Archive for September, 2007
September 17, 2007 at 1:51 pm · Filed under Media Industry, Social Media
Beth Comstock started her career in TV in Virginia - and was once head of GE’s head of communications. She led GE’s marketing and has now moved over to President, NBC Universal Integrated Media. Her discussion is focused on the view of new media from a media company’s perspective.
Today is the golden age of media - very exciting but also chaotic. On their PCs while watching television and reading a magazine. This overflow can keep us all up at night.
“Continuous Partial Attention” - everyday we have a sliver of a person’s attention. Every day we use 12 hours of media (compared with 7.6 hours of sleep and 9.1 hours of work).
When a new technology hits 40% of the USA households they are considered “mainstream.” Most recently video games went mainstream. Video-enable cell phone services at only 3% of households.
Generational change is happening with new technologies. Great slide with the various generations and asked them, what technology can you not live without? Boomers can’t live without TV (62%), but Gen Y can’t live without cell phone (64%). Gen Y can live without newspapers, magazines and books (12%) versus Boomers %54%).
In the world, USA is 24th with broadband penetration - whereas Korea is 1st (94% of households). Major growth in streaming video - how does that threaten television? New segments of the market are being defined - such as iPod Video. Some specific consumers like the mobility and it seems to be a growth, versus a cannibalisation. People use it to catch up on their viewing (a la TiVo). But it also allows people to keep in touch with the brands they are passionate about (like NBC’s show “Heroes). “The pie is getting bigger. The segment is growing,” said Comstock.
Developing new, premium video product that allows users to subscribe to downloadable and portable video.
Trends? First - the consumer is more in control. Technology is here and I want to be part of it. Interaction is not enough. They want to be in the middle of the company - take NBC’s content, mash it up and develop something unique. Video is liberated and its going everywhere. In Shanghai there’s a fashion company that created video in a belt buckle. “I’m just not sure how you watch it,” quips Comstock to audience laughs.
Mobility and personalisation - you watch TV in bed and I’ll download the game. Video is following music - why you’ll pay $3.99 for a personalised ring-tone but only 99 cents for the full song. Because the ring tone is personalised!
Micro personalisation: I want news right down to my neighbourhood. Community is personalised in a whole new way - such as the woman who has a Yahoo! Group studying 17th century Irish literature. There aren’t dozens of members - there are thousands.
Web 2.0 makes way for Web 3.0. Great to see AWPS members attending the tutorial on Web 2.0. What is that? The ability to connect and interact - social media, communities.
Web 3.0 means knowing us intuitively as consumers and serving the information we specifically need. We won;t have to search for the information we want - it will find us. Greatest development coming out of Japan, Korea and China. There the trend is convergence of mobile phones and Internet.
Beth is particularly interested in on-line gaming and virtual worlds. Fastest growing segment of on-line gaming is women 25 to 54.
What’s fascinating are the growth of the economies in virtual worlds. People paying virtual money to get virtual goods (eg, new sword). Economist estimated the GDP of the virtual world is between $7 and $12 billion (more than GDP of Bolivia). This year first Second Life Millionaire - she created real estate and then sold it on and traded it for money in the real world. It’s still small only about 1,500 people a month make $500 to $800 per month. Yet this is a trend to watch.
Ubiquity - we are always connected. We’ll find value when and how we connect and filter through all the options.
New research: Who is using the Internet and how? Demographics are not about age and sex - instead it’s how you use your time on-line. They divide by six segments:
- Info Hounds - connected all the time and want to know first
- Life Managers - I need to get stuff done: Book holidays, do banking. The Internet is their connection to getting work done. “I come to the Internet because I have to get stuff done - and I want to have a little bit of fun,” said Comstock. “Let them manage but then let them escape.”
- Escapists - I’m not taking a cigarette break but I need to get out a little.
- Self Expressers - Self-professed experts empowered.
- Creators - Less than 10% of user base, will create their own story, their own video
- Connectors - Helps me stay in touch with my friends and families.
The messaging and content varies depending on users.
“Surfing is so over,” said Comstock. We go to the same five sites every day - we don’t surf the Internet.
The vision of NBC Universal: Know viewers so well, we serve content they don’t even know they like yet…a world where content follows the viewers.
This does raise privacy issues.
Three principles:
- Be completely consumer-centric
- Gather insights at every step
- Create unique experiences that are right for the medium
NBC Universal acquired iVillage - a social community connecting predominantly women. This was a site to connect with one another, so making the connections was more important. A robust community is TTC - Trying to Conceive. Even a community called “Target-aholics” for people who love shopping at Target!
The community is influenced by several people who drive the tone, content. NBC Universal has 2,500 community leaders who act as the regulating system.
Everyone talks about this - but few people do this and understand it. NBC Universal created a “living room of the future” to give people first-hand opportunities. There are different modes and how people use new media (Voter, Theorist, Insider, Artist, Blogger, etc).
One recent program NBC Universal ran was very successful - The Ultimate Search for Bourne. A tie-in with Google and You Tube to have people seek for Jason Bourne on-line.
What does it mean as communicators? We should be trend-spotting experts. We need to go to where the users are - we can't wait for people to come to us. Just advertising on FaceBook isn't enough. You have to seed this as far and wide as possible. Make great content and put it where people can find it.
"No one in this room's job just got easier with all these tools," said Comstock.
September 17, 2007 at 12:44 pm · Filed under Globalisation, Public Relations
Debjani Deb is focusing on outsourcing and the impact on communications. How do you take advantage of this trend? And how do you manage communications?
First track the advent of outsourcing: Started with a drive for arbitrage of labour and raw material in manufacturing. The second was the extension of the customer base - new audiences to sell products to. The third was the growth of services - English-speaking professionals to do back-office services efficiently, cost-effective. The fourth - and today’s trend - is the extension to knowledge services. Can we get our analytics done in China and Inda.
Some examples: In the 1980s, WalMart began setting up procurement centres in China. That led to local outrage in the USA. Nike sets up manufacturing off-shore and deals with issues of worker conditions in China.
In the 199os, the focus is on the extenstion of the footrpint for new consumers. In 1995 KFC expands dramatically in India then pulls back. Outrage because of the oil used to fry the food included pork fat (an insult to local religion). In 1996 McDonald’s opens its first stores in India - and today is a destination restaurant for the elite of the country. That impacts communications dramatically.
Today the growth of telecommunications means we have more options for back street services. One challenge was Dell with the outsourcing of moving its call centres to India due to the problems of accents. How do you control the perception of quality? You can change the quality issues, but addressing the perceptions is harde.
The outsourcing market in India today is $70 billion - and that’s growing with knowledge work today. Pharmaceuticals is growing fast with a lot of knowledge work being undertaken in India.
From a communications perspective, how do you take advantage of it as a communications professional? How do you convince internal stakeholders that this may work? Finally - where does the value shift stop?
When it was manufacturing the argument was the loss of blue collar jobs meant the growht of white collar jobs. But now that white collarjobs are being outsourced this adds a whole new challenge to communications.
Many services: legal, engineering, medical, software, marketing, advertising, pharmaceutical. So many areas now able to be outsourced.
Next phase: Can high touch/customisation, high value roles be outsourced (eg, McKinsey)? Debjani believes no. Instead low customisation, low value starts. But the next phase is high customisation and low value services. EmPower offers:
- 24/7 media monitoring
- Measurement and audit on demand
- Competitive intelligence
- Market and trend analysis
In conclusion, how do you balance business needs versus sentiments of nationalism? How do you balance price and quality? Perhaps build appreciation among stakeholders for total value creation, versus the shift from one centre to another.
September 17, 2007 at 12:27 pm · Filed under Globalisation
Geoff Davis leads Unitus and is sharing perspectives on global poverty. Quick question: Have you ever met someone who lives on $2 per day? Davis is an entrepreneur who used the sale of a successful business to start a micro-finance company. He asked the question: How can you use business skills to solve poverty issues?
We see disease, unemployment, lack of nutrition - and poverty is the core. But if we take a “Problem” mindset then you see short term solutions. But Davis took a “Solutions Mindset” and set up mirco-financing firm Unitus. She used the proceeds to send her child to school - the first child in her family’s history to attend school. This started the cycle to get her family out of poverty.
BUT - many problems. Over 10,000 micro-finance institutions around the world - most with under 2,500 clients. A highly fractured market - but one with huge potential.
Unitus was started to bring many of these together (Unite + Us). Wanted to ramp up growth considerably, and also change from a “donor model” where people give and don’t contribute. Now the goal was to partner with many small micro-finance companies to grow 100%.
Unitus launched a private equity fund to provide more funds for the micro-finance companies. They also offer technology, HR, business systems to help.
Now work with 17 joint ventures serving 2.5 million households (growing 140% per year).
What’s micro-finance? Most loans are $100 to $500 loans for productive purposes, such as purchase of bamboo to weave baskets, or buy a water buffalo to make milk. Traditional loans are made on personal liability - but in micro-finance you ask for group liability. Make the group of friends or neighbours sign on together to borrow funds. The repayment rate is 95% whereas in the USA credit card repayments are 93%.
Geoff’s first loan was to a woman for $35 - she wanted to buy a thermometer to pasteurise goat’s milk and sell the milk for double the price. She went from making 70 cents per day to $1.40 per day.
To date there are many success stories, such as SKS India. The involvement of Unitus has led to a dramatic growth in the families they can serve.
Trends in micro-finance:
- Start of “For Profit” micro-finance - but using the prfitable business model to enhance their ability to better serve their communities.
- There’s been a growth of commercial investors (Citigroup is one).
- The capital markets are kicking in with a firm in Mexico launching and now with a US$2.5 billion market capital. (This is no longer the purview of philanthropists - this is going mainstream and creating a distribution channel).
- There’s a whole ecosystem - credit companies, payment firms, companies that know how to work with the poorest of the poor and launching new products (crop insurance, life insurance, savings products)
“Capital is starting to see poor people as having inherent value,” said Davis. Economic empowerment means starting to see value in a poor woman in Africa - that’s a dramatic reversal.
September 17, 2007 at 12:04 pm · Filed under China, Globalisation, Public Relations
Hard to wake despite an 11 hour sleep - the alarm went off at 11:00 pm Sydney time, making it an early California morning. Thankfully Linda at The Ritz-Carlton hotel was willing to find the espresso machine and make a double to start the heart.
The first session is entitled, “The Impact of Globalisation.” A panel has been invited to address the issues. They include:
The focus of this panel is on Asia Pacific, with an emphasis on China and India.
Dr Lieberthal began the address, “Challenges Presented by China and India.”
Dramatical reductions in costs of transportation and communications has fundamentally changed the way we do business. The re-schaping of the world through globalisation has happened with leadership from the West. But as China takes the lead and India grows we’re getting new perspectives.
China’s record is fantastic - 10% growth in GDP every year since 1978. Some argue it’s as high as 13% to 14% per annum. Foreign trade has increased 30% per year every year over 30 years. The increase last year alone was larger than all of India’s foreign trade. China now has largest foreign trade reserves of any country - ever.
China is working hard to be the point of final assembly, and move up the value chain to be adding higher value. Much of this has been driven by the five-level political system, where national encourages regions to grow GDP, etc. This has made it a highly competitive system where all territories are cometing to grow. The Chinese Communist Party has used competition and reward to drive growth across the country.
China has welcomed growth and is willing to undertake social changes as a result. Yet India has not been willing to make similar changes. “China has been willing to break some domestic eggs,” said Lieberthal. China is exceeding because they started in 1978, whereas India did not begin until 1991.
In India, change is accelerating and growing. English is spoken with total fluency, world-class technical and managerial systems, deeply-rooted politcal systems, and dyaspria spread across the globe yet still connected to the home country. Media is pushing for continued economic reform.
Inidia invests more in infrastructure than any other nation one earth.
What does this mean for mulitnationals? Both countries are important but in different ways.
India provides outsourcing opportunities and are starting to compete globally. The government is usually the problem, not the solution.
In China there are major domestic market opportunities. If you’re not involved in China as a global manufacturer your competitors certainly are. China cannot be ignored and the pressures the country places on changes in the global economy make it impossible to ignore.
How do MNCs treat China today? Many enter with products developed elsewhere and make minor modifications and sell them domestically. There is also a use of CHina manufacturing.
Yet six major issues are changing the way MNCs interact with China - ignore them at your own peril.
- Managing Reputational Risk: Many companies have multi-level supply chains in China (contractors with sub-contractors, etc). This exists in an environment with inadequate regulatory environment - the economy is growing too fast). Poor business ethics. “Let me change that - no business ethics,” said Lieberthal. The economy has grown to fast and there were no business ethics to begin. Drive for low cost and terrible corrpution. Leads to environmental and safety issues, as well as product quality.What does this mean for companies? First, who is part of your company - contractors lie to inspectors. Second, how do you set up corporate communciations to manage reputation irsk. Bad news travels immediately -sometimes by Chinese competitors work to spread the bad news. How do you protect yourself with inadequate law enforcement? Someone is hurt and they’ll sue your MNC. “The deep pockets are not in China,” said Lieberthal.How far is it reasonable to push cost savings? Suppliers are keen to get the business.
The brand “China” has poor reputation and it can bring your company down.
- Relations between China Team and Global Business Units: China management need to have the resources to get work done - so they need authority to act. How do you manage the relations with head office leaders? Leads to challenegs with authority - they make decisions fast. How much of the decision-making do you devolve - and will you get good quality decision? In Lieberthal’s opinion no MNC has solved this to their full satisfaction.
- Product development: Typical MNCs bring in products developed elsewhere and make minor modifications. There are costs to sticking with that approach. It limits your customer base to the top of the pyramid. For you to get a broad customer base you need to drive 60% to 70% of the cost out of your product. There is an enormously large middle market - that is mainly owned by Chinese companies. They use this knowledge and expertise to then attack the top of the pyramid. So how do you compete for the mass market? Deeply research the problems in the market from a Chinese situation. Then specify the price point that any solution will need to be to achieve mass market penetration. Then turn it over to your Chinese team. The implications are very disturbing. You want to use technology to drain cost out of the price point of your product - not to add value or enhacements. China and India are vital sources for new products that are developed locally and then can be exported globally. Then you have to find ways to leverage your knowledge globally. How do you do this - when most MNCs are set up with IP and systems developed at WHQ then deployed globally, versus top-up. You may need to base a mjor division in China.
- HR Issues
How do you instill HR systems that deal with corruption, teamwork, quality. Employees join your company and have no prior experience with any of these issues. How do you recruit experience - when there’s no grey hair in China? How do you identify and leverage the pertinent cultural differences? If you don’t resolve then you’ll fail to leverage your people. You need to build your training programs from the bottom up (HR training assumes employees bring a lot of skills).
- The Business Model Change: MNCs are used to operating using the “Washington Consensus” -”the west knows best” is the old model. Now are we heading towards a “Beijing Consensus”? China is succeeding without using the typical Western model.
- Challenge of Shifting Centres of Initiative: Globalisation started in the West. But now China and India are using technological innovations to create disruptive business models. You can’t assume the West will remain the only centre of technological development. The shift in attitudes is already being seen in areas such as IP.
Conclusions: Implications of the rise of China and India. Major impacts of international supply chains, differences in human capital, environment, speed of innovation.
More important China sees its success and sees it as the rightful new power in the global economy. The old “West is best” model is being superceded with a shoft towards the East. Global competition is changing - and this impacts corporate communications dramatically.
September 16, 2007 at 8:53 pm · Filed under Public Relations
The annual conference is held in a large salon on the first floor of The Ritz-Carlton Hotel. Odd to be back in the same ballroom 16 years later – I’d flown here in September 1991 with client Toshiba to coordinate a dealer award trip and event. Funny how life takes you around the world and back again to the same spaces, the same places. The overall conference focuses on the role of the Chief Communications Officer and their interaction with the CEO. A dedicated research paper is being discussed There includes a focus on social media, with a hands-on workshop available in an adjacent salon. It will be interesting to see the trends and sites they discuss – look for more on that.
Introduced by Roger Bolton, president of AWPS & Sr. Counselor, APCO Worldwide. He says the Society has grown to 363 members. Conference coordinator is Peter Debreceny. Here’s a second small world story – Peter and I worked together in 1995 when he was in Melbourne and I was in Sydney – both of us at Edelman Worldwide in
Australia.
Peter says California is a leading centre for technology, arts, entertainment, science – it’s a natural place to come to look at the digital revolution. “
California has been a crucible of innovation and change,” said Peter Debreceny, chair organizer. With new technology everything is visible to everyone – this reinforces importance of values and trust within the corporations we serve.
Cathy Babington, Vice President – Public Affairs, Abbott (
Chicago) introduced Miles.
Beyond the bio, a friend and a colleague of 20 years – hence the trust needed to be a top communications officer.
“When you’re given the privilege of leading a company you need to leave it substantially better than you found it,” per Miles White. Under his leadership for nine years quite significant development and growth. Cathy says, “He’s one of those CEOs who gets it – reputation is a top five strategic priority for Abbott.”
Here to address the subject of the changing environment for CEOs and how we can better support them. Miles D. White, Chairman of the Board and Chief Executive Officer, Abbott – “Guerillas in the Mist – Winning the War for Reputation.” CCO is in a challenging point – we take all the bad news, the undefined hours, last minute demands, etc. Has been serving as CEO for past nine years – scarred and battle hardened CEO who has not succumbed to total cynicism. Still optimistic after all these years. “Our world has changed dramatically. We’re in a new war – we’re in a battle for our identities, for our corporations, for our missions, for our reasons for being. In a high stakes battle for business – political and ideological. Attacking the foundations of our businesses. It is a much bigger war and battle than we have given it credit for. “Today we are in an all out war for reputation. An asymmetrical conflict – a large force with all the resource are engaged with loose-knit guerilla group who can challenge us effectively for the hearts and minds of our constituents.
“In this war of ideas the CCO is the right hand of the CEO. Why? Information is no longer reserved for the information elite. Low cost and ease of access for all – the digital revolution.. “Ability to create and disseminate false, misleading information by anyone. A myriad of new stakeholders – everyone is empowered to engage us on terms of quality. Don’t need access to AP or Reuters, don’t even need rules (or values – they often don’t). They are not held to – or aspire to – authenticity.
“Can have high reputation with their audiences. They can establish credibility. “The reality of the global economy – the roller coaster of the stock exchanges that ripple through the days. Here’s what it means as a CEO of a targeted industry- Our issues go public quicker – from a back room blog to the evening news in one day.- Solve your problems in the full glare of the public spotlight.- Is “tell the truth” too simple? The guerillas have a lot more latitude than companies do – not bound by the same ethics and social weight. They can largely do whatever they want to do. Disinformation has the half-life of krypton. Your role as CCO is to protect the identity of your companies. We as CEOs are counting on you to be much more participatory than ever before. Try not to get into the hole – you can dig out with a lot of time, energy and money. Head off problems before they happen or before they explode in the public. The best ones anticipate well and respond even better. Now a handful of examples of companies that handled these issues well.
- Abbott has been in AIDS medicine since early days of the epidemic. Invested more than $100 million in AIDS relief in the developing world. Assailed by AIDS activists, religious orders, student groups – pursuing Abbott. New military government in
Thailand decided they didn’t want to pay Abbott prices. So they seized patent-protected drugs and started to manufacture them in their for-profit state-owned pharmaceutical manufacturers. Instead this was an attack on Intellectual Property. So Abbott decided to take it on as a battle.
- Johnson & Johnson and the American Red Cross entered into strife over the trademark of the red cross logo (which J&J owns). So of course J&J was slammed in the media while the Red Cross was seen as the victim. Red Cross was licensing the trademark to other competing pharmaceuticals. J&J started a blog – “You’re Doing What?” Blog allowed the company to discuss in new media what old media would never have covered. Terrific example of how to avert a crisis by using new media.
- McDonald’s taken on by “Super Size Me.” The company didn’t take on the issue fast enough and didn’t think it was serious enough. Response was made at the ultimate end of public relations – a change to business practice. McDonald’s got serious about healthy menus, eliminating “super size” meals, getting into exercise for children. “I think McDonald’s made lemonade out of this,” said White.
We can use these same tools to get our messages across. “We used to have these vehicles and weapons to ourselves.” This is about competing to define us as an enterprise. There is a competition about identity and others are trying to define us in their terms. I think we can be back in control. Figure out how to be guerillas. And win by doing it with principles. “We are at more risk if we take the conventional route. We are better off learning to play a new game – we take our risks on new vehicles, new methods. If you get success you get more courage. The more small risks we take the more success we have the more we’re able to win.
“Normally we’re on the defensive, but many times you need to go on the attack. Some NGOs challenge Abbott to publish all the places it donates – we ask them to tell who are their contributors (generic manufacturers, trial bar lawyers). They back down.”
September 16, 2007 at 6:07 pm · Filed under Public Relations
I flew to LA last night to attend the annual conference of the Arthur W. Page Society. I was invited to join in 2001 when I led global communications at Ford Credit. To become a member you have to be the chief communications officer at a company with US$2 billion revenues plus. Once you’re in you’re in for life.
Their annual conference is being held at a swank hotel on the edge of the Pacific Ocean (the other edge - not Sydney but California).
Tonight’s keynote speaker is Mr. Miles D. White, Chairman of the Board and CEO of Abbott - a global pharmaceutical company. Click the link above - it’ll take you to Forbes where you’ll see Mr. White’s take-home pay. He sits on numerous boards and is Chairman of the Federal Reserve Bank of Chicago.
I’m sneaking in this PC and will blog during the conference. Check in in an hour to see what Mr White has to say…
September 13, 2007 at 9:41 pm · Filed under Uncategorized
Setting up a new company means the development of your own “look and feel.” There’s no better firm in Sydney to help you achieve that than popomo. Part of the new company design is standard (logo, colours). The other part is a strong image - the senses. I’d be interested in your feedback: good, bad or indifferent!
September 10, 2007 at 10:17 pm · Filed under Climate Change, Australia
Never underestimate the power of words. The pen is mightier than the sword is a stock quote many repeat. Yet I am also driven by powerful imagery - especially when it condenses complex thoughts into immediately undertandable terms.
Watch this short video for a stunning example of powerful communications. (Thanks to my friends at Carbon Planet.)
September 10, 2007 at 9:43 pm · Filed under Australia
The poor opinion polls for Prime Minister John Howard unleashed a torrent of speculation. The Clash song has to be top of mind…
Darling you gotta let me know
Should I stay or should I go?
If you say that you are mine
Ill be here til the end of time
So you got to let know
Should I stay or should I go?
(Thanks Lyrics Freak!)
September 10, 2007 at 1:08 am · Filed under Australia
The circus has left town. Three days, 21 world leaders, one city. And for the effort Sydney will be remembered as a police state, where a man leaving to enjoy lunch with his 11 year old son was arrested for jaywalking. He'll have his day in court, though - as he did have his day in jail (sorry - only 22 hours of imprisonment without access to a lawyer).
Home-town paper The Sydney Morning Herald says we’ve been living under martial law.
That same publication has a great photo on the cover today. Amazing how one image conveys so much. 
After APEC Prime Miniter John Howard expected to climb in the polls. Today’s results show he’s dropped even further. It’s bad news - and he knows it.
APEC paid a dividend much like an Australian bank when you've overdrawn your account - charges, fee, debits galore!
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Beth Comstock started her career in TV in Virginia - and was once head of GE’s head of communications. She led GE’s marketing and has now moved over to President, NBC Universal Integrated Media. Her discussion is focused on the view of new media from a media company’s perspective.
What’s fascinating are the growth of the economies in virtual worlds. People paying virtual money to get virtual goods (eg, new sword). Economist estimated the GDP of the virtual world is between $7 and $12 billion (more than GDP of Bolivia). This year first Second Life Millionaire - she created real estate and then sold it on and traded it for money in the real world. It’s still small only about 1,500 people a month make $500 to $800 per month. Yet this is a trend to watch.
