A story broke in the PR trades this week that much criticized insurance giant, AIG, had decided that public relations was a better way to spend it’s money considering its current position of being between a rock and a hard place...
NEW YORK: Embattled insurance company, American International Group (AIG), has retained Burson-Marsteller for PR services. In doing so, it suspended corporate advertising and other paid outreach efforts to offset the cost, PRWeek has learned. Earlier this month, Bloomberg quoted an e-mail between AIG spokesman Nicholas Ashooh and George Sard, CEO of Sard Verbinnen, discussing the possibility of placing ads to explain why AIG was planning a company conference at a California Ritz-Carlton resort.
The New York Post estimated the amount to be paid to Burson-Marsteller at between $100,000 and $200,000 per month. Those are our tax dollars, friend. But blessed be the wise, the company was doing so because it was feeling under a little pressure because of the recent criticisms…
“To spend the taxpayer's money on an expensive ad campaign to apologize for how you used taxpayer money leaves you open to further attacks,” Bloomberg quoted from Sard's e-mail. In September, the Federal Reserve loaned AIG $85 billion; the company received an additional $37.8 billion earlier this month. Some members of Congress had criticized an AIG event that took place after the company received government help. Most recently, AIG was criticized for steep executive payouts , but the company announced on October 22 that the payouts, which included $19 million to its former chief executive Martin Sullivan, were suspended. And last week, AIG agreed to suspend all junkets and perks not justified by legitimate business needs.
An associate of mine here at INK inc. determined that this new PR “defensive” works out to approximately $10,000 per work day…$1,250 per hour. Nice work if you can get it. Even by any of the giant monolithic PR firms’ compensation standards, that’s a healthy hourly fee. Having worked for several of these large firms during my 37-year career, including the recipient of this particular largeness, one can assume that chances are high that the majority of the fee will go against the writing and disseminating of self-serving press releases as a “response to the high volume of requests for information from the media, etc.” Not exactly what I would call a great trade-off for the millions in advertising dollars they were spending on the same message. A press release has little more credibility than an expensive wordy ad unless the news media buys into it. And the likelihood of responsible journalists, who also happen to be taxpayers, doing that is zero to none.
Hey AIG, I have a wild and perhaps even blasphemous suggestion coming from a life-long PR professional… and it won’t cost you a dime. Just cool it for a while, and get back to work for your millions of customers first and your shareholders second. Show some common sense, restraint…and honesty in your dealings with the American public and the news media…not more wasteful spending of our tax dollars on PR consultants.
Sunday, October 26, 2008
Sunday, October 19, 2008
Chicken Little never had it so good.
Is it over? Is Armageddon finally upon us? Is the ‘free ride’ that so many of the media pundits describe as the last ten to fifteen years screeching to halt, and from here on we’re all going to have to pay for our indulgences, and pay big time? Jim Cramer, that great prognosticator of financial wisdom and wannabe business TV-star, has been all over the financial media this last week touting his doom and gloom “sell” scenario…and of course, his own shaman-like power of warning of the market downturn. And Cramer unfortunately, is not alone. Chicken Little himself would be crushed as road kill as all of those that were first to lead the charge into the irresponsible behavior now turn backward in their clarion call of retreat.
Where Mr. Cramer and his new doom and gloom buddies and I disagree is…”what free ride?” Maybe the pendulum will swing dramatically for those that were actually sitting very high in stock ownership, compensation and lifestyle over the last fifteen years, manipulating their finances like a game of cards. But for the vast majority of Americans, the rest of us that were working and not hedge betting for a living, there has been no ‘free ride.’ (No, I’m not referring to the mythical “Main Street” versus “Wall Street” misnomers of the political campaigns.) We’ve been paying our bills, paying our taxes, letting our 401-K’s ride, and not buying a second or third home as a quick rollover investment. Yes, we’ve taken some equity out of our homes to handle an emergency or tuition increase, or even some improvements…. and, we’ve probably bought a thing or two foolishly now and then.
None of which I call a free ride. More importantly, we’re used to sucking it in and tightening up periodically…even over the last fifteen years. As an independent PR firm we’ve seen budgets dwindle and client losses more than once. But we continued to serve our existing clients because more than anything they needed it then more than ever, even while we were laying off employees, and skipping paychecks. But we didn’t panic. We didn’t cash in 401-K’s, sell stocks, or switch banks. We managed. We worked. We survived. We grew.
Some might call it the “glad game” (from those of you that remember “Pollyanna.”) Some like Mr. Cramer might even call it foolish. But I’ve never understood how negativity and panic produced anything other than more negativity and panic. Here’s a drastic suggestion from someone in the PR business…maybe it’s time to turn off the news and count the things we have to be ‘glad about.’
Where Mr. Cramer and his new doom and gloom buddies and I disagree is…”what free ride?” Maybe the pendulum will swing dramatically for those that were actually sitting very high in stock ownership, compensation and lifestyle over the last fifteen years, manipulating their finances like a game of cards. But for the vast majority of Americans, the rest of us that were working and not hedge betting for a living, there has been no ‘free ride.’ (No, I’m not referring to the mythical “Main Street” versus “Wall Street” misnomers of the political campaigns.) We’ve been paying our bills, paying our taxes, letting our 401-K’s ride, and not buying a second or third home as a quick rollover investment. Yes, we’ve taken some equity out of our homes to handle an emergency or tuition increase, or even some improvements…. and, we’ve probably bought a thing or two foolishly now and then.
None of which I call a free ride. More importantly, we’re used to sucking it in and tightening up periodically…even over the last fifteen years. As an independent PR firm we’ve seen budgets dwindle and client losses more than once. But we continued to serve our existing clients because more than anything they needed it then more than ever, even while we were laying off employees, and skipping paychecks. But we didn’t panic. We didn’t cash in 401-K’s, sell stocks, or switch banks. We managed. We worked. We survived. We grew.
Some might call it the “glad game” (from those of you that remember “Pollyanna.”) Some like Mr. Cramer might even call it foolish. But I’ve never understood how negativity and panic produced anything other than more negativity and panic. Here’s a drastic suggestion from someone in the PR business…maybe it’s time to turn off the news and count the things we have to be ‘glad about.’
Sunday, October 12, 2008
We’ve lost our ‘why’ in a perfect storm.
So, what are we to make of this last thirty-day news cycle? The American people (indeed the world, considering the impact of both our economy and politics on everything global) are under media assault from the worst economic crisis in three-quarters of a century; and a presidential election that becomes more tumultuous and surreal almost by the hour. And that, more than anything, is what is driving this relentless barrage of changing news stories…the fact that both these stories have no staticticity. They are constantly evolving and changing shape, almost on an hourly basis. It’s a freefall news cycle. There is no time for deep analysis. No time for ‘why’…just ’what.’ We the consumers, the savers, the investors, the makers and the doers, and the voters, let alone the pundits and serious journalists, are left to watch with concern and even fright from the sidelines without the benefit of understanding. And without understanding, there is no sense of control. And without any sense of control, there is panic. Which then, ironically, becomes the third story of this news cycle…but still with more ‘what’ and very little ‘why.’
Something else is contributing to this news cycle of vertigo, the multiplicity and competitiveness of the modern media world itself. This is probably the greatest irony of all. There is no shelter any more from the news…that is, being told ‘what’ is going on and even opinions about the ‘what.’ While the printed page may be shrinking and even disappearing at times in this technology-based world, media sources have vastly expanded through broadcast outlets, the Internet, and now Web 2.0 social networks by the thousands. The choices have become infinite. The noise has become deafening. The competitive “gotcha” factor all-pervasive. It’s often who is first to tell the ‘what’ and not whether is been verified or not. The average connected citizen is bombarded with hundreds of reporting’s (true and untrue) and millions of opinions from all directions.
Thus, a perfect storm of an unpredicted and unprecedented news cycle of ever-tumultuous economics, politics, and panic…coupled with a multitude of sources of quickly assembled information, is hovering over us. The result is really frightening with a whole lot of ‘what’ and not much ‘why’ to give us comfort as the sky darkens.
However, being the optimist I am as well as old enough to know that news cycles are just that, cyclical, I recognize this time will indeed pass. And while we cannot necessarily alter events out of our immediate control, we can work toward better and more accurate, in-depth communications even as we expand our means of communicating. Sometimes less can be more; and less ‘what’ and more ‘why’ and even ‘why not’ can ease our journey through a crazed news cycle reporting on a crazed time.
Something else is contributing to this news cycle of vertigo, the multiplicity and competitiveness of the modern media world itself. This is probably the greatest irony of all. There is no shelter any more from the news…that is, being told ‘what’ is going on and even opinions about the ‘what.’ While the printed page may be shrinking and even disappearing at times in this technology-based world, media sources have vastly expanded through broadcast outlets, the Internet, and now Web 2.0 social networks by the thousands. The choices have become infinite. The noise has become deafening. The competitive “gotcha” factor all-pervasive. It’s often who is first to tell the ‘what’ and not whether is been verified or not. The average connected citizen is bombarded with hundreds of reporting’s (true and untrue) and millions of opinions from all directions.
Thus, a perfect storm of an unpredicted and unprecedented news cycle of ever-tumultuous economics, politics, and panic…coupled with a multitude of sources of quickly assembled information, is hovering over us. The result is really frightening with a whole lot of ‘what’ and not much ‘why’ to give us comfort as the sky darkens.
However, being the optimist I am as well as old enough to know that news cycles are just that, cyclical, I recognize this time will indeed pass. And while we cannot necessarily alter events out of our immediate control, we can work toward better and more accurate, in-depth communications even as we expand our means of communicating. Sometimes less can be more; and less ‘what’ and more ‘why’ and even ‘why not’ can ease our journey through a crazed news cycle reporting on a crazed time.
Sunday, October 5, 2008
Back to basics: how a financial crisis is good for business
I love recessions. They bring out the absolute best and worst in people and in business. When the economy slows, which invariably does after we have had a delightful run of greed on both Wall Street and Main Street…old terms with new political meanings we will explore in more depth in a later blog…life becomes much simpler. The choices become much more clear, and the consequences of those choices, much stricter. Marketing and PR budgets become leaner and decisions therein must demonstrate value and accountability. Wow! Really?…amazing concepts that have traditionally received plenty of lip service but little action at the height of a burgeoning economy; but now, oh my, are the cornerstones of every recessionary decision. And just how do companies and organizations define and measure value and accountability; and do these definitions change depending on the prevailing economic wind? While of course never overtly stated, they often do. Marketing and PR dollars spent against internal research and audits, strategic positioning, message development, et al, are highest during flush times. They provide an excellent way to spend money and reinforce the importance, the very value, of the synergy between bloated internal PR departments and bloated PR agencies…the very reason for their mutually dependent existence. Alas, with tough times and the shrinking of budgets, value turns more to accountability (not synergy nor size) and metrics not abstract concepts.
It’s almost a cliché that during an economic downturn, we return to those simple, most basic, tested vehicles of commerce. Flat-rate mortgages, not ARM’s, more cash, less credit, personal relationships, not virtual reality, and in the world of PR, positive publicity, not another meeting, lunch, or audit. What a concept…real measurable results against predetermined goals. But what if you went one step further and created a compensation model based on only being paid if this positive publicity actually appeared…not just that it is “in process” or an interview had been completed, but actually had been broadcast or published? Now we’ve really returned to a simple, most basic tenet of commerce…being paid for actually accomplishing a measurable result. Wow…now we’re edging close to revolutionary. But if paying for results-only PR catches on, what’s to happen to all those bloated internal PR departments and bloated PR agencies? Not to worry. Although it would benefit us all if they went the way of the subprime mortgage, unfortunately like these real estate derivatives, bloated PR will rise again like the cycle of greed that fosters it.
It’s almost a cliché that during an economic downturn, we return to those simple, most basic, tested vehicles of commerce. Flat-rate mortgages, not ARM’s, more cash, less credit, personal relationships, not virtual reality, and in the world of PR, positive publicity, not another meeting, lunch, or audit. What a concept…real measurable results against predetermined goals. But what if you went one step further and created a compensation model based on only being paid if this positive publicity actually appeared…not just that it is “in process” or an interview had been completed, but actually had been broadcast or published? Now we’ve really returned to a simple, most basic tenet of commerce…being paid for actually accomplishing a measurable result. Wow…now we’re edging close to revolutionary. But if paying for results-only PR catches on, what’s to happen to all those bloated internal PR departments and bloated PR agencies? Not to worry. Although it would benefit us all if they went the way of the subprime mortgage, unfortunately like these real estate derivatives, bloated PR will rise again like the cycle of greed that fosters it.
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