DummySpit

One of the claims being made for new media is that it gives greater access for ordinary folks to express their views and debate politics. The current US election prologue is being put forward as the first real “Internet Election”, although this claim was made for the 2004 campaign.

In his ‘Read Me First’ column in the Guardian this week, Seth Finkelstein, takes a swipe at the limited access to citizens in the recent CNN YouTube debates with a column headed, New media is just another way to pull the same old tricks. Finkelstein argues that “new media bring new media manipulation and new media exploitation” and that the method of selecting YouTube postings by a gatekeeper was the same as “contests where the winner gets a cameo appearance on a TV show”.

He goes on criticise the process further with, “ss is typical of user-generated content, despite all the hype about empowering citizens, the individual is utterly powerless, except to try to please and serve the interests of the gatekeeper and thereby obtain some attention (but not remuneration).”

There is a raft of issues that arise from this critique: would the candidates have participated in an open-access debate where they didn’t know what issues were likely to be? That’s highly unlikely, although it might make edgy broadcasting. Would broadcasters, like CNN which staged this cross-media event, give up their control and their standards of presentation? Again, highly unlikely.

So Finkelstein’s hope that a true shift in power could have occurred was forlorn before the start of the process because the broadcaster as gatekeeper has too much to defend and he recognises this in his sign-off comment: “… we should never mistake a change in media style for any advance of citizens’ power in politics”.

New media has also brought unforeseen problems for two of the UK best known brands - Vodafone (mobule phones) and First Direct (online banking) which bought packages of online advertising space on Facebook and ended up on a page giving information about the far-right British National Party (BNP). As the Guardian reports, “the move may affect other advertisers on Facebook by highlighting a current lack of control over where the multimillion page network places their bookings”. The report highlights the problem that there is little control over where where advertisements appear.

Ironically, The Guardian’s online version of the report includes a Vodafone click-through advertisement across the top of the story (or it did when this blog was being written) which again shows the problems that advertisers have when seeking associative coverage of their organisation.

Perhaps these two instances of new media problems - lack of access to a range of voices and damaging associations - make a collateral case for well-researched, targeted public relations activity. The public relations practitioner as an intermediary can have a valuable and ethical role to play in promoting genuine debate.

After three months of discussion, the Study of the Priorities for Public Relations Research (PR Priorities Study - final report) has been completed. The initial piloting was undertaken on DummySpit in April and led to the setting of 26 public relations topics. These were sent to a Delphi study panel (of experts) in five continents covering top academics, leading practitioners and the CEOs of PR industry bodies. After three rounds of intensive email debate, the Top Ten PR research topics are:

1) Public relations’ role in contributing to strategic decision-making, strategy development and realisation, and organisational functioning

2) The value that public relations creates for organisations through building social capital, managing key relationships and realising organisational advantage

3) The measurement and evaluation of public relations, both offline and online

4) Public relations as a fundamental management function

5) Professional skills in public relations; analysis of the industry’s need for education

6) Research into standards of performance among PR professionals; the licensing of practitioners

7) Management of corporate reputation; measurement of reputation

Ethics in public relations

9) Integration of public relations with other communication functions; the scope of public relations practice; discipline boundaries

10) Management of relationships

Just outside the top ranked priorities are:

11) Client/employer understanding of public relations

12) The impact of technology on public relations practice and theory.

This report is the first completed international study on public relations research priorities (using a Delphi panel) since the mid-1990s and gives valuable insight into the ‘front and centre’ public relations research areas around the world.

The results will allow academics and practitioners to work closely together to improve understanding of public relations and its most effective and ethical use. It is a benchmark that all research plans and funding can be judged by for relevance and importance.

In research I have been undertaking, two of the topics were the management of reputation and the management of relationships. One of my respondents, a top corporate communications person in a multinational firm, responded with a very good question – “Who is the owner of the relationship: the PR professional or the business line?” Acknowledging one of the favoured models in public relations is “PR = relationship management” (Bruning & Ledingham), he has raised the very challenging question of how can this model be operationalised.

Although public relations academics and practitioners are staking out this ground as their own, the reality in the maze of relationships between an organisation and its stakeholders is that they may not be able to control or even substantially influence this field. For example, they could do so in the relationships between the organisation and government and with communities in general but it is almost impossible to “manage” the relationship between a sales force and its customers, purchasing staff and suppliers, and the Chief Financial Officer and bankers. These are crucial relationships to the performance of the organisation and are “owned” by those who are responsible for, in this case, sales, purchasing and finance. 

In a recent Harvard Business Review* paper on reputational risk, Eccles, Newquist and Schatz propose that one person is put in charge of reputation in each organisation. Although 84% of respondents to an Economist Intelligence Unit survey in 2005 said it is the CEO’s job, the authors say, “the CEO does not have time to manage the ongoing process of coordinating all the activities that affect operational risk [including reputational risk]” (p.110).  

This person will be responsible for “assessing reputation, evaluating reality, identifying and closing gaps, and monitoring changing beliefs and expectations” (p.114). For this task, they suggest the COO, CFO or those with responsibility for risk management, strategic planning or internal audit as “they have the credibility and control some of the necessary resources to do the job” (p.114).

But what of the claims of PR/corporate communication people? “In general, those whose existing responsibilities pose potential conflicts probably shouldn’t be chosen. People holding top “spin” jobs such as the heads of marketing and corporate communications, fall into this category” (p.114). 

What strange logic. Why would the COO, CFO and functional managers not have “conflicts” which affect their bonuses and position within the organisation or their ability to take an objective view? As the heads of marketing and, especially, corporate communications are in contact with the widest range of stakeholders unlike the inward-facing senior management staff, surely they are best suited to the task of monitoring reputation and coordinating responses. They usually have a greater set of research skills than operations and financial senior management, too. 

What’s your view on this model of the single person to monitor and manage reputation and organisational relationships? Can it be operationalised or is it a coordination task? If it isn’t the CEO, then who should be responsible? 

* Eccles, RG, Newquist, SC and Schatz, R (2007) Reputation and its risks, Harvard Business Review, February, pp104-114

It’s a ‘received wisdom’ that a good reputation aids the financial performance of an organisation. We call it the “doing good will lead to good” notion. An Australian study of major banks has, however, found that there was no causal relationship between corporate reputation and financial performance (in either direction), contrary to studies in other countries. 

The case put forward by Robert Inglis and fellow researchers at RMIT University, Melbourne was based on comparison between two major banks, Westpac and NAB. According to a reputation index, RepuTex, Westpac was the leading company in the national banking sector in 2003 and 2004. Westpac, however, was losing market share in deposits and home loans to competitors. 

“If consumer decisions were made on reputation, it would not be unreasonable to expect Westpac to have the dominant market share and the others to trail behind. The fact that Westpac was not dominant in the market suggests that factors other than reputation may be taken into account by consumers when their decisions are made and/or that Westpac has not exploited its reputation advantage.” (p.942) 

They also said that NAB, which previously had a high reputation for corporate governance, suffered financial losses of $A360 million and replaced CEO and chairman when fraud was discovered in its currency trading operation in early 2004. On the other hand, within six months of the fraud revelation and subsequent corporate upheaval, it was recording strong growth in business lending and led in market share.  

“In the NAB case there is seen a company that had a lower reputation than its close counterpart in the same industry, Westpac, yet was achieving a higher performance.” (p.943) Inglis and his co-authors commented that reputation indices are also no predictors of company performance as shown by NAB’s high reputation for corporate governance that was undone by internal system failures. 

Inglis, R., Morley, C. and Smut, P. (2006) Corporate reputation and organisational performance: an Australian study. Management Auditing Journal. 21 (9), pp. 394-947

David Phillips kindly sent me a posting on the role of ROI in Marketing from Brian Carroll’s B2B Lead Generation Blog -  http://blog.startwithalead.com/weblog/2007/05/the_difference_.html - which discusses the difference between ROI and marketing accountability. As this is an issue in public relations, I have posted this comment:

Part of the problem with ROI is that a financial concept is applied to a non-financial activity. Sure, marketing and sales activity should result in financial results but the misuse of specific business language in an effort to get understanding from the Board is only piling pressure on marketers and communicators.

One of the definitions of ROI is the ratio of how much profit or cost saving is realised from an activity against its actual cost, expressed as a percentage. In reality few marketing or communication programmes can be expressed in that way because of the problems in putting a credible financial value to the results achieved. In 2004, the UK’s Institute of Public Relations said, “this (use of ROI in PR campaign) is not only confusing but misleading” when the term PR ROI is used loosely. Unless the objectives of the activity are solely to achieve a sales or financial outcome, ROI is meaningless.

For marketers, the application of ROI limits their role to sales support and ignores the brand and reputational issues. In PR, I’ve long argued that the use of business language is a fundamental sign of insecurity and a lack of confidence. It seems that marketing has the same affliction.

To read more on my views on the role of ROI in public relations, see this article on the PRism online academic journal,  http://praxis.massey.ac.nz/fileadmin/Praxis/Files/Journal_Files/Issue3/Watson.pdf

The latest announcement from Cision, the owner of the Delahaye Index, says that Microsoft has the “best reputation in the media” based on (according to the Cision press release of May 7) “a score of how many positive and negative reputation driving attributes are found within each story”.

It goes on to breathlessly to say that Cisco Systems ranks second because of “high profile coverage derived from Cisco’s negotiations with Apple over the name of the iPhone” and acquisitions. Following on is General Motors which has roared up to the top three having been “ranked in last place” a year ago.

Dummyspit isn’t quibbling over who is first, second, third or tenth. That’s irrelevant although league tables are a much-used tactic for creating media coverage. Our question is over the misuse of the term, ‘reputation’ and the claim by Cision North America’s CEO Steve Newman that “corporate reputation is uniquely measurable through the media, as news affects and reflects public sentiment.”

That’s wrong. A generation of study has suggested that media may have agenda setting properties but it doesn’t necessarily shift public sentiment. And it won’t always reflect public opinion. That’s wishful thinking by PR practitioners and service providers and is a classic example of the substitution game – where output is confused with outcome.

Reputation, as this blog has said before, is given to organisation by those with whom it is engaged. The media is just one of those stakeholders. It can reflect a positive or negative sympathy towards an organisation and there’s no doubt that media analysis can judge tone and favourability. This factor (sympathy, tone or favourability) is an affective component but leaves out the cognitive element. It is thus worth noting the comments of Prof David Dozier, one of the gurus of public relations research, who commented that reputation may be based on direct experiences as well as on processed messages. (Dozier 1993: 230)

Some examples of corporate behaviour are a joy to bloggers. The latest example is the famed advertising and marcoms group Saatchi & Saatchi’s creation of a girl band called ‘Honeyshot’. As reported in The Guardian (UK) recently, it had the explicit role of “a vessel for covertly advertising products to music fans”.

At the beginning of April, Honeyshot’s first single ‘Style, Attract, Shock’ was sent out to DJs but without notifying them that it had been created by a subsidiary of the ad agency and that its title was the new slogan for a hair gel called Shockwave.

It was quickly rumbled by the BBC, whose Radio 1 is the top audience pop and rock music station in the UK, and banned from playlists. But not without being played. This may have been an outcome that got coverage for the brand, which has been mentioned for reasons of explaining the story in the previous paragraph. And probably someone has already told the brand’s owner that this furore was worth some absurd figure in advertising value equivalent.

Peter Robinson, who broke the story, makes two cogent points – “From Saatchi & Saatchi’s point of view, it (the record) betrays a stunning level of deception – which is going some, in the ad industry” and “… it is important that the Honeyshot project fails, which it has, unless the whole thing was a double bluff aimed solely at securing Shockwave’s column inches to promote the company’s penchant for insulting their customers’ intelligence.”

Will brands, their owners and advisers ever learn that honesty and authenticity are integral to their reputation?

Recently, Weber Shandwick Worldwide (WSW) announced its latest research on reputation loss with the claim that “CEOs receive nearly 60% of the blame when company reputation is damaged”. That seemed to be a useful enough “wow” factor to headline the report and support the marketing of WSW’s reputation management consultancy services. And to make it stronger, there seemed to be almost exactly the same blame quotient whether the respondents were in North America, Europe or Asia which appears to be a strong intercultural trend.

But when you read further, questions about the validity of the research arise. The sample was 950 “global business executives” in 11 countries, which seems solid enough, but it’s not bizexecs who determine an organisation’s reputation, it’s all those “stakeholders” with whom an organisation has relationships. To quote from Charles Fombrun, who is well known to WSW, “better regarded companies build their reputations by developing practices which integrate social and economic considerations into their competitive strategies … They initiate policies that reflect their core values; that consider the joint welfare of investors, customers and employees; that invoke concern for local communities …” (Fombrun 1996, p.8). This approach to reputation management says that the organisation’s reputation is dependent on its behaviour as a corporate citizen, part of the societies in which it operates, and not above or apart from them.

So if WSW had polled 950 ordinary folks in 11 countries, it may have come closer to a realistic figure of blame on CEOs. It’s also worth noting that research by Prof Philip Kitchen of Hull Business School and Andrew Laurence of Hill & Knowlton found in 2003 that the percentage of an organisation’s reputation ascribed to the CEO in different countries was much more varable. In Belgium, it was only 26% but in Italy, it was 83%. Leaving Italy out of the data, the average for five other European countries was 36.2%. In North America, Canadians gave 66% credit to the CEO and the US, 54%. There’s no doubt that in a celebrity conscious world, CEOs are front and central on reputation issues because they are leaders but it is the range of stakeholders who give the organisation its reputation as a result of their engagement with it, not the CEO.

In the WSW research, the response that “online attacks or rumours” was only a 25% factor that can ’significantly damage reputation’ demonstrates either complacency among the bizexecs or misunderstanding of the role that online media and social media can play. WSW comments in a very controlled manner that “companies continue to overlook how damaging threats from online activists and pressure groups can be if they are not prepared to respond quickly and decisively”. The 75% who don’t engage with the online world had better wake up soon!