Wednesday, May 7. 2008
In this week's PRWeek - 2/5/08 - I was asked to supply a few words for their Financial Essays supplement, so for those of you who haven't got round to opening your copy, or have already had it stolen off your desk, here's my contribution - enjoy . . .
Power of the personal touch
What is the defining image of the Northern Rock crisis? Is it of a chief executive in calm control, clearly articulating a recovery strategy to camera? Or is it rather one of long queues of twitchy customers, snaking out of branch doors and down high streets, united in fear and concern about their savings and investments?
Without question it is the latter. The clarity of these pictures in our collective memory speaks volumes for the power of television coverage. The broadcast media went to town on the story and in the absence of a compelling response from Northern Rock, confidence in the bank was undoubtedly eroded far faster and further than would otherwise have been the case as news broke of its emergency loan from the Bank of England and criticism swelled relating to its high-risk expansion.
In Northern Rock’s case, a more focused broadcast PR strategy would not have averted the crisis but it may well have limited the damage. Of course corporations still need to communicate business stories to traditional outlets such as the Financial Times but in our age of 24/7 rolling broadcast news coverage and online video, other channels are equally effective at reaching investors and other key stakeholders.
Yet despite the capacity to deliver succinct messages backed up by strong visuals, all too often a broadcast media strategy is overlooked. Some research commissioned by markettiers4dc in 2007 found that just 3.4 per cent of companies use television to publicise their interim and annual results.
That’s a shocking finding when you consider that TV and the web – with its capability for streaming video – play such a significant part in a typical person’s daily media consumption. Investor Relations is no longer just about a few key individuals. Organisations must now be aware of how broadcast material can impact upon public confidence.
While Northern Rock foundered, US toy giant Mattel last year provided an object lesson in how to handle a crisis adroitly. Confidence in the corporation might have plummeted following a series of product recalls after safety concerns were raised about toys from Chinese suppliers.
However, Mattel tackled the adverse publicity head-on and a key part of its response was a video message from chairman and CEO Bob Eckert, carried on its website. Eckert apologised for the recalls, set out lucidly how Mattel had immediately tightened up its safety procedures and empathised with worried parents by pointing out that he was himself the father of four children. Clips from the video appeared on mainstream TV news bulletins and were spread virally across the internet.
The crisis hit profits but Mattel’s approach allowed it to see out the year in reasonably good shape. Despite being saddled with charges of approximately US $110 million related to the product recalls, Mattel achieved a minor lift in operating income for its 2007 financial year and a worldwide 6 per cent rise in net sales against 2006.
Using video messages and TV interviews can contribute strongly to bolstering corporate reputation and propping up a company’s share price. But clearly live TV interviews are more perilous than pre-recorded statements and many corporate comms teams will advise their CEOs against participating in them for fear that they will make a mistake or appear flustered, thereby undermining confidence in a brand or organisation.
Yet it is those chief executives able to perform well in front of the camera and who understand the TV medium that will prosper. For example, Sir Richard Branson is known to one and all, thanks in part to his willingness to appear before the cameras – in both good times and crises. Few CEOs can match Branson’s appetite for self-promotion but those that are prepared to engage with the broadcast media will enhance the profile of their company and arguably their own personal job security.
One current example of a company adopting such a positive approach is National Grid. Chief Executive, Steve Holliday announced National Grid is to adopt carbon budgets and reduce its greenhouse gas emissions by 80%. Working alongside their retained corporate agency to drive awareness of National Grid’s pioneering stance on energy saving, markettiers4dc produced and released controlled audio and video news features of the Chief Executive to targeted broadcast media.
Of course, for the viewing public ‘live’ interviews are not necessarily watched in real time. As exemplified by technologies such as the BBC’s iPlayer, on demand viewing and listening is becoming more significant in media consumption. Rajar research earlier this year found that 4.3m people in the UK have downloaded a podcast, with 1.87m people listening to podcast once a week; while Motoral research last year found that 43 per cent of UK broadband users watch webTV.
Consequently, producing engaging video content that will work well on the web is assuming increasing importance. Video content can draw stakeholders onto corporate websites, allowing corporations to tell their side of the story eloquently. Moreover, it can provide influential input into wider debates raging across the blogosphere and social networking sites.
Businesses ignore such voices at their peril. HSBC, you may recall, was forced into a U-turn on its decision to scrap an interest free overdraft for graduates after nearly 5,000 graduates signed up to Facebook group Stop the Great HSBC Graduate Rip-Off. In this era of consumer power and investor activism, corporations cannot hope to flourish if they ignore effective communications channels and techniques.
Power of the personal touch
What is the defining image of the Northern Rock crisis? Is it of a chief executive in calm control, clearly articulating a recovery strategy to camera? Or is it rather one of long queues of twitchy customers, snaking out of branch doors and down high streets, united in fear and concern about their savings and investments?
Without question it is the latter. The clarity of these pictures in our collective memory speaks volumes for the power of television coverage. The broadcast media went to town on the story and in the absence of a compelling response from Northern Rock, confidence in the bank was undoubtedly eroded far faster and further than would otherwise have been the case as news broke of its emergency loan from the Bank of England and criticism swelled relating to its high-risk expansion.
In Northern Rock’s case, a more focused broadcast PR strategy would not have averted the crisis but it may well have limited the damage. Of course corporations still need to communicate business stories to traditional outlets such as the Financial Times but in our age of 24/7 rolling broadcast news coverage and online video, other channels are equally effective at reaching investors and other key stakeholders.
Yet despite the capacity to deliver succinct messages backed up by strong visuals, all too often a broadcast media strategy is overlooked. Some research commissioned by markettiers4dc in 2007 found that just 3.4 per cent of companies use television to publicise their interim and annual results.
That’s a shocking finding when you consider that TV and the web – with its capability for streaming video – play such a significant part in a typical person’s daily media consumption. Investor Relations is no longer just about a few key individuals. Organisations must now be aware of how broadcast material can impact upon public confidence.
While Northern Rock foundered, US toy giant Mattel last year provided an object lesson in how to handle a crisis adroitly. Confidence in the corporation might have plummeted following a series of product recalls after safety concerns were raised about toys from Chinese suppliers.
However, Mattel tackled the adverse publicity head-on and a key part of its response was a video message from chairman and CEO Bob Eckert, carried on its website. Eckert apologised for the recalls, set out lucidly how Mattel had immediately tightened up its safety procedures and empathised with worried parents by pointing out that he was himself the father of four children. Clips from the video appeared on mainstream TV news bulletins and were spread virally across the internet.
The crisis hit profits but Mattel’s approach allowed it to see out the year in reasonably good shape. Despite being saddled with charges of approximately US $110 million related to the product recalls, Mattel achieved a minor lift in operating income for its 2007 financial year and a worldwide 6 per cent rise in net sales against 2006.
Using video messages and TV interviews can contribute strongly to bolstering corporate reputation and propping up a company’s share price. But clearly live TV interviews are more perilous than pre-recorded statements and many corporate comms teams will advise their CEOs against participating in them for fear that they will make a mistake or appear flustered, thereby undermining confidence in a brand or organisation.
Yet it is those chief executives able to perform well in front of the camera and who understand the TV medium that will prosper. For example, Sir Richard Branson is known to one and all, thanks in part to his willingness to appear before the cameras – in both good times and crises. Few CEOs can match Branson’s appetite for self-promotion but those that are prepared to engage with the broadcast media will enhance the profile of their company and arguably their own personal job security.
One current example of a company adopting such a positive approach is National Grid. Chief Executive, Steve Holliday announced National Grid is to adopt carbon budgets and reduce its greenhouse gas emissions by 80%. Working alongside their retained corporate agency to drive awareness of National Grid’s pioneering stance on energy saving, markettiers4dc produced and released controlled audio and video news features of the Chief Executive to targeted broadcast media.
Of course, for the viewing public ‘live’ interviews are not necessarily watched in real time. As exemplified by technologies such as the BBC’s iPlayer, on demand viewing and listening is becoming more significant in media consumption. Rajar research earlier this year found that 4.3m people in the UK have downloaded a podcast, with 1.87m people listening to podcast once a week; while Motoral research last year found that 43 per cent of UK broadband users watch webTV.
Consequently, producing engaging video content that will work well on the web is assuming increasing importance. Video content can draw stakeholders onto corporate websites, allowing corporations to tell their side of the story eloquently. Moreover, it can provide influential input into wider debates raging across the blogosphere and social networking sites.
Businesses ignore such voices at their peril. HSBC, you may recall, was forced into a U-turn on its decision to scrap an interest free overdraft for graduates after nearly 5,000 graduates signed up to Facebook group Stop the Great HSBC Graduate Rip-Off. In this era of consumer power and investor activism, corporations cannot hope to flourish if they ignore effective communications channels and techniques.
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