. German fans were happy and relieved when they heard the news. Most said they would at least try the US beer. This is a big win for Budweiser and a very shrewd business decision.

A-B also realizes that the World Cup is a much bigger deal than the World Series or Super Bowl combined. In response, they are spending more on marketing at the World Cup than either US event. Foreign sales of Bud account for roughly 14% of revenues, but it's a growing and highly profitable business. By sponsoring the World Cup, A-B is hoping fans around the world will think of A-B products when they think of soccer (or futbol, as it's known everywhere other than the States.)

Whether or not the millions of dollars A-B is spending on advertising will pay dividends for the company remains to be seen. However, given their situation in Germany, they showed a textbook response to a potentially negative situation. Here's to A-B's courage.

Wednesday, April 19, 2006

What's in a name? Not much.

In Missouri, there is a pro-marijuana Libertarian named Chief Wana Dubie running for a seat in the 150th House District. That's what will actually be on the ballot thanks to a crack in the system. Mr. Dubie isn't the first candidate to try and manipulate the ballot naming practice. Chicago has seen Les "Cut the Taxes" Golden and Stephanie "Vs. the Machine" Sailor, both who essentially made their platforms their middle names.

That people would go to such lengths to draw attention to themselves is a little crazy, but historically what we see is that their efforts aren't successful. And from this example we are reminded of a classic business rule: actions speak louder than words.

Too many companies fail to realize that it isn't what you say, it's what you do. Too many companies have a knee-jerk reaction to hire PR firms to salvage their reputation without making the commitment to change the way they behave. Any PR firm worth its salt will walk away from that deal because they have been set up for failure. All the spin in the world can't save a company whose actions conflict with their words.

Take Merck for example. Merck used to be known as a caring, pro-safety pharmaceutical company. Where are they now? In denial. Vioxx has been painted as the next cyanide. And what does Merck do? They run an advertising campaign touting how committed they are to safety and how Vioxx isn't bad. Are you kidding me?

Companies or campaigns today can't rely on customers, voters or investors to blindly accept what they hear or read. The truth is available and they will find it. With the amount of competition and choices that consumers have today, companies are forced to walk the line or face a long, costly and difficult road of reputation recovery.

Monday, April 17, 2006

Katie Couric gets her own blog. Now someone explain to her what that means...

That's not a cheap shot at Katie Couric. Far from it. That's a reference to her self-described 'low-tech' approach to the Internet. It was revealed today that Katie will have a 'daily presence' on cbsnews.com writing her own blog. She has, of course, contributed to blogs before, such as during the Winter Olympics, but never before has she had the pressure of producing behind the scenes views to her stories.

Why has CBS made the push for Katie Online? Easy... that's where the viewers are.

Report after report shows that more and more people get their news online. CBS thinks they can pull younger viewers into the Evening News fold by getting Katie front and center in the digital world. Will it work? Maybe. Katie had a loyal following of Today Show viewers that I'm not sure will translate to online readers. This is in no doubt a response to daily blogs by Brian Williams and Elizabeth Vargas of NBC and ABC, respectively.

The real test will come when we get to hear Katie the Thinker give us her in-depth analysis of the stories she covers. Unlike reading from a teleprompter or notes, she will have a chance to frame her thoughts and connect with readers on a more personal level. Whether or not she can deliver is yet to be seen.

Should your company be headquartered online?

Clients often ask me if they should have a greater Web presence. The answer is simple: YES! Regardless of your business, regardless of your customers, the world is turning to the Internet for news and information. Look at what is happening to libraries. Do people roam the aisles to perform their research? No. They go online. Where do investors go for information? The Internet.


If information is power, then information delivered faster and smarter must be unlimited power. We live in a transparent world with unlimited access and an unquenchable thirst for information. We have iPods, DVR and RSS feeds all so we can have all the information we want exactly when we want it. You didn't hear about Katie Couric and her new blog? It posted 12 minutes ago. Haven't you been paying attention?

Here's the catch. As more and more companies go online in the fight for customers, investors and partners, one constant remains the same. If you are delivering a message that is received in a way unlike that which you sent, you have wasted your time and potentially made things worse. Being online is just the beginning. Communicating something meaningful that inspires your audience to act is the real measuring stick. Did you move the needle or did you just go through the motions?