Monday, 31 October 2011

Qantas aren’t so social in a crisis

Australian airline Qantas got a digital spanking over the weekend, whilst many of its on the ground staff were ‘locked out’ during trade union talks over working conditions.

Qantas grounded all of its flights during strike action and saw over 70,000 customers affected but it wasn’t so much the cancelations that infuriated people. It was their robotic, impersonal approach via their social media feeds that sparked the backlash.

With no staff to man information desks, disgruntled passengers were forced to turn to the Qantas Twitter feed for answers. Social media gave Qantas the opportunity to make amends for all the disruption but rather than engaging and responding (i.e. what you’re meant to do on social media), bosses chose not to respond to messages at all for 48 hours and simply sent out robotic one way tweets to explain what was happening. Perhaps the guys who normally respond to @messages were also on strike!

For such a well-respected airline to completely change the way it communicated with its customers during their time of need was not the best of moves. This was demonstrated by several new fake Twitter accounts popping up during the chaos poking fun at Qantas and its CEO, Alan Joyce, including @AlanJoyceCEO and @Qantas_VH_OQA, whilst a new Facebook page entitled ‘Lock out Alan Joyce, not Qantas workers’, quickly amassed 6,000 likes.

I appreciate that the sheer volume of tweets directed at Qantas’ Twitter feeds would have made responding to all an unenviable task. After all Qantas and Joyce were trending worldwide at points over the weekend, indicating in excess of 1,000 tweets per minute. However, I’m sure many of these tweets would have been people venting their annoyance at their flight being cancelled to their followers or news feeds reporting the delays. The actual number of people messaging @QantasAirways would have been significantly lower and I’m sure a lot of those messages would have been asking the same question and could have therefore be dealt with in blocks. Perhaps in hindsight Qantas bosses might have planned for additional resources to manage their social media feeds once they knew the strikes were taking place. The positive news is that after all the criticism they have now reverted back to being social again and are responding to their customers individually once more.

This isn’t the first time a major brand has been criticised for its social media failings and will certainly not be the last. There is no one set of rules that will prevent companies using Twitter or Facebook from ever being criticised online. But there is one that they should all adopt - Learn from your mistakes. Let’s hope Qantas take that on-board.

Feed-in tariff cuts on solar PV installations

Solar panels used to be about heating your own water and producing green electricity. You were doing your bit to save the planet and there was something really admirable about it.

Now it seems that pocketing cash for feeding your unwanted electricity back into the national grid has taken over as the number one driver for the uptake of renewable technologies. Googling the subject this afternoon has left me feeling flat as the traditional images of green fields, fresh water and smiling children have been replaced by a bamboozling mixture of ROI calculators, confusing tariff payments and unethical rent-a-roof operations.

Don’t get me wrong, more money each month is nothing to turn your nose up at but what
happened to saving the planet? As a trade PR and self-confessed nerd, a large proportion of my working day is spent reading and writing about the benefits of renewable technology and sustainable materials. Yes, most of my work will mention the reduction in fuel bills because it has and always will be a massive plus point in the mission to go green, but maybe we’ve gone too far?

This week the Government has brought forward its plans to slash its feed-in tariff on domestic solar PV installations by 50%, from 43p/kWh to a less appealing 21p/kWh. Why? Because, in the words of Energy Minister Greg Baker: “We’re burning through the budget.” Put simply, the cost of solar PV has plummeted by 70% in the last two years making the return on investment far greater than the Government had ever intended. To make things worse, cheaper panels have generated greater enthusiasm, leading to more hands dipping into the Government’s dwindling pot of money.

A small part of me is smirking because for a short time at least we are getting one up on our leaders but the majority of me wants to ask, wasn’t it about the environment anyway?

Thursday, 27 October 2011

Debt crisis solved (hopefully), now deal with the demand crisis please!

European leaders are busy slapping themselves on the back today, but they shouldn’t get too carried away – there is an even bigger job still to be done.

As ever the past can give us a clue to the future. When Franklin Delano Roosevelt FDR) became the 32nd President of the United States at the height of a banking panic in 1932 he dealt with the immediate problems with a torrent of legislation designed to stabilise the situation. The Emergency Banking Act gave banks vital breathing space against foreclosure. The Federal Deposit Insurance Corporation effectively guaranteed all deposits which stopped the run in its tracks. The Glass Steagall Act separated commercial and investment banking thereby controlling the rampant speculation which had undermined efforts to bring America out of the Great Depression.

All of this should sound familiar to European policymakers, but crucially Roosevelt did not stop there. In between his election victory in November 1931 and his inauguration in March 1932 he attended a meeting at the White House with outgoing President Herbert Hoover and the British economist John Maynard Keynes. Hoover talked passionately about why it was not the government’s place to stimulate demand. Keynes retorted with his belief that fiscal and monetary measures can mitigate the adverse effects of economic recessions . The story is that FDR did not understand a word that either said, but he instinctively knew that something had to be done, and if that didn’t work he’d “try something else.”

The result was a monumental kick-start to the American economy. He expanded a Hoover agency, the Reconstruction Finance Corporation, making it a major source of financing for railroads and industry. The National Industrial Recovery Act established rules of operation for all firms to stop cut-throat competition, such as predatory pricing, and also increased wages.

Crucially, the recovery was pursued via pump priming with Federal money. $3.3 billion of spending via the Public Works Administration for example created the largest government-owned industrial enterprise in American history, the Tennessee Valley Authority (TVA), which built dams and power stations, controlled floods, modernised agriculture and homes in the Tennessee Valley. In simple terms, FDR put people back to work and gave them money to spend which in turn created demand.

All of this is very much counter-intuitive. Our instincts in times of financial crisis are to retrench and hoard what we have got. In actual fact we need to be spending and Government has to give the lead, in order to rebuild confidence.

The sense I have is that our policymakers know what has to be done even though it goes against many of their instincts. Our current Chancellor of the Exchequer has talked in vague terms about “big capital projects”. This is going to need more than words though.

Monday, 24 October 2011

Murdoch shareholders should vote with their feet

The News Corporation AGM in Los Angeles went off with barely a hitch on Friday. Rupert was apparently his normal combative self. There was the usual words of contrition in relation to phone hacking and everything was voted through on the nod.

Rupert reigns supreme. The most compliant board of directors in corporate history remains in place. The fa├žade of proper governance continues.

All this despite various institutional shareholders sabre rattling in advance and attempting to vote down the re-election of various directors. Christian Brothers Investment Services (CBIS) for example, tabled a resolution to separate the roles of chairman and chief executive, positions currently held by Rupert, and instead replace them with an independent chairman. It was rejected.

In fact, some of the world's largest investors voted against his re-election, and that of his sons, to the News Corp board. They also did not approve of the $33m (£21m) he was paid as chairman and chief executive this year.

None of this matters one jot. Murdoch owns 12 per cent of the company but controls about 40 per cent the votes because of News Corp's two classes of shares which ensure that the Murdoch family can vote down anything it doesn’t like. Pity the poor institutional shareholder.

Well no not really, in fact it is difficult to have any real sympathy for the institutions on this one because they are trying to have it both ways. They want to have their cake and eat it (I’ve never understood that phrase, I mean what else are you supposed to do with cake?). The institutions want influence, but they also want the money ie. dividend and capital growth.

The problem is they all knew what News Corp was like when they signed up and they knew that influence and proper corporate governance were not on offer. It’s all a bit late to start bleating now!

Of course if they really feel strongly about this they could vote with their feet and sell their shares en masse, but that would mean they wouldn’t get the money - oh damn!

Friday, 21 October 2011

For #$%*@’s sake Merv’, lighten up a bit!

The Governor of the Bank of England, Mervyn King, has been a little ray of sunshine recently. Two weeks ago he told us that the current economic crisis was the “worst ever” which is quite something considering what the world went through after the 1930 Crash. Today I notice he is telling us that “time is running out to save the world from economic crisis.”I’ve no doubt that what Merv’ is actually doing is trying to coax Messrs Merkel, Sarkozy and Lagarde to pull their finger out and sort the Eurozone crisis but the message he is sending to the High Street and to business confidence is highly negative.

I am not for a moment suggesting that Merv' shouldn't tell it like it is but we must not lose sight of the fact that his opinions can move markets and consumer sentiment. Yes there is a sovereign debt crisis in the Eurozone but we also have a demand crisis at home. In other words business and consumers in the UK are so worried about economic apocalypse that they are holding onto every bit of spare cash they have and not spending.

To be fair, our current Prime Minister tried to talk it up during his speech at the Conservative Party Conference a few weeks ago although his oratory never reached the heights of Franklin Delano Roosevelt’s call to arms during the Great Depression ("we have nothing to fear but fear itself").

I seriously doubt whether Merv’s new found fondness for a soundbite is helping. At the moment he is talking it down when he needs to be talking it up. His problem is that his every utterance is amplified by the media and the most negative spin possible is put on any economic story.

Take yesterday’s retail sales figures for example which showed an unexpectedly good September for the High Street. The Guardian headline summed up the current problem, “Retail sales bounce in September but summer slowdown alarms experts.”

So come on Merv’ lighten up a bit!

Wednesday, 19 October 2011

PM Just checked in to 10 Downing St…

The Right Honourable gentleman to my right has just checked in to parliament, tweeted his #pmq and liked ‘Ed Miliband looks like Babs from Chicken run’ on Facebook (yes that page does exist; most likely administered by Dave Miliband).

All jokes aside though, politicians’ obsession with social media seems to be unprecedented in 2011 and why shouldn’t it be? 

Modern politics is a matter of branding. Political parties function as both consumer and b2b brands - the same rules of engagement apply. This is why David Cameron recently set up a ‘Linked In’ profile (Although I’m sure he’s not looking for a new challenge).

In fact all three main political parties have socialised their websites and many MPs are encouraging Facebook campaigns and real-time twitter debates. In the age of the disparate voter it all seems like a smart move to me.

No doubt politicians have seen the rewards that brands have reaped from providing consumer touch points on the social web. Social media brings you closer to your target market; the more you engage with them, the more viral you become, meaning more interest and advocacy – the latter of which being the most important factor for any political campaign.

It’s across the pond where perhaps the use of social media in politics has paved the way for others to follow. I’m sure many in Whitehall have looked at Barack Obama’s digital successes and salivated over the results – although the jury is still out on that one for 2012. 

Whilst the Lib Dems are developing a similar social database (a Voter Activation Network) to that which the Democrats used in 2008, if you're expecting Cameron to be heading up something similar for the tories I wouldn't hold your breath, this venture is no doubt all mouth and no trousers.

Quite simply though, no party can expect to win elections without knowing who their voters are and engaging with them – social media only maximises this opportunity. With social data coming in to play I’d expect a whole new type of political campaigning come the next election.

Yet, whilst David is busy checking into the United Nations HQ in New York on Foursquare, I can’t help but wonder if there is an olive branch being sent out to the ‘disengaged youth’ that make up so much of ‘Broken Britain?’ Yeah, whatever. 

Tuesday, 18 October 2011

Kellogg's taste-based technology is fool's gold

I had to check it wasn’t April Fool’s Day when I read about Kellogg’s new ‘taste-based technology,’ which uses sensory stimulation to enable viewers to ‘taste’ products simply by watching a YouTube video.

I’ve shown The Drum's article to three people in the office and all gave the same reaction: “It looks like an April fool, but it’s not April. It can’t be.” And for that reason alone, I think this is one of the best ‘fools’ I’ve ever seen.

Instead of scrambling for coverage on April 1st alongside dozens of other food and drink PR teams, Kellogg’s and glue Isobar have used the “It’s All Lies” campaign to plant a genius April Fool in October. And you can be sure there’s more to follow.

It’s not just the timing that’s clever. Unlike many cheap stunts I’ve seen, this story is more than believable with seemingly credible references to innovation and technological development from all parties – even YouTube!

It might sound like something out of Charlie & The Chocolate Factory but technology continues to amaze me - who would have guessed three years ago that we would ever be able to watch live football in 3D? I blogged recently about Scent Marketing, which exploits sensory perception to encourage brand advocacy, and this just seems like the next step to me.

In fact this fool is so clever it wasn’t until I read the last line (“The taste-based technology advert forms part of ‘It’s all lies - they’re not even square!’ campaign”) that I completely ruled out the possibility that this story was real. Did it fool you as well?

Thursday, 13 October 2011

Blackberry Crumble

I remember it clearly. I had typed a message on BBM (BlackBerry Messenger for the un-initiated) to my friend expressing my shock at the previous night’s X Factor results, pressed send and...nothing. Well, not nothing precisely, but a single solitary tick. No ‘D’. No ‘R’. Just a cyberspace shaped void of the unknown.

Now I’m not naive enough to think technology is going to be on my side all the time, but several hours later when my message was still seemingly floating somewhere in the ether, I became suspicious.

Being a social media fiend, my first investigation was on Twitter. I was relieved to see that hundreds of other tweeps were wondering what was going on, however I was also shocked that all the tweets were questioning the issue, but there was no explanation. So, I decided to transfer my investigation to Google, because it’s the fountain of all knowledge right? Wrong. Again, there were plenty of real-time results flashing up from confused BB users, but no statement or apology from Blackberry themselves. Getting annoyed at this point, I headed straight to the Blackberry website where there was bound to be some form of explanation behind it? Yep you guessed it. Nothing.

Slowly, a few half hearted messages from the @UK_Blackberry Twitter feed started to trickle through acknowledging the problem, and even apologising, but what they were apologising for was still a mystery. Looking now at the Twitter feed, there have been a measly 7 tweets about the issue, and a reason for the problem was not given on their official website until 10pm Tuesday – over 24 hours after the crisis broke out. (The explanation, when it was eventually given, was “message delays were caused by a core switch failure in RIM’s infrastructure”. How many people are going to know what that means?).

What I have difficulty understanding is Blackberry’s approach to the whole crisis. Tens of thousands of loyal customers were crying out in their hour of need and they simply ignored them. Questions fell on deaf ears, Facebook posts about it were deleted, as were Twitter posts. Blackberry essentially turned their back when their customers needed them the most.

It’s common practice in the social media world that in order to succeed online, you have to keep up constant communication with your audience, through the good and bad times. The Smartphone market is a tough one, and this could have been Blackberry’s opportunity to stand out from the juggernaut Apple and prove their ability to look after customers in a crisis.

Four days later - there are still ongoing issues and one hell of a backlash. Shares in RIM have dropped and I’m sure Blackberry has lost a large following. To make matters worse, this has all come just days after the launch of the iPhone 4S, and a heightened interest in Apple after the passing of Steve Jobs.

It will be interesting to see if the following hours, days, or even weeks will prompt another response from Blackberry, but one thing’s for certain, if they don’t act soon they’ll be heading straight into the ‘How not to handle a crisis’ handbook.

TV football rights spat obscures bigger issues for the Premier League

Liverpool Football Club, my team, have been hammered in the last 24 hours for suggesting that it deserves a bigger slice of the rights for foreign TV coverage of the Premier League. Words like greed, anti-competitive and disgraceful have been freely bandied around by an unholy alliance including the Daily Mail’s Martin Samuel and Dave Whelan of Wigan Athletic.

My own view is that this row is a negotiating ploy and a shot across the bows of UEFA and the Premier League to properly implement the Financial Fair Play rules which Manchester City seem intent on driving a coach and horses through. The Liverpool position appears to be, “implement the rules and allow us to be competitive or we’ll raise revenue any way we can, in order to be competitive.”

However, the danger is that this spat obscures bigger issues which ultimately the Premier League is going to have to grapple with, like it or not. Taking off my football hat and putting on my marketing hat for a moment, it has been clear for some time that there is a vast untapped audience for Premier League football, an audience which is currently locked out of the Sky Sports monopoly.

Who are these people? I refer to them as the ‘occasional fan’ who wants to, half a dozen times a year, watch his or her team but does not want, or cannot afford, to shell out for a Sky Sports subscription which includes films, news and all sorts of stuff they neither have the time or the inclination to watch. Those locked out include pensioners, students and those like me who just don’t have the time because of family commitments to sit down every week and watch football on TV.

“Get yourself off to the match then and watch it live” I hear you cry. Only I can’t because Liverpool matches are all sold out in advance and the season ticket waiting list was closed when it reached fifteen years!

But, there is a ready-made solution. In American baseball, the rules allow that once a match is sold out it can be streamed live for fans who couldn’t get in to watch. Most clubs now have their own TV stations or broadband streams which do everything except show live matches. Only we can’t have that here because of the Premier League deal with Sky Sports which gives exclusivity for all matches in the UK.

We currently therefore have the absurd situation in which an individual in Hong Kong, Singapore or India can watch a Premier League match live from Anfield, but someone living half a mile from the ground on Breck Road cannot. The revenue potential from this ‘occasional fan’ grouping is enormous and I’m just talking about UK viewers, I haven’t even got into streaming matches across Asia!

The newspaper industry spent the best part of a decade denying that the web would have any impact on its business strategy. It was wrong. My guess is that, at some stage, the Sky Sports deal will be pulled apart by the same pressures and antagonisms. Don’t believe me? How many football fans out there have used Iraq Goals or some other illegal streaming to watch their team I wonder?

The dam is breaking. I look forward to the day when I can pop upstairs, turn the computer on and pay a tenner to my club to watch a home match without tying myself down to a year’s Sky subscription. Bring it on!

Friday, 7 October 2011

Michelin stars and more help make Birmingham great for foodies

Interesting news this week that Birmingham has been named by Olive Magazine as Britain’s gastro-capital – beating the likes of London, Edinburgh and Manchester hands-down.

As much as I hate the term ‘gastro’ (much like ‘organic’, it seems to have been diluted into a marketing descriptor by brands and venues which don’t always merit the term), I don’t think many Brummies with an interest in food and drink would disagree with the accolade.

This is a city with three Michelin-starred restaurants (I’m lucky enough to have enjoyed my wedding ‘breakfast’ in one of them) and even more culinary talent already biting at the ankles of Messers Turner, Purnell and Tipping. The place is literally packed with good, very good and outstanding restaurants.

But that’s not all. Aside from the restaurants, Birmingham hosts a packed calendar of foodie events from the NEC to Cannon Hill Park, not to mention thriving farmer’s markets in suburbs such as Harborne, Moseley and Kings Norton. It is bursting at the seams with local producers from sausages to chutneys and that’s before I’ve mentioned the Chinese Quarter and Wholesale Markets too.

If that’s not enough Birmingham has, of course, also cooked up global brands such as Bird’s Custard, Cadbury and HP, throwing in more than a pinch of history and heritage with each. Even today, the likes of East End Foods are leading their own global markets from in and around the city which is even credited as the birthplace of balti. Need I say more?

I’m biased, but I dont think there’s a more deserving winner. Now I’m off to Ladypool Road for a balti...

Thursday, 6 October 2011

Another round of QE but does it work?

Very quick take on the Bank of England’s shock decision to order another £75bn of Quantitative Easing – a full month earlier than originally expected!

For the uninitiated (I envy you!) QE, as it is known, is the process of the Bank of England buying back Government bonds from the banks. In turn, this gives money back to the banks which should in theory ease the credit crisis as they use this money to lend to business and to consumers.

The big question now is, will it work? My own gut feeling is that it won’t. Regardless of what happens to the extra money given to the banks, and many people believe that too much of it goes on rebuilding their balance sheets or speculative trading abroad, you can’t help feeling that the Bank of England is giving drugs to the doctor rather than the patient.

What is clear is that certain sectors of the economy, such as the High Street, are suffering from a demand crisis. In other words, you and I are not buying anything because we are too busy tightening our belts. It may be simplistic, but the likes of Simon Jenkins in The Guardian have been arguing for some time that the banks cannot be trusted to lend and we should be using the old helicopter theory of economics in order to stimulate demand ie. take a helicopter up with sackloads of money and tip it out.

That should be fun to watch if nothing else, but at the moment I suspect many on the High Street will settle for a VAT cut!

Home Sweet Home Magazines

It’s really encouraging to hear that the homes magazine sector is doing well, as discussed by Isobel McKenzie-Price, editorial director at Ideal Home and, in today’s article.

Only a few weeks ago, I blogged about home interest magazines and how they are as popular as ever since we can no longer afford to move and so want to make the most of what we have.

It’s very encouraging therefore to hear that Isobel believes in homes mags and their role in helping their readers to get what they want when decorating their homes. I love nothing more that flicking through the latest issues and gaining inspiration from the latest trends and clever ideas for getting more for less, particularly as I will probably be in my current home for a few more years yet.

What’s interesting about this interview is the shopping trends of the readers at this time. With consumer confidence at an all time low, we’re spending more time deliberating about our choices before committing – as Isobel says, ‘we’d rather buy once and buy well’.

This ethos will certainly make brands consider how they communicate their differentiation, quality and service as they all vie to be chosen by today’s critical homeowner. We are less loyal to brands than ever before so price and believability will become key.

This latest insight into the home magazine arena proves yet again how PR’s too need to work even harder to get into the good graces of the consumer press as if they buy into a product or service, then their readers are more likely too. However, competition is fierce and PR’s need to do everything they can to convey why their client is exactly what they’re looking for.

Tuesday, 4 October 2011

Credit easing plan should be music to business' ears!

Has George been listening? Yesterday’s announcement by the Chancellor that the Government is considering some "credit easing" appears to be a clear acknowledgement that he wants to get money going directly to companies because they can’t trust the banks to do it for them!

In case you missed it, the Chancellor announced that he was considering ways of getting credit flowing to business either by buying corporate bonds directly or by offering overdraft facilities and short term credit lines. He said: "I have set the Treasury to work on ways to inject money directly into parts of the economy that need it such as small business. It is known as credit easing. It is another form of monetary activism. It is similar to the national loan guarantee scheme we talked about in opposition."

A couple of points. Firstly, this is very good news for business and is an acknowledgement by the Government that we cannot go on much longer without access to credit. I have detailed in past blogs the difficulties companies are having buying capital equipment for example which is stopping them winning contracts and fulfilling orders. If the economy is to get moving again this is a very welcome step.

Secondly, it is a damning indictment of the banking sector that only seven months after the signing of the Project Merlin agreement which made banks promise to lend to business in return for allowing them to pay bonuses, the Government is being forced to step in. As Bob Peston on the BBC put it: “It's proof the Treasury has given up hope that - in the absence of structural reform of the credit market - small businesses will find it any cheaper or easier to borrow, even in the longer term.”

There were plenty of people (and I was among them) who had deep concerns at the time that the fine print of Project Merlin had too many get-out clauses which would allow the banks to wriggle out of their commitments. Unfortunately it gives me no pleasure to say we were right!

My only question to the Chancellor is why did this take so long?

Monday, 3 October 2011

PMI Index says manufacturing is in growth!

A very quick take on the UK’s Purchasing Managers’ Index for the manufacturing sector which was released this morning. The good news is that it’s good news, with the PMI unexpectedly up due to September manufacturing headlining at 51.1 points, compared to 49.4 in August (a Reuters poll had only forecast 48.6!).

All of this of course means that manufacturing has grown over the last month, which considering all that is going on around us is pretty remarkable!

However, export orders have slipped which was probably to be expected on the back of the Eurozone crisis and continuing problems with the American economy. Orders slid at their fastest rate since May 09 - dropping to 45 from 46.9 - due to lower demand in key markets.

Of course any good news nowadays is as usual followed by the doom-mongers who attempt to paint the blackest possible interpretation on even the most positive figures (and the media lap it up of course).

Here’s Rob Dobson an economist at Markit: “The modest return to growth of UK manufacturing to growth of UK manufacturing output in September is a positive, but it is hard to escape the fact that the sector's performance has weakened substantially since the opening quarter's growth surge.”

Thank you Rob you are beacon of positivity!