Uber’s Image Problem

Perhaps you’ve heard of Uber, the smartphone-enabled ride-sharing alternative to traditional taxis. Uber, along with Lyft and Sidecar, work on the premise that a person with a car can offer a service to someone who need a ride, and make a few bucks in the process for both the driver and the company. Now that most everyone has a smartphone–and with real-time location services knowing your every move–connecting drivers and riders is really pretty simple.

But Uber, like the other start-ups, has a few natural enemies. Taxi cab companies don’t like having their business syphoned off by competitors who are not licensed and have little to no overhead.

But it is Uber’s CEO and a senior VP who may become the company’s greatest liability. CEO Travis Kalanick, whose aggressive leadership has been credited with the quick rise of the company, has ruffled more than a few feathers with his aggressive business practices. Uber has been accused of violating its own privacy policy and tracking users for suspect reasons. (You can read more about that on the ACLU blog.) And recently, Uber VP Emil Michael has suggested that Uber should investigate journalists who have been investigating Uber.

Specifically Michael targeted Sarah Lacy, co-editor of the Pando Daily website. Lacy has been critical of Uber’s treatment of women and has been leading the call for Uber to clean up its act. And for that, according to The Tech Bulletin, “A top executive of Uber explained a Nixonian plan to dig up dirt on the journalists who are critical towards Uber and sully their reputations.”

One doesn’t have to be a PR pro to see that this is not a smart move by Uber. Picking a fight with journalists is seldom a good idea. As Bill Greener, press aide to Gerald Ford and Donald Rumsfeld in the 1970’s once said, “Never pick a fight with someone who buys ink by the barrel” (Lewis).

Protecting the Brand

The Broncos and Seahawks gave us a great game this afternoon. Millions tuned in to see the rematch of last year’s Superbowl, and this time it was a much more interesting affair. But if you’ve been paying attention to the news the past few weeks you know that the NFL is in the spot light…but not for the right reasons.

The PR debacle that has the media in an uproar didn’t start with Ray Rice and Adrian Peterson, nor will it end there. But eventually the media attention focused on NFL players behaving badly will come to an end because the NFL is first and foremost about money…and these momentary distractions, if left unchecked, will get in the way of making money and that would be (according to owners and league officials) an even greater problem than this current mess.

Anheuser-Busch spends upwards of $200M a year advertising on NFL broadcasts and have publicly said that they are “disappointed” in the NFL. That kind of money talks, and Commissioner Goodell is listening. That’s why Goodell made a public apology…or at least I think that’s what the press conference a few days ago was supposed to be. The top three rated TV programs last week were…you guessed it…Sunday Night Football, Monday Night Football, and Thursday Night Football. As long as American continue to watch NFL broadcasts, and as long as advertisers pay big bucks to reach those viewers, the NFL will continue. Sure they’ll make a few changes and get rid of a few bad actors. But when the average “career” of a pro player lasts only four years, losing a player or two over bad behavior off the field will not change the game or the bottom line.

I realize this perspective comes across as cynical and jaded. I wish it were different. I wish that the institutions surrounding professional sports, including the media empires that have learned to monetize and merchandize athletic achievement, were more sensitive to the long-term cultural implications of their choices. I wish the NFL brand stood for something more.

 

Cashing in on Legal Pot

The state of Colorado is involved in a grand social experiment. Recreational marijuana is now legal for adults (over the age of 21), and since January 1st is available through retail establishments known as dispensaries. A similar experiment is underway in the state of Washington, but for now I’ll focus attention on the state that I call home.

Plenty of time and energy has been devoted to the debate over the wisdom of making marijuana available over the counter. This post is not about the decision itself, but how media outlets are responding to the opportunity to cash in by carrying advertising for dispensaries. Any discussion about the legality and propriety of accepting advertising is compounded by the fact that marijuana use remains a federal crime. And while federal authorities have promised to look the other way with regard to Colorado’s new law, the fact that radio and TV broadcasters are licensed by the Federal government is having a chilling effect on local broadcasters. According to Justin Sasso, president and CEO of the Colorado Broadcasters Association, the CBA doesn’t think it’s wise for stations “to risk their license–or the legal fees required to fight for their license–if the federal government decides to crack down on broadcasters” (Broadcasting & Cable, Feb 3, 2014, p. 28).

The State of Colorado has a few things to say about advertising retail pot. Last fall the Colorado Department of Revenue issued a 136-page document that stipulates, among other things, that advertisers must have reliable evidence that the audience for the ad does not contain more than 30% under the age of 21. According to the website The Cannibist, the publications High Times and Westword have sued the State of Colorado claiming that the restriction on advertising is an infringement of First Amendment rights. In addition to age restrictions, advertisers may not use outdoor advertising, may not buy out-of-state ads, nor promote marijuana tourism.

Cable TV is subject to different regulations than broadcast TV so if we see TV ads anytime soon we would expect them to appear first on select cable channels. Websites, of course, are subjects to even fewer regulatory restrictions. The Cannabist, a website by The Denver Post newspaper, is staking out territory on the web and will likely become a venue for advertising in the future. The Post even has its own marijuana editor, Richardo Baca.

In some ways this debate is made moot by the fact that marijuana dispensaries have been overwhelmed with business. That, and the free publicity provided by the news media, makes advertising unnecessary for now. However, as more vendors compete for customers, as supply matches and exceeds demand, and the novelty and media attention fades away, advertising will become increasingly important. And then the difficult decisions will have to be made.

Mac turns 30

Thirty years ago Steve Jobs and Apple Computer introduced Macintosh to the world. You may recall that the 1984 TV spot aired only once, and that was during the Superbowl in 1984. Of course the ad has appeared in many places since then, and is still held up as one if not the greatest TV spots of all time.

But I’ve addressed the 1984 spot in earlier posts so I’d like to focus on the affection that the creative community has for the Macintosh operating system and the Apple hardware that runs it. Whether you’re a graphic artist or musician, video editor or animator, the Mac is probably your computer of choice. From the start Apple’s attention to design and style was noticed by people who care about such things. In fact, Steve Jobs admits that his inspiration for building a better computer started with a typography class.

In the mid 1980s a Macintosh computer, a laser printer, and PageMaker software allowed graphic designers to create flyers, posters, pamphlets and other print pieces that rivaled what could be produced in a small print shop. A few years later audio recording and video editing software made large studios and production facilities appear to be unnecessary. The iLife software (iMovie, iPhoto, GarageBand, etc.) that shipped free with every Mac provided access to simple-to-use tools capable of creating amazing works of art. Of course, in the hands of amateurs there was plenty of dreadful art as well.

I was fortunate to have a MacPlus as my first computer at work. It had 1MB of RAM, a single floppy disk drive, and it cost about $2,599. I was able to create documents that I saved to a 720K floppy disk. Then I took the disk next door to my colleague who had his Mac attached to a laser printer. Those were exciting days!

This video by Apple captures some of the excitement and creative energy that Macintosh brought to the community of artists and those who defied the reign of Big Blue.

Keg-Stands, Casual Sex and Scare Tactics: The Selling of Obamacare

A new set of advertisements intended to get young people to sign up for Obamacare have been released online. Produced by  The Colorado Consumer Health Initiative and ProgressNow Colorado, these ads are designed to be an antidote to conservative ads designed to scare young people away.

Rather than pay airtime or insertion rates, these ads are designed to generate social media buzz which, they hope, will drive traffic to the website. One way to create buzz is to push the envelope. The tactic has been used many times before. You might remember the GoDaddy.com Superbowl ads that were “too hot” for broadcast TV. Recently Kmart has been raising some eyebrows with a series of TV spots for the retailer. One recently played on the phrase “ship my pants” and another features an unusual performance of Jingle Bells.

What the Obamacare ads are attempting to do is to attract young healthy customers…the very demographic that is needed to fund medical care for the poor and elderly. Here’s a link to a video from HuffPo that provides running commentary on whether the approach will work with Millennials. What do you think? Are these ads effective and will they convince young people to sign up?

Word of Mouse and Reputation Management

Research suggests that personal recommendations are  preferred by most of us when making decisions about future purchases. Whether you’re buying a car or selecting a movie, knowing what your friends and acquaintances think about a particular brand, model, or company can be an important factor in your decision. Word of mouth advertising has been around since the beginning of time (“Hey Adam, check out these delicious apples”) and it continues to be highly effective.

When WOM moves online, i.e., Word of Mouse, things get a little more complicated. The complication comes from the way that we define online relationships. Facebook “friends” are often not friends at all, but distant relatives or causal acquaintances. Even more removed are the reviewers on Amazon or Yelp. They are most often completely unknown to us yet we often grant them more influence than we ought. We decide which movie to see based on reviews at RottenTomatoes.com and we avoid certain restaurants because of what strangers post at Zagat.com. Most of the time that works out just fine.

However, like any trend this one is being hijacked by unscrupulous individuals and businesses out to make a quick buck. Just Google Ryan Holiday or read this article at Forbes to see how far someone will go to hoodwink gullible people, including reporters. Or check out this news story about Samsung hiring bloggers and students to attack rival HTC.

Public Relations firms and professionals have been involved in the business of reputation managements from the early days of  Bernays and Lee. As this business moves online, new strategies and tactics are needed to stay ahead in the game. What to do if your law firm is getting bad reviews online? Write your own reviews under a fake name. What to do if your company’s Wikipedia entry does not present your brand in a favorable light? Just hire wiki-pr.com to come to the rescue. Wiki-PR will write or edit your Wikipedia entry and monitor it for future edits/changes. Because Wikipedia is consumer-generated it is vulnerable to manipulation by anyone who has a motive and, in many cases, money to hire others to do the dirty work. Wikipedia is aware of the problem and is trying to stay ahead of the curve, but the task for the editorial staff at Wikipedia bears a strong resemblance to Wack-a-Mole.

Bottom line: whether you’re reading an online review or an article at Wikipedia, a healthy dose of skepticism is your first line of defense. Don’t assume that the person on the other side of that recommendation or scathing review is honest and fair. Too often they are neither. And sometimes they are crooks with a financial interest in duping you.

Once was Enough

Marketing is tricky business. And creating a TV ad that strikes the right chord can be particularly difficult when sensitive issues are part of the equation. Once an effective ad is produced, the next trick is to pair it with the right audience and present it in the best possible context. One of two outstanding advertisements that seem to have hit all the right notes is the “Clydesdale Respect” spot that aired just once during the XXXVI Superbowl on February 3, 2002…just five months after the 9/11 terrorist attacks. The second is the “1984” ad for Apple Macintosh, which also aired only once. The Apple ad was broadcast during the XVIII Superbowl in 1984. Here they are in case you missed them the first time.

And the 1984 spot by Apple. This spot was directed by Ridley Scott, who also directed the scifi films Alien and Blade Runner.

Ask your doctor if ______ is right for you…

Advertising is everywhere. And you can pretty much bet that everything, at some time or another, has been advertised. Of course you won’t see ads for tobacco products on TV, but most everything else is advertised somewhere to someone. Sometimes an entire industry is created, with the help of advertising, when consumers become convinced that they must have a new product or service.

Take the pet food industry for example. Before the turn of the century, pet food as a product was not widely available in stores. Dogs and cats ate table scraps and whatever else they could find to eat. Advertisers discovered an untapped market and by the 1960s TV ads for dog and cat food became commonplace. Jump to the present. Not only do we have a pet food industry, but pet food comes in a wide variety of forms and flavors. To make sure that revenue continues non-stop, consumers are warned that feeding your pet table scraps is bad for their health. Consumers spend approximately $18 billion annually on pet food, and the pet food industry even has its own website.

Advertising products for human use and consumption is also experiencing significant changes. Take medications for example. Companies that develop and market remedies have been around since recorded history. Snake oil salesmen promoted their blends of turpentine and various inert ingredients to gullible customers for decades before the FDA and other agencies stepped in. Now, pharmaceutical companies have to pass stringent tests before bringing their products to market…and then they pass on those R&D costs to you, the consumer. But how do you convince the public that they need your product? Advertising of course.

In 2010 “big pharma” spent $1 million to advertise treatments for low testosterone. By 2012 that amount grew to $100 million. And according to Consumer Reports, the advertisements are creating an impression that many more men suffer from low testosterone than actually do. This may be a case where advertising is being used to create demand for a product that is often unnecessary.

Many countries are concerned about pharmaceutical ads directed at consumers. The concern is that they are, in effect, pushing products about which consumers have little or no expertise. Only New Zealand and the United States allow DTC (Direct To Consumer) advertising for prescription drugs. When you’re told to “ask your doctor…”, the pharmaceutical companies are using you, the patient, to exert pressure on your health care provider. My hunch is that coercion of this sort is unlikely to result in better health care.

Resources:

http://www.prwatch.org/news/2008/02/7026/beyond-advertising-pharmaceutical-industrys-hidden-marketing-tactics

The “Holy Grail” of Advertising

In this social media saturated landscape, word-of-mouth (or word-of-MOUSE as the case may be) advertising carries a lot of clout. Because so many of us are skeptical of traditional advertising pitches, a referral from a trusted friend…yes, even a Facebook friend…is highly valued. In fact, according to Reuters, “Facebook Chief Executive Mark Zuckerberg was quoted as saying that a trusted referral was the ‘Holy Grail’ of advertising.”  And just as money is what advertising is ultimately about, money is also central to a class-action lawsuit that Facebook lost when it was accused of using Facebook users’ “likes”, without their consent, to pitch products to their Facebook friends.

This is not a new story. Most of it transpired in Summer and Fall of 2012, but the lesson is worth reviewing and repeating. The poster-child for this particular violation is Facebook user Nick Bergus. According to Venturebeat.com,

The most egregious example of a user becoming the inadvertent spokesman for a less-than-squeaky-clean brand, of course, is Nick Bergus, who became the leading pitchman for Passion Natural Water personal lubricant — in 55-gallon allotments.

A class-action lawsuit, brought in California court, sought damages from Facebook for their use of “sponsored stories” without paying Facebook users or allowing them to opt out. According to Reuters, “A ‘Sponsored Story’ is an advertisement that appears on a member’s Facebook page and generally consists of another friend’s name, profile picture and an assertion that the person ‘likes’ the advertiser.” In the case of Nick Bergus, his likeness was used to sell 55-gallon drums of personal lubricant.

Now that the lawsuit has been settled, a potential 125 million Facebook users are eligible for a settlement of … wait for it … two cents each, or up to $10 if they apply.

One thing is certain, the advertising business is changing. Native ads, what some are calling the “next wave” of advertising, are replacing traditional banner ads, pop-ups, and pre-rolls. As new media companies attempt to find new ways to monetize their business, too often they step over boundaries intended to protect users’ privacy.

The Eight Million Dollar Minute

Companies who want to be a player in this year’s Super Bowl are going to have to pony up some serious cash…somewhere in the neighborhood of $3.8 million dollars for a 30-second spot.  That makes the Super Bowl the most expensive advertising venue out there. So why do advertisers continue to line up to get in the game? And what do they get in return for their money?

TV’s largest audience for starters. Nielsen reported 111.3 million Americans watched last year’s game. An advertiser would have to buy a 30-second spot in each of the nine top-rated network TV shows last week (American Idol, NCIS, NCIS Los Angeles, 60 Minutes, Criminal Minds, CSI, Big Bang Theory, 2 Broke Girls, and the NFL Pro Bowl) to get a comparable number of eyeballs. Or, they could buy a 30-second spot in each of the 30 top-rated cable TV shows to get a similar “reach.”

But a Super Bowl spot is about more than raw numbers. There’s a certain prestige that comes along with being part of this American tradition. There’s also an indirect stock market gain for participating companies that is apparently part of the equation, at least according to a study reported in Kiplinger. There’s also the tradition of Super Bowl spots that live on in infamy. The 1984 90-second spot for the Apple Macintosh is still considered by many to be the greatest TV spot of all time.

And here’s another factor that some advertisers (and would-be advertisers) have exploited to their benefit. An ad that is controversial–too racy or racist for example–can ride the coat tails of the Super Bowl buzz at a fraction of the price it would have cost the advertiser to buy the time. These controversial spots can be uploaded to YouTube, or any of several other internet sites, and have a life of their own…even if they never aired! Go Daddy has played this game as well as anyone in recent years.

Mildly controversial spots can also benefit from all the talk…even if some of the talk is critical. Arabs are insulted by this year’s Coke spot…and Jamaicans are (or are not depending on who you ask) offended by the VW spot. I suspect some will be offended by the Kate Upton spot for Mercedes-Benz.

More and more advertisers are pre-releasing their ads to try to generate hype prior to game day…and often to good effect. Two years ago VW’s little Darth Vader spot was seen by more than 17 million viewers before it actually aired. Last year 34 out of 54 spots were released online before the game.

The other big news in Super Bowl ads is interactivity. Coke wants you to pick the ending of their spot. Doritos invited consumer-generated spots to compete, and then asked us to vote for the winner. And YouTube has their AdBlitz channel ready to go…inviting live voting on all the spots as they air. Which means for many of you the Super Bowl will be a two-screen experience. And with two screens, at least you’ll have something to do if the game is a dud.