Wall Street analysts have cast doubt on the potential success of the iPad, marking down the stock after its high profile launch. The criticisms seem to center on its price of between $500 and $850. It is seen as simply too expensive for most consumers despite its obvious appeal. I think these analysts underestimate the sheer love customers have for all things Apple. They are probably right that the product is a few hundred dollars too much but I doubt that will prevent too many customers from buying. Just take a look on eBay at how much people are willing to pay for an unlocked iPhone and you’ll see that Apple has the ability to command a sizeable price premium. In other words logic is on the side of the analysts but consumers can be horribly illogical. Get ready for lines to appear at your local Apple store when the product actually arrives…
Big, global companies like to choose big, global agencies. There are good reasons for doing this. There’s consistency of approach, consistency of message and procurement gets to weigh in on contract terms. There’s also that comfort factor of using a ‘big firm’ that makes sure chief marketing or communications officers feel safe. But is bigger and more global really better? As someone who worked to build a global PR agency, I know that global can be great. I also know that many clients embrace global for the wrong reasons. I also know that many of the global agencies are far from connected and offer very little in terms of real value to their customers.
If bigger isn’t better then why don’t people use a network of agencies? Well of course some do and many of them get great results. But the choice is increasingly being made harder as social media and other forces change the way markets operate. Audiences are no longer defined by geographies so why should communications campaigns be? I recall some at Apple telling me that on iTunes they watch communities that are driven by what styles of music they like, not where they are from. This is the future of marketing as our tastes and needs become a function of what values we have and not which country we are from. This is in essence then a series of global communities, rather than a series of countries.
So, how many agencies are ready for that world? The answer is very few. The small local agencies are trapped by their geography and the larger firms are trapped by their business models. That said, building the ‘new global agency’ isn’t easy. The biggest hurdle is getting clients to agree to invest their PR spend on audiences/communities regardless of where these people live. This is tough when PR dollars are driven by local sales. The other challenge is doing the research to prove these communities really exist and are valuable. That is in itself non-trivial. In other words it is a brave client that shifts its spend away from geographies to communities. Until that happens, we are likely stuck with the existing model.
So what is global PR anyway? Well the truth is ‘global’ is often very un-global. I’ve yet to hear of global meaning every country in the world. I’ve yet to see a client that really lets ideas from anywhere in the world drive new campaigns. I’ve yet to see a client that really drives local implementation and measurement to be consistent. Global usually means about 10 big countries. It means a common template and font for plans and reports and it means some themes are shared. In other words global, for most, is really more regional at best. So if global really isn’t global, why again to clients like the idea? Because the idea is a great one and sounds so… smart. I’m not saying clients trying to make their PR global are stupid. I think many are well intentioned. However, I do believe that global is for the most part a myth. There are agencies that run global programs and do it really well, Text 100 and Bite for example (shameless plug). But I’d really encourage clients to think hard before pushing a global RFP. What they will likely end up with is a firm that is faceless and a series of campaigns that are bland and lack impact. Instead, I’d encourage them to think about the perception they want to build, who is key to that and the programs that will drive these people to embrace that perception. That may mean hiring a global firm or it may just mean hiring a really smart boutique that really gets it and doesn’t mind traveling.
As the terrible news unfolds about the earthquake in Haiti, companies are trying to figure out how they can help but also how they can get credit for helping. I’ve talked to several clients on this subject and they all raise the same challenge: how do we get credit for the help we give without it coming across as though we are only helping so that we get some positive press. The reality is of course that good companies won’t try and exploit a disaster to get attention. Good companies will do the right thing and if in doing the right thing people notice, then all well and good. I know that many PROs will be encouraged to try and get people to notice the good things being done to help the people of Haiti but I for one would prefer to all the effort go in to helping people rather than into publicity. Now if publicity in turn helps people by making more people give money or time then go get that publicity. In other words make your relief efforts genuine and not a thinly veiled advert for the company.
When Katrina struck, a poster child for good action was WalMart. They loaded trucks with basic goods and drove to the region. They didn’t send out a press release telling people. Truly good acts don’t go unnoticed. Sometimes it takes time for people to notice but notice they will and word of mouth will eventually make sure people find out. I’ve already noticed that major online brands such as Google, Amazon and eBay have links on their homepages so you can help the people in Haiti. Interestingly though I can’t find a major offline brand that has a similar link. There’s no good reason I can see for that. Follow Google’s link for example and it tells you how you can donate. It doesn’t tell you what Google is doing itself. There’s no reason why Ford, Bank Of America, Coca Cola, Next Fifteen or anyone else couldn’t do the same…
At the end of the day, good corporate social responsibility boils down to: Doing what’s right and doing what you can.
WPP finally gave up on Enfatico, the agency they set up solely to support Dell and have effectively folded it in to C&W. Enfatico joins a long list of single client agencies to fail. Why do these agencies fail when, on the surface at least, they offer such obvious benefits to a client? Before I get in to the reasons why they fail, let me first list the potential benefits of these firms:
1. These agencies can REALLY get to understand a client’s business
2. These agencies are not distracted by other clients or new business
3. These agencies can hire the team that best suits the client’s challenges
4. These agencies can easily run a single methodology across the globe
5. These agencies are easy to measure as there’s only one thing to build the measurement around
So with all these benefits why do they fail? Here are the reasons:
1. Staff who work at agencies don’t want to just work on one client forever so you are bound to get high turnover at all levels
2. One of the key advantages of agencies is that they get to bring fresh perspective and insight BECAUSE they work with multiple clients. In about a year sole client agencies become stale
3. Sole client agencies are essentially just an in-house team that has been outsourced. Why bother?
4. Sole client agencies only work if the budgets are huge. Otherwise you have staff on the account that are either underutilized or are forced to work on tasks they’re not ideally suited to, to fill their time.
I think it’s a shame these agencies don’t work as I can see the appeal and like to see innovation in our industry. So far though the cons always seem to outway the pros. Enfatico RIP.
I spent some time in the Palo Alto Apple store yesterday. My eldest daughter was playing with a raft of different products from laptops, to ipods and iphones and of course all the various accessories. Standing in the midst of the store I became aware of just how many products Apple is now selling and the list seems destined to grow. Now imagine the store as a metaphor for what the average consumer can associate with and you can easily see that as the product range expands their ability to maintain strong associations with products diminishes. Pretty soon Apple is meant to launch some kind of tablet which will take up yet more shelf or table space.
As someone that loves the quality of the Apple products and admires the brand, I worry that this ‘growth’ mentality could be a dangerous path. Some companies are able to run large product lines because their products are designed to reach different audience segments and we understand that as consumers. But Apple’s brand has been built around the idea that we all want all of their products and they’ve actually done a pretty good job of selling that brand. I for example have an iPod, iPhone, iMac, Apple TV and a MacBook Pro. I’ve also got countless Apple accessories and chargers. At some point though the list has to stop. As a consumer I don’t want yet more products. I want fewer that span the gamut. Apple in its recent incarnation (Steve 2.0) has done an amazing job of only launching products that are really needed. Few products seem to have struggled – the Apple TV and the Mac Air seem the notable exceptions, while the iMac iPod, iPhone and iTouch have been huge successes. If Steve was 100% well I wouldn’t raise these concerns. But we all know that Steve is not devoted to Apple in the way he was before his illness and that at some point he’ll take a huge step back. When that happens I worry that Apple will miss his iron grip on the company’s product strategy and that inferior products will be launched and Apple will be right back where it was before Steve returned.
Next time you are in an Apple store, try and imagine that they’ve launched four major new products and still have all the current product range. You will quickly start to wonder how they can fit everything in without making the stores much bigger. FYI rumors are rife that Apple is going to take a much bigger space in Palo Alto and open a new flagship store (click link). Does this suggest their solution to the product proliferation problem is simply to take on more space? I sincerely hope not.
Why should companies use PR agencies?
This may seem an obvious question, yet I’m amazed how often I hear it being asked. For as long as I can remember, which is sadly quite a long time, the main arguments have been (here come the bullet points):
- Agencies can provide external counsel – they will give you a perspective that you can’t see from within the company. How often clients are prepared to take this counsel varies and is a measure of a ‘good’ or ‘bad’ client.
- Agencies act for many clients and thus unearth opportunities that in-house staff wouldn’t. For example while talking to a reporter about a news story they can sell in another client who may offer another angle. Reporters like this as it saves them time and that’s why reporters often also like agencies.
- Agencies offer clients flexibility in terms of resources. This flexibility is not limited simply to the amount of people who can be thrown at a task but also the skill set. For example, clients don’t necessarily need certain areas of senior counsel every day, or even every week. Agencies give them access to the talent they need when they need it.
- Agencies bring new thinking to the mix. Agencies see the new ways PR is being practiced by virtue of the fact that they act for multiple clients. So when a new approach or idea gets tried for one client, others quickly benefit. Now of course some clients may not like to think their ideas are being used elsewhere but we all know even when an idea is re-used in PR it takes on a whole different look and feel.
- Agencies actually cost less. Well not always but they are rarely more expensive when compared to say having a large internal team at a big company. That said few companies seem to really make a sensible comparison here. The total cost of an agency needs to be compared with not only the salaries of staff you hire but all the other ancillary costs that come with having an in-house team such as the office space, HR and IT support, training etc etc.
Now of course there are advantages to being in-house also which is why the most successful PR campaigns tend to bring together a strong internal team with a good agency. Of course that’s not always an option, especially for a smaller company. At that level having a hungry, aggressive agency is always the way to go. Especially if you can find one that will fill your slides with bullet points ;).