The Sun Puts Us All In A Spin...

So, Alistair Campbell reportedly believes that The Sun overestimates its power on voters. Fascinating that a man who made his fame and fortune manipulating the media should now question its influence. He might as well have told the world that his job was pointless, his efforts wasted and his life's work a complete farce (and many a person would agree with him).

However, I am probably not alone in thinking that he doesn't actually mean it - the power of the Sun bit. He's still spinning. It hurts and he knows it.

Not since 1970 has The Sun backed the wrong party. Have they got it wrong this time? Pretty unlikely from where I'm standing.

Suppose he's right though and The Sun doesn't have the sort of power it thinks it has. Let's suppose they are only doing this to keep readers onside; that their customers are telling them they've fallen out of love with new labour and they want their readers to keep on loving them. Let's suppose than rather than seeking to influence the electorate, they are just looking out for themselves. They are not trying to wield power: they are trying to protect profits.

The Sun is a business after all. It needs it readers more than they need them. So, they've got to get this one right - and that is what Gordon needs to worry about. If Murdoch wasn't pretty sure that a fair whack of his 3.13 million daily readers would follow them down the ditch labour route, he would never have let the paper go there.

Campbell's blog is well worth a read - http://www.alastaircampbell.org/blog.php. I'm just loving the spin in that. He writes; "When The Sun came out for TB they did so with the headline 'The Sun backs Blair.' Today's 'Labour's lost it' underlines that the decision is about negative feelings towards Labour, rather than positive support for Cameron."

Is it just me or is their decision to switch allegiance because the current party has simply lost it actually worse than switching because there is an alternative on the horizon? If someone told me I had lost it - because I had lost it, I'd feel pretty grim. I'd rather they told me I was good but was just pipped at the post by some other charmer, and it was probably time to try something new and all that (words anyone in agency life has heard at one time or another).

All in all, the whole debacle has left me feeling a little cross. Labour splashes a fortune on spin doctors only to declare that the power of the plaudits they are seeking to influence is grossly overestimated. Do they think we are complete fools?

A whole industry has sprung out of a corporate (and increasingly personal) desire to shape media attitudes. Many a PR person will tell you that Bill Gates once said he would spend his last dollar on PR. I doubt Bill Gates will ever be down to his last dollar - he's to bright for that. He knows only too well that the media can make you - or break you. Yes, media is becoming increasingly diverse and newspaper circs are still falling but 3.13 million readers is not to be sniffed at, and not a far cry from 1992 daily readership figures of 3.5m.

PR is not suffering in the downturn as much as advertising because it has such an important role to play today. The media, whether new or traditional, is still phenomenally powerful and, as the UK's best selling daily newspaper, The Sun is arguably the most important medium for brand communication in Britain today.

Yes, readership numbers are falling and yes, the Internet is changing the way we communicate but as far as the next election goes - The Sun is either a) able to influence how people vote or b) acting as a barometer for the mood of the nation or c) a bit of both.

Worryingly for Mr Brown, I'd wager the answer's C - and Campbell knows it.

Online PR: Weaving your way into the world of widgets and beyond

Since we entered the noughties, more and more consumers have left their daily newspaper on the doorstep having been distracted by the lure of the World Wide Web. Where lonely-hearts columns once dwelled Match.com stands firmly in its place, gossip pages have become usurped by the likes of Perez Hilton and TMZ and, perhaps most significant of all, Google has ensured we’ll never have to search through the paper to find ‘that’ article again.
Both content and consumer are now unavoidable online with the average person (that’s the youths, the suits and the greys) clocking 6 hours web time a day and why shouldn’t they – with news sites such as The Times and Daily Mail Online being updated up to every 7 minutes. Just as the tide changes when the earth moves, traditional PR has moved alongside the media industry with online strategy now helping to bridge the gap created by Web 2.0.
Now, as PROs, we find ourselves confronted with RSS feeds, Twitter and SEO. It’s a virtual parallel universe where bloggers sit in seats once filled by journalists and podcasts blare out in place of radio.
Online PR has been likened to common sense and, with research; there is no need to be intimidated by what could be a potentially thrilling new spectrum. There are many tips and tools helping everyone to dig their toe into the digital PR pool – Search Engine Guide, Every Dot Connects and Neville Hobson to name but a few.
The output may have been stretched to an infinite size and the essential PR kit broadened to encompass forums, bookmarks and virals but the underlying concept remains the same:
Come up with an innovative brilliant idea that get’s the world talking – as now there’s an even bigger platform for to stand on.
Besides, now we’re all getting to grips with Web 2.0 I’m sure it won’t be long before 3.0 pops up with a yet another set of puzzling anagrams…. I’d better work fast!

Are the Tories reading this blog?

Today’s FT front page story that George Osborne is considering selling a tranche of shares in Lloyds TSB and RBS to retail investors in a re-run of the 1980s privatisations echoes an idea put forward in this blog a few weeks ago (See “What next for the banks?” August 25th) and prompts the question: are the Tories reading this blog for policy ideas?

Whilst I don’t have an answer to that question (if you are could you also consider capping my council tax?) this is certainly populist politics from the party that is probably going to be our next Government and once again leaves Labour trailing in its wake, just as it did over MP’s expenses.

However, there is another good reason to consider a strong retail investor presence on the shareholder register. One of the main reasons behind the deliberate targeting of millions of small investors with the 1980s privatisations was in order to make it more difficult for a future Labour Government to renationalise.

Once they become private companies again our banks will be prey to global M&A activity and the possibility of foreign takeover. My personal view is that it is vitally important we retain a strong banking system populated by British-owned banks, not sub-branches of some enormous global banking institution.

Normally, any predator would only have to persuade a dozen or so institutional investors of the value of a deal but with a strong retail investor presence the logistics of persuading shareholders to accept an offer becomes that much more difficult and high profile within in the media.

At the moment, this is just being floated by Central Office but I suspect it will find its way into the Tory manifesto as Mr Cameron certainly knows a popular policy idea when he sees it.

Down in Flames

I’ve been reading (selectively, it’s 850 pages) the DTI Report on the demise of MG Rover over lunch. There are some absolute crackers in it which will make for uncomfortable reading across the Midlands today.

There’s the email from a lawyer at a firm not too far away from where I sit, sent on the day after the completion of the deal with BMW. “Congratulations and thanks to everyone for a great job in completing Phoenix within an impossible timetable – even if we don’t know what we have bought or what any of the agreements say!!” So much for due diligence.

Or there’s the fact that one of the Phoenix 4 was having a ‘relationship’ with a Chinese consultant, employed to advise on the Shanghai Automotive partnership, who was paid £1.7 million over 15 months. My mother has a name for that sort of relationship.

Or there’s the lovely little anecdote of an attempt by the Phoenix 4 to pilfer the monies from an escrow account at MG Rover subsidiary, Powertrain, which amounted to a mere £25 million.

Or there is the mysterious transfer of XPart, the parts subsidiary of MG Rover, to Phoenix Venture Holdings for just £2 in 2002. It was later sold to CAT for £31.6 million.

Overall, the impression gained from the report is of four individuals with careers going nowhere (since when does a former Bromsgrove accountant qualify to be a finance director of a volume car firm) who got lucky, saw their chance to make a lot of money and took it. Today’s statement from the Phoenix 4, which attempts to blame the Government for not baling out MG Rover in its death throes, is one of the most blatant attempts to deflect blame I have read in some time.

The real irony is that, with deals like the XPart one, Phoenix asset stripped MG Rover of some of its most valuable business streams, which is of course exactly what Alchemy Partners were accused of planning.

End of the PLC?

Excellent article today in The Times by Charlie Mayfield, Chairman of the John Lewis Partnership, which asks some serious questions about the future of the PLC as the best model for business in the UK. It can be found HERE.

Mayfield characterises the PLC model as being prone to short-termism, elitist, in that it usually excludes the means of production, namely the actual workers, from the ownership structure and only interested in management teams that can deliver double digit growth year on year, or else.

In all honesty, there’s not a lot I can disagree with here. My own time in the City was characterised by deepening disillusionment with the obsession for capital growth over income stocks, the need for “excitement”, which usually meant M&A activity, and an almost total disregard for the retail investor, otherwise known as you and me. All of this led very sound companies offering a good dividend year on year to be downgraded or just plain ignored by analysts with the result that management teams often resorted to desperate M&A activity to engender some interest in their stock. The JD Sports acquisition of First Sport would be a classic case in point, which nearly brought down the entire company.

While I don’t think it’s the end of the PLC, I do think the UK economy could benefit from some diversity. Again, Germany could be a good model, where major companies like BMW, Vaillant, Schaeffler etal remain private, family owned concerns existing alongside the likes of Siemens which is listed in Frankfurt and New York.

Worth a read.

The Pendulum Swings

I would like to write a blog about something other than News International or bankers but the opportunities for comment just keep coming thick and fast.

Yesterday’s pre-emptive strike letter, in advance of the G20 summit, from Europe’s Big Three (Brown, Sarkozy and Merkel) which threatens curbs on banker pay and bonuses will have sent a chill through the City of London. Lord Adair Turner, Chairman of the Financial Services Authority and a former banker made similar noises last week but was roundly derided as being out of touch and barking mad, but it now appears that our political leaders are thinking along much the same lines.

Turner suggested that much of our investment bank activities, such as credit derivatives trading, was “socially useless” and “trading for trading’s sake” in order to gain commission, before proposing a version of the Tobin tax to try and curb excess profits and, in turn, bonuses. The City was quick to respond with its usual defences. “If you do this all the equity capital markets activity, derivatives trading and arbitrage will flee to Frankfurt” followed by the inevitable “we make an enormous contribution to the UK economy.”

They clearly had not read Turner’s remarks properly because what he actually proposed was international not solely UK regulation and that is exactly what the Big Three are proposing to the rest of the G20. How will the banker’s respond? Well, if they go ahead with another round of inflated bonuses in a few month’s time you suspect that they will be just making it worse for themselves. On Channel 4 News last night Christine Lagarde (right)the French Finance Minister, was asked by Jon Snow if she thought the bankers would still take the money. “They better hadn’t” was her reply. It’s been a long time since our bankers were talked to like that.

The pendulum has now decisively swung back towards regulation and away from the laissez faire Anglo Saxon approach pioneered by Thatcher, Reagan, Blair and Clinton. The key issue now is whether the Obama Administration will get on board. There will certainly be intense pressure from the likes of Goldman Sachs to repudiate what will be billed as ‘European’ and ‘French inspired’ regulations. The next few weeks should be fascinating.

Murdoch opens a second front

They’re either very worried at News International or very brazen. James Murdoch’s Media Guardian lecture in Edinburgh which received blanket coverage over the weekend is a second front in the attack on ‘free news’ which his father started last month. It can be found HERE

His usual targets list will come as no surprise to anybody, namely OFCOM and, of course, the BBC who are now accused of ‘dumping’ free journalism onto the market. It feels to me like an attempt to corral the rest of the media industry into supporting the News International payment for content policy which his Dad recently announced. Of course, this can only work if he gets everyone else on side and there is no ‘free news’ for anyone to access – hence the attack on the Beeb. Apparently, similar moves by the major news organisations in the States to produce an industry standard payment policy are also underway, albeit in their early stages.

Couple of points. Firstly, is the idea of different media organisations banding together to invoke a payment-only system anti-competitive? I’d be interested to know what OFCOM think.

Secondly, what do they intend to do about websites such as The Huffington Post which is way out in front of most traditional media outlets in its coverage of American politics, but has virtually no journalistic overhead and a low cost base? (Apparently the journalists all write for free in return for generating their own journalistic ‘brand’ and readership following which then buys their inevitable books).

Overall, I think Murdoch makes some good points, but I can’t help feeling that the big winner if he gets his way will be guess who? That’s right, News International.