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Digital Winds of Change Blowing Publishers Away as Profitable Landfall Remains Uncertain

By Chris Scott

As magazine publishers race to remain relevant to readers and advertisers alike, the jury is still out as to whether the various forays into digital-only waters will prove to be the salvation these publishers seek.

It’s only been nine months since Conde Nast abruptly shut down Gourmet magazine. And now the magazine publishing giant unveiled a slate of apps that revived that brand, among other titles, in pure digital form. The Gourmet Live app, first announced in June 2010, gives users access to the magazine’s voluminous database of articles, but also offers interactive opportunities to access new content, buy premium app-only content and incorporate social sharing technology. Gourmet Live will debut sometime in the fourth quarter, about one year after Conde Nast launched an app for its GQ men’s magazine to go along with its fee-based WIRED magazine app for the iPad, which launched in June.

Meanwhile, print titles are dipping a toe deeper into the digital pool. New York-based website developer and design specialist The Wonder Factory teamed up with Google and Time Inc.’s Sports Illustrated magazine this spring to introduce a prototype digital magazine based on HTML5. (Tech-savvy readers will remember that this is the platform that Steve Jobs claimed makes Adobe Flash obsolete for use in Apple’s line of digital hardware products like the iPhone, iPod Touch and iPad, sparking a war of words with the software developer.) The demo features video that accompanies specific articles and page navigation that should entertain even the most jaded reader of paper-based magazines.

But the real issue here isn’t the technological advances or the “coolness” of these steps being taken by desperate publishers. With the profit paradigm changing nearly every day, the question is “How can these publishing firms make money as readers (and advertisers) abandon printed products?” And although general magazine readership rose eight percent in the last 10 years, circulation of magazines and newspapers continue to decline as whatever readers are left visit the Web for their access to information that used to come solely from print.

So far, The Wall Street Journal is one of the rare newspapers to make any money from its online version of its flagship product thanks to a subscription model that works for its business-focused audience. It will be interesting to see whether The New York Times, which abandoned its TimesSelect subscription service in 2007, will be able to retain the people who currently read its free content when they’re asked to pay for it sometime next year.

Ironically, a recent Times article pointed out that publishers continue to try and learn how to best present their wares online, especially when it comes to creating the viral buzz through social media. Hearst Publishing, in fact has launched a massive social networking push for its Seventeen magazine that aims to attract girls away from Facebook and other online social networks. Hearst hopes to better compete with other online magazines effort by redesigning to also offer more gossip and celebrity news along with its print features.

So it looks like there’s still a long way to go from the days of “Take a look at this article” by passing the print version it to your spouse or co-worker to “Just Tweet this Time magazine article through its iPad app.” (It can’t currently be done, Time admits.) But the “test-and-learn” approach may be only way for publishers to ultimately figure out how to win the war for reader and advertiser attention in the digital battlefield.

July 20, 2010 at 8:07 pm 12 comments

Steve Jobs, Apple and Alfred E. Neuman: “What, Me Worry?”

By Chris Scott

apple_jobsIf you’ve never had a front-row seat at a corporate communications debacle, just Google “apple jobs illness” and pull up a chair for a lesson on how not to work the media when it comes to a serious health issue with a company CEO.

The results page generates everything from “Do shareholders have a right to know?” to “It’s a nutrition problem” to “SEC review under consideration.” Is this the image that Apple, or Jobs, wants to dominate headlines versus continued trumpeting of the success of the new iPhone 3G S?

There’s no doubt that Steve Jobs has persevered in various health issues: a cancerous tumor in his pancreas diagnosed in 2004; a speech at Apple’s 2006 Worldwide Developers Conference that raised serious questions about his unusually gaunt frame; and this year’s “hormone imbalance” that prompted a six-month leave of absence ending this month. Finally, there was the disclosure of a liver transplant in April that took several days to confirm.

There’s also no doubt that Jobs deserves a certain amount of privacy when it comes to dealing with these serious medical issues. But the wunderkind who founded Apple in 1976 — and spearheaded its stunning comeback upon his return to the top spot two decades later — appears to be following the standard script for Apple when it comes to disclosure. And the Securities and Exchange Commission has definite regulations on disclosing situations that could affect the company’s financial health.

Apple’s legendary secrecy about products and new developments, of course, make sense. (The company has no problem quickly firing employees who blab about new products in development and even successfully shut down the Web site over its leaks of what Apple considered proprietary information.) But investors, the media and federal regulators are correctly questioning why Apple has repeatedly failed to provide accurate, timely information on the status of the person who is often hailed as being personally responsible for driving the computer maker to its current successful state.

SEC rules prompted Coca-Cola to report in 1997 that its then-CEO, Robert Goizueta, was suffering from lung cancer, the disease that killed him that October. And following the sudden death of McDonald’s CEO Jim Cantalupo of a heart attack in 2004, successor CEO Charlie Bell decided to resign less than a year later before he died of colon cancer. Tragically, Bell was forced to have surgery a little more than two weeks after taking over as CEO, a fact that was prominently, but appropriately disclosed by McDonald’s at the time.

These multinational companies were able to meet federal requirements while protecting the privacy of the individuals involved. The evasive nature of Apple’s corporate responses to inquiries into its CEO’s health could be attributed to a corporate culture that is used to keeping secrets. It also might be part of the orders from the top that Jobs’ medical condition is his and his alone to be concerned about.

But Jobs decided to come back to work and that complicates the already troubled public relations effort. (Some reports put him on the campus of One Infinite Loop in Cupertino last week, before his officially scheduled return on Monday, June 29.) If he had decided to retire, his medical condition and prognosis would have no public component unless he decided to divulge their status himself. Unfortunately, his corporate communications team continues to work between a rock and a hard place with a sick CEO who sees no reason to adhere to SEC rules and Wall Street investors who rightfully contend that disclosure from Apple is appropriate and long overdue.

Alfred E. Neuman, clearly, has nothing on the keepers of Apple’s current public gates.

June 30, 2009 at 5:18 pm 1 comment

Municipal PR, Chicago Style

By Chris Scott

There are 34,264 metered parking spots in Chicago and by 2013, the per hour rate for meters that charge a quarter in 2008 will rise to $2, a 700 percent increase.

Chicago residents know this because Mayor Richard M. Daley proposed that the city follow earlier fundraising strategies and lease control of the city’s parking meters — and the money they collect — to a private company for the next 75 years.

You would think that such a serious issue would be managed through the experienced PR machine in place at City Hall and its departments, with residents and news organizations aware of the bidding process and the proposals. Chicago citizens would then be able to attend Town Hall meetings where residents and business owners could voice their opinions on how such a deal might affect their quality of life in the Second City.

But you would be wrong.

In the space of less than one week of the Mayor’s proposal, drivers who will be forced to pay the higher rates — as much as $6.50 per hour in certain areas like downtown — were told that a City Council committee had passed the proposal and that it would be voted on by the full City Council within two days. And faster that one could say “Get your 26 quarters together!” the $1.15-billion deal was sealed. One bidder, one contract.

It’s not that the infrastructure to get the word out to the press and the public in a timely manner didn’t exist. The city of Chicago spends an estimated $4.7 million each year to pay for 50 public information officers in a variety of city government offices and agencies. Additionally, weeks before the parking meter lease agreement, the Daley administration announced contracts with 10 outside PR firms for services that could net each firm as much as $5 million per year. Those contracts were announced at about the same time that city officials revealed an anticipated $469-million budget gap for fiscal 2009 along with layoffs of 929 city employees and the elimination of 1,346 vacant positions in city government. (A reduction in city services and higher fees for other things like parking tickets also will be implemented to save money in these troubled economic times, the mayor said.)

What’s wrong with this picture? Absolutely nothing from at least one perspective. Anyone who engages a PR firm is essentially free to utilize or ignore the vendor’s capabilities or advice as they see fit. If the city believes — as Mayor Daley expressed when questioned about the new contracts — that these relationships with the outside PR firms are necessary, so be it. But don’t the agencies with relationships with City Hall have an obligation to advise the client that it might be a good idea to remove even a whiff of impropriety in the ways “The City That Works” generates an anticipated $1.15 billion in upfront revenue through solid, proven PR strategies (community forums, press conferences, more transparency)?

As it turns out, the city suspended the contracts with the PR firms until the budget crisis “is over.” It’s apparently the same old story: Chicago citizens don’t hear about City Hall decisions in advance. What do you expect from an administration that destroyed a municipal airport’s runways in the dead of night in 2003 with no public relations effort or public comment before the bulldozers rolled? At least City Hall is consistent in how it delivers its message, regardless of the number of agencies it hires to consult on such matters. And that counts for something to taxpayers, doesn’t it?

December 29, 2008 at 5:21 pm Leave a comment

Don’t try this at home. Seriously.

Chris Scott

We get the idea that businesses are trying to trim their budgets in these economically challenging times (and are there any other?). And we’ve all heard that old saw that economic downturns are when businesses can least afford to reduce their spending for marketing and PR efforts. (You risk being forgotten when client dollars begin to flow again, etc.)

But a larger issue comes into play a lot more frequently (at least on an anecdotal level, so far): The “Do-it-Yourself” phenomenon. You probably know the drill – or at least have seen it. The head of Company X taps the human resources chief or the head of sales to develop a quick-response effort that can keep Company X’s name before prospective clients. (Or, in some cases, someone at the company’s cousin “knows someone” who “makes stuff” and can “do something” on the cheap. It’s a poor-man’s approach to PR and marketing and comes with consequences.)

Whether it’s a Web site, a promotional piece, an overpriced ad or an “e-mail blast” (so early 2000s!), what you’re likely to get is “something” that stands far apart from your previous efforts like a wallflower at the orgy, to borrow a phrase from Nora Ephron. It probably fails to support your brand, doesn’t look like anything that came before it, carries messaging that falls short of advancing your position and carries that patina of “this wasn’t done by a professional.” Inappropriate paper choices, bad design, clunky navigation, poor graphics all combine to threaten all that positive messaging Company X had built up in one fell swoop.

And if there are failings on the marketing side, let’s face it. On the PR side, most businesses don’t know how to get in touch with the media – much less speak with reporters. They don’t know how to provide that expert source quote or convince a relevant publication to write a feature story about how Company X is faring during tough times. And who has the time when there are so many other fires to put out on an operational level?

So resist the temptation. You might save a few dollars on the front end by not hiring an agency or laying off your in-house pros to help guide you through the process (if not manage nearly all of the actual PR and marketing work involved). But your reputation may end up paying the price if you try to tackle these specialized functions yourself or on the cheap. Even the most experienced do-it-yourselfer knows when it’s time to throw in the towel and call the electrician, plumber (or PR and marketing agency).

Why risk the company’s image and progress by taking on jobs that do not fall under your areas of expertise? You’d be amazed at the number of companies that wind up hurting their reputations with the exact people who could help them survive (or event thrive) as the economy shakeouts continue.

August 11, 2008 at 2:50 pm 1 comment

A brand promise story with a happy ending?

By Chris Scott

Everybody has a horror story dealing with a utility company – from telephone to gas to electric service provider. But few of these companies inspire more customer wrath than the cable company, especially one with a shoddy reputation.

How many times has a friend moaned about the cable company’s missed installation appointments, surprise billing errors, intermittent service or rude customer service?

The complaints I’ve heard usually involve one of the biggest players: Comcast. In recent years, it’s moved into providing Internet and phone services alongside its cable TV offerings for residences and now for businesses. Oh joy. Now they can screw up all of our electronic connections to the outside world simultaneously!

So when we decided to research a new Internet and Internet-based phone service provider for Hodge Schindler, Comcast was last on our list, especially because its push into business services was an unknown quantity. We had visions of the phone cutting out for no logical reason, or losing e-mail and Web access for an extended period of time.

Imagine our surprise when Comcast (and its Business Services department) came through not only with Internet speeds four times faster than our previous service, but also with reliable VoIP phone service for our 10-person office. We’ve had the service for nearly a month now and have (knock wood) experienced very few problems. (The company even threw in free basic cable TV service for our conference room set.)

And all of this costs about 30 percent less a month than the old service for the next three years – the regular price, not an introductory rate.

Not that there weren’t some glitches that had us questioning the entire deal for a time: pre-installation issues with certain Comcast technicians telling us to pay a separate contractor to wire the cable from our building’s basement to our offices; unreturned phone calls seeking answers on installation timing; and, yes, a missed appointment from a technician.

Our skepticism was heightened when it appeared as though Comcast wouldn’t live up to promised pre-installation services due to a lazy technician who lied about his actions (or lack thereof) to the bosses back in the office.

Still, the tale ended happily, partly because we contacted a newly installed Comcast customer ombudsman. And also, I think, because the company really wants to expand its local business customer base. As the beneficiaries so far, that’s pretty cool.

So what have we learned?

  • Comcast is trying (with some success) to overcome its negative brand associations and really is able to offer reliable Internet and Internet-based phone service to businesses at reasonable rates.
  • Albeit with a bit of arm-twisting, Comcast is willing to do what it takes to expand its business client roster, to the extent of wiring an old, not cable-ready building.
  • Sometimes it pays off for customers to take a risk, even when a potential vendor’s poor reputation makes you take pause at doing business with them.

Let’s keep that last point in mind the next time a company suggests giving them a try for a service you might be shopping around for. We certainly plan to.

June 3, 2008 at 3:27 pm 4 comments

Who do you trust?

Chris Scott

PR professionals and marketers rely on a variety of media sources to get our clients’ names and accomplishments in front of business leaders that may be in a position to hire them. And smart business leaders are influenced on those decisions by information gleaned from traditional media as well as online sources.

But it appears that our next generation of business leaders is more willing to accept homegrown – or unverified – information than ever before. In fact, the 25-to-34 demographic ranks the online do-it-yourself encyclopedia Wikipedia as one of the top-trusted sources of information available anywhere. It has had profound implications for the way agencies do business.

This is the message from the Edelman PR’s 2008 Trust Barometer. The survey showed generally higher levels of trust in all forms of media among the “younger elites” than their older counterparts. That included articles in business magazines, television coverage, newspaper articles, company-issued communications, blogs and online message boards.

To me, this raises a huge red flag. The line between researched, documented fact in a journalistic product vs. opinion, counter-opinion and speculation offered by many online venues apparently is becoming blurred. And this is the generation that will be in positions of power within the next two decades.

For every well-researched Wikipedia entry like the one on General Electric Co., there are others that are either incomplete or just plain poorly researched and written. These entries are generally noted by warnings about a lack of sourcing or questionable sourcing at the top of the entry, but doesn’t that make the information that’s there even more suspect? (It must be noted that the site’s managers also seem to be proactive about disruptive edits.

And this is the information source that the next generation of business and political leaders trusts the most right now? Should PR and marketing professionals take advantage of this situation and pump up the volume on client achievements? Where do ethics come in when it comes to using a proven method to reach this group?

This former journalist finds it appalling to think that the level of healthy skepticism toward any source of information is on the decline. Questioning information, whether from company sources or from newspaper or magazine articles, is as critical to making smart decisions as it’s ever been.

Wikipedia’s standing as the most trusted information source by this group could have repercussions for our businesses. An unscrupulous agency might be tempted to create faux entries to boost the profile of a client, relying on whatever impact the entry might make before it is removed or revised. Or clients might request that agencies create entries for this express purpose as yet another “news outlet.”

Participating in the Wikipedia concept isn’t the problem here. The potential for abuse along with the lack of that “grain of salt” skepticism among this particular demographic is. Let’s hope that Wikipedia managers remain vigilant and that our future leaders develop a healthy skepticism that’s needed when it comes to information sources.

April 29, 2008 at 8:15 pm 1 comment

Crisis communications: Have a plan, don’t panic, be smart

Chris Scott

Let’s face it: There’s a reason why “crisis communications” is a PR specialty that not every firm offers.

You see clients at their worst since responses are, as a rule, hasty, reactionary and dissected by all. It’s a pressure cooker for the agency charged with managing the situation because of the need to respond quickly and smartly – often in circumstances where the client is disinclined to follow its advice. And in addition to traditional media scrutiny, there are customers to consider, who have increasing word-of-mouth clout making them even more difficult to manage than the press.

But helping companies deal with the PR maelstrom created by recalls, product tampering or embarrassing behavior by top executives is part of an extremely important job, one that most companies are smart enough to not handle on their own.

Just ask officials at Wendy’s, who in 2005 had to deal with a customer claiming that she bit into a human finger in a bowl of chili. While the woman was eventually convicted of attempted grand theft and conspiracy in the fraudulent claim, the chain reportedly lost $2.5 million in sales thanks to the bad publicity. In essence, even proper handling of the incident still hammered Wendy’s reputation and its bottom line.

So what’s a smart company to do? The worst response, obviously, is to bury one’s head in the sand and hope the crisis will just go away. It’s also not a good idea to test the public’s (or the media’s) sense of trust when addressing the situation. Did absolutely no one at Mattell – anywhere – know that a manufacturing plant in China was using lead paint on Dora the Explorer and her buddies? And tread lightly with “dark blogs,” which are designed to be activated when a crisis happens. Their credibility is questionable since they often come off looking pre-packaged and not necessarily a direct response to the issue at hand.

A better idea is to consider crisis communications like your relationship with the dentist: Brushing and flossing every day will make you better prepared in the event a tooth unexpectedly chips or breaks. Likewise, having a concrete plan in place and not panicking once the crisis erupts can prevent the situation from becoming a catastrophe.

February 15, 2008 at 7:12 pm Leave a comment

When being trendy is not your style

Chris Scott

To get – and stay – ahead of the curve, 63 percent of businesses are bumping up marketing spend in 2008, according to a recent article in B2B Magazine.

What will they spend it on? Well, trends indicate that online everything is going to be big this year, along with neurological market research and continued outreach to younger targets. And because it’s a trend it must be true, right? Not necessarily. Businesses would do well to consider carefully whether (or not) the trendy action they want to take would really advance their business objectives.

A few “trends” I’ve run across lately that have thrown up a red flag:

  • Social Marketing – Facebook, MySpace, LinkedIn and other buzzworthy concepts are spreading in popularity among marketers faster than the Bird Flu. Social marketing can be very effective when used appropriately. But some businesses lend themselves to this approach – and some don’t. Before implementing any tactic, it’s critical to know your audience and how best to reach them.
  • “Recession-proofing” – When dark economic winds begin to blow, conventional wisdom says that marketing and promotion budgets should be the first thing to go. Actually, economic uncertainty should be a cue to spend more to promote your business. While your competitors are reeling it in, you have a golden opportunity to reach out to prospects and demonstrate that you innovate even during tough times.
  • All Digital, All the Time – Cyberspace has changed the way many of us live, shop and communicate, but it also means we’re constantly inundated with electronic messages of all kinds. Don’t forget the power of the human touch; sometimes organizing an event that puts your business face-to-face with potential clients can be even more effective.

The moral of the story? All trends have one thing in common: None are very satisfying unless they really fit.

January 10, 2008 at 6:26 pm 1 comment

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