What happens when one of the world’s biggest – and arguably best – brand marketers loses control?

I recently read a fascinating case of a product launch gone wrong. Or rather, more accurately, not gone at all. Here’s the story:

According to P&G, the new Dry Max diapers represent the most substantial product improvement for Pampers — the consumer packaged goods giant’s biggest global brand — in 25 years. Company executives thought Dry Max would be lauded as the iPod (or should I now say iPad?) of baby care due to its improved performance, thinner profile, and reduced environmental impact, among other attributes. Instead, the diapers got slammed by a group of critics who treated it more like the new Coke.

What happened?

Due to the complexities of roll-out logistics, the company put the new Dry Max diapers into the old diaper packaging in some markets over the summer without alerting customers to the change. This was two months before the Dry Max launch, which was slated to be P&G’s biggest marketing campaign EVER. Consumers in the early markets who felt blindsided by the change reacted strongly – complaining the new version felt stiff, papery and cheaper, and caused more leaks and rash – and they spread the negative word online to markets that had yet to receive the diapers. There were hundreds of posts on both pampersvillage.com and on diapers.com, among other places. As a communications exec and a mother-to-be, I have both a professional and a personal understanding of the sway online consumer opinion can have, especially when it comes to kids’ products. Parents trust other mothers and fathers and make buying decisions accordingly.

Some of the Dry Max critics were incredibly active. For example, one dad posted on 75 sites and wrote more than 50 posts on pampersvillage.com alone. Pampers proceeded to remove the reviews on its site as it switched to new ratings system. Predictably this caused a significant outcry, so they reinstated the posts and P&G is now addressing consumers who’ve complained on an individual basis.

A woman who started a “Bring Back the Old Cruisers” fan page on Facebook said, “We could move on and just buy the Target [Up & Up] diaper [which she said is now better]. But the principle is that they’ve slipped this inferior diaper into the existing packaging without notifying the consumer.” Several consumers who hadn’t even tried the diapers joined the Facebook page because they felt P&G was being deceptive by making the change without announcing it.

The communications and marketing lessons here all come down to a simple truth: It’s a new world. Evangelists can morph into detractors overnight if they’re not properly educated and nurtured. If you don’t actively engage in conversation, the consumer can and will take control and you might not be so happy with the outcome. We’ll never know how the marketplace would have responded to the innovation if P&G had actually educated consumers about the changes and their many benefits before slipping the new product into old packaging.

P&G believes the tone of the discussion will change when it turns on marketing support starting this month, and it very well may, but there’s no question that they’re starting with an unnecessary deficit. article

Yesterday, I attended a Public Relations Society of America (PRSA) seminar titled, “Regulatory Scrutiny of Social Media.” The speakers were attorney Michael Lasky of Davis & Gilbert LLP and Tricia Geoghegan, who oversees several social media initiatives for Johnson & Johnson.

Lasky provided a quick overview of the recently enacted Federal Trade Commission guidelines on testimonials and endorsements. The harsh reality is that marketers (including their agencies) can now be held liable for a blogger’s unsubstantiated or misleading claims. A blogger can be defined as anyone posting information on a social media channel. Geoghegan noted that brands considering their social media strategies should factor in both the marketing opportunity and their responsibility to community. While this is particularly true for a consumer healthcare company, I think all businesses can benefit by thinking in those terms.

Lasky offered tips to the audience to avoid a run-in with the law. Here’s my condensed version:

1. Encourage bloggers to disclose any material connections (including the acceptance of free products!).
2. Monitor blogs to ensure statements about your products/services aren’t misleading.
3. If you’re posting about your own company (or your client’s), be transparent about your connection.
4. “Street team” members and celebrity endorsers should also make their relationship to the marketer clear.
5. Develop written policies and procedures for employees who participate in social media.
6. Add the subject of disclosure to your media training process.
7. Ask yourself if your social media practices are likely to deceive the average consumer.
8. Seek legal counsel on new initiatives (can’t blame the guy for including a plug!).

We recently returned from an expert workshop on the topic of healthy community design that we handled for the Centers for Disease Control and Prevention. Planning started in February and we were responsible for everything from selecting the participants to setting the agenda. The objective of the event was to engage thought leaders from those professions responsible for creating the built environment (developers, architects, planners, etc.) to discuss how we can encourage the consideration of public health factors (walkability, respiratory health, access to healthy foods, etc.) when communities are being designed. In attendance were representatives from the United States Green Building Council, American Institute of Architects, Environmental Protection Agency, National Association of Home Builders, Department of Housing and Urban Development and American Planning Association, among others. We also secured Architectural Record’s Editor in Chief Bob Ivy as our moderator.

The meeting was a success. The dialogue was inspired and dynamic. And our careful planning paid off – in fact, Bob Ivy, who has moderated many similar meetings, said he’d never seen an event more meticulously organized. We’re now working on a report that summarizes the outcomes and planning a media initiative to continue building on the momentum of the meeting.

We held a meeting similar to this one in 2001 – it was a roundtable of Chief Marketing Officers from multinational and international companies (United Airlines, IBM, P&G, et al). We didn’t face any difficulties securing attendees for either meeting. The subject matter and agenda were enough of a draw. What was different this time was how challenging the communication became leading up to this year’s meeting. It seemed two factors were at play: 1) people are so overwhelmed with information that they can only focus on so much at any given time; 2) very few people have assistants these days to help them manage their logistics.

Prior to the meeting, we distributed a handful of emails that included all the event details. We were selective in what we included because we didn’t want to overwhelm our guests. Sure enough, some people would respond by answering only one of our requests (e.g. Please send us your bio; or, Are you a United States citizen?). In the days leading up to the event, people finally started to focus and that’s when the questions started to surface. In droves. Several people failed to see that we had booked ground transportation for them in Atlanta. Others needed the name and address of the hotel. There were also a lot of questions about the three-minute case study they were asked to prepare. I was constantly tethered to my BlackBerry for the final 48 hours leading up to the event.

When the dust settled, I called the agent who handled all of the travel arrangements. She had also booked our 2001 meeting. We agreed that it was much more difficult to communicate with people in advance of the meeting this time around. The degree of overload is only going to increase as we tap into new channels of information with new devices. Maybe next time we should try carrier pigeons.

At the risk of seeming insensitive: Enough already with “changing media landscape.” Let’s not lose sight of the fact that there are some truths about journalism that will likely never change. The moving or still image, for example, continues to reign supreme when it comes to storytelling.

When I first entered the PR profession, I quickly learned how important it is to provide journalists with a series of photos or photo opportunities with an announcement. At the time, I represented The University of Maryland Medical Center and we were promoting “discovery” tours for aspiring medical students, which happened over the course of two weeks. The first week, we had zero media coverage. The next week, my boss suggested I add detailed descriptions of what the kids would see on campus. A heart that had a heart attack. A hyperbaric chamber where people were treated for flesh-eating bacteria. A lab filled with mosquitoes used to test anti-malaria drugs. Bingo. That week, the local ABC affiliate dedicated a two-minute health segment to the tour and the Associated Press sent a photographer whose pictures appeared in newspapers across the region.

Fast forward nearly 15 years and the only real differences today are the proliferation of media channels for the images and the growing acceptance of citizen photojournalists. Whether you’re pitching an idea to a traditional publication or to a blogger, well-shot photography and video are key elements to placing your story. And those same assets can also fuel the social media fire if they are interesting, relevant and easily accessible.

While this may seem intuitive, we continue to see instances where organizations don’t make the extra effort to provide quality photography or video for the media. In our experience, if your imagery doesn’t effectively tell your story, you are doing your PR effort a major disservice.

Yesterday, Morgan Stanley announced it would not even attend the PGA Memorial Tournament, an event it is sponsoring in June. As the main sponsor of the tournament, which takes place in Dublin, Ohio, Morgan Stanley would typically send employees to the event and leverage its sponsorship to entertain clients. Banks can’t simply back out of their sponsorship commitments, but the current economic climate is forcing them to scale back or eliminate all other expenses related to the events. How could a company like Morgan Stanley wine and dine its clients in such a public way when it’s also taken $10 billion in federal government aid?

Northern Trust Corp., a company that received $1.6 billion through the Troubled Asset Relief Program (TARP), was criticized by lawmakers earlier this week for spending money on entertainment last weekend during a PGA tour for which the company is the title sponsor. Wells Fargo also announced yesterday that it is cutting spending on the Wachovia Championship event it inherited when it acquired the bank last December. Given the many missteps financial companies have made since receiving TARP money, it seems like Morgan Stanley and Wells Fargo were lucky to learn from Northern Trust’s unfortunate example. In the news cycle, timing is everything.

During the dot-com boom, the practice of public relations rose to a new level of importance among those in the C-suite. Creating broad awareness of a business model could lead to an IPO, which could lead to fame and fortune. While the “idea now, revenue later” time period lasted a few short years, the role of public relations was permanently elevated as was the press release itself. I remember sitting around conference room tables with executives from companies of all shapes and sizes talking about how to position upcoming announcements in order to maximize their impact. When strategizing in the early stages, clients were typically more aggressive about what they wanted to say. But, when they saw their thoughts represented in an actual release, it almost always served as a wake-up call. It occurred to me during that time that disseminating a press release is a lot like mailing wedding invitations. Once you drop them into the mailbox, you are telling the world you’re getting married. Once your release hits a wire, you’ve told the world that the company has done a deal, received funding, been acquired, etc. The new reality a press release heralds can be daunting. Simply put, a company needs to be absolutely certain it can live up to the release.

I learned a valuable lesson several years ago when a colleague of mine issued a release that was not as transparent as it should have been. A client, whose stock was trading at less than $2 a share, asked him to write and distribute a release stating that an article featuring their technology was coming out in Barron’s the next day. I can’t imagine any circumstance where we’d recommend issuing a news release about an imminent article, but this situation was particularly problematic because the “article” was actually a paid advertorial. My colleague questioned the ethics of the release, but the client insisted on distribution prior to market close, which gave him less than an hour to move. Not surprisingly, the release generated significant interest in the company, doubling its stock price in a matter of minutes. Of course, such a dramatic rise in value was a red flag to the SEC and led to a full-blown investigation that exposed the client and our firm to negative publicity.

As public relations professionals, we are in the business of building our clients up and making sure their target audiences hear their stories. But it is also our responsibility to ensure the information disseminated on their behalf is accurate and not misleading in any way, particularly if the company is publicly traded. After all, no one enjoys calling off a wedding.

About a decade ago, I came up with an “idea” of opening a shopping mall filled with stores I loved that have gone out of business. Of course, I never imagined retail institutions like Circuit City, Linens ‘n Things and Sharper Image could be tenants in my fantasy shopping center. Yesterday – a day the media are calling Bloody Monday – brought even more devastation to the retail sector and beyond. Seven companies (including retail giant Home Depot) announced layoffs on January 26th, totaling 71,400 jobs lost.

Is anyone winning the retail battle?

The list of retailers in my make-believe mall ebbs and flows, but one constant is a store that existed in The Columbia Mall in Maryland called Cedar Post. They sold select must-haves from trendy designers (e.g. Guess? and Esprit – it was the ‘80s). If they had a private label brand, it wasn’t the focus. Their retail strategy reminds me of a current store called Buckle that’s actually thriving despite the economic downturn. According to a recent article in BusinessWeek, the main secret to its success is that 70 percent of the chain’s products are from independently owned clothing lines – such as Affliction Clothing and MEK Denim – as opposed to designing and selling branded merchandise. This “shallow and wide” inventory approach enables the company to respond to the rapid changes that are the norm in the fashion industry. The chain has 388 stores and 2008 sales were up nearly 30 percent. Another trend-bucker referenced in the article was Aeropostale.

Yesterday, when I arrived at the office, I noticed a clothing boutique on the first floor of our building was cleared out. While I found it surprising that there was no notice or liquidation sale, I assumed it too was a victim of the retail meltdown. I had mentally added two (the owner and her assistant) to the 71,400 jobs lost yesterday. Imagine my delight when I found out this afternoon that she simply moved her shop to a better location where she’ll have more foot traffic.

There are clearly lessons to be learned from those who are surviving these tough times. At a minimum, they seem better prepared to listen and respond to the voices of their customers. And I – normally the eternal optimist – need to remember not to always assume the worst.

While the current economic crisis is creating a great deal of uncertainty, there are definite trends developing in our industry. We put our heads together to come up with our top five predictions for 2009. Here goes…

1. From magazines to mattresses: Media companies will overhaul their business models. It’s not news that people are becoming less and less dependent on traditional media channels for information. And, as a result, traditional outlets are receiving less and less advertising revenue. So how will the survivors continue to thrive? In March of 2009, Meredith Publishing will begin selling Better Homes & Gardens-branded mattresses. And we think a lot more of this type of drastic diversification is on the horizon. Of course, what hurts publishers also hurts advertising agencies. According to a recent story in The New York Times, agencies are now creating their own brands as opposed to solely marketing others’. So far, we’ve seen chocolates, furniture, clothing and pre-made meals. What’s next? 2009 should reveal even more business model twists and turns.
2. Smaller is better: Marketers will look to boutique agencies that can do great work for less. Every time there is an economic recession, it presents an opportunity for brands to rethink their agency relationships. In the past, we’ve seen companies consolidate their agencies to create economies of scale. And we’ve also seen even the most venerable brands open to working with smaller agencies to maximize the value they receive. What’s different this time is the depth and breadth of the economic downturn. New technologies have leveled the proverbial playing field for smaller shops that can now compete with global giants. Given the unprecedented squeeze on marketing budgets, we think companies will be more inclined to work with boutique agencies than ever before.
3. Long live YouTube: More companies will succeed using social media to connect directly with their customers. It’s no longer acceptable to brush social networking off as a fad reserved solely for the fickle youth. Barack Obama proved that more effectively than anyone in 2008. Novartis also became the first pharma (read: heavily regulated) company to launch a user-generated content contest on YouTube late last year. The Israeli Consulate even used Twitter to answer questions about the latest conflict with the Palestinians just before the New Year. We believe more companies (and governments and non-profits!) like Novartis will take the leap in 2009.
4. Traditional media outlets will continue to join – not beat – their blogging rivals. (But will it be enough?) Most traditional media outlets blog by now. Some build, others buy. Just last week, Consumers Union (the publisher of Consumer Reports magazine) purchased the Consumerist.com blog from Gawker. For Gawker, it presented an opportunity to offload one of its properties before online advertising revenues took a hit. For Consumers Union, who is not dependent on advertising revenue, it provided access to millions of younger users to whom they can sell subscriptions to Consumer Reports. We think more of these types of marriages are forthcoming. But while online advertising has been more stable than offline, how long will that last into 2009? And will bolstering an online presence through blogging be enough for a traditional outlet? To that end, we predict independent bloggers as third-party influencers are here to stay.
5. It’s the economy, stupid: Companies will try to stay relevant while Americans struggle to make ends meet. All marketers will have to be sensitive to the challenges faced by their customers in 2009. We predict companies will create messaging that shows the value of their products and services like never before. They will also show how they fit into downturn trends, such as nesting and the search for greater value. What will be interesting is to see how they do so in a way that allows a seamless transition once the economy begins to recover. We imagine a few marketers will stumble as they find their way. Remember when Wal-Mart tried to be more like Target once it realized shoppers want more than savings? Square peg, round hole.

A few years ago, I stopped at a Wal-Mart on my way to a weekend of camping in Virginia. As I walked in, a young woman walked out yelling to an older person slowly making her way across the parking lot, “They’ve got the big old pecan pies again!” A year before that, I was at a Dale Chihuly exhibit at a conservatory in Chicago when a man said to his wife, “Look, honey, those look like the flowers we saw at Wal-Mart yesterday.” Standing there among the stunning glass and rare flora, a deep discount retailer was arguably the furthest thing from my mind. Experiences like these remind me how central consumerism is to our lives. Shopping is how we entertain and often define ourselves. The question everyone is asking now is: Will the global recession we’re facing change that?

A new study conducted by Context-Based Research Group, an ethnographic research company, and Carton Donofrio Partners, a marketing firm, concluded a new “grounded consumer” will rise from the ashes of the economic meltdown. The team identified a five-stage process that consumers are undergoing as they struggle through this cultural transformation. Consumers will first have the realization that they are not what they buy. Next, they come to terms with the inherent dangers of living a life on credit. Then they begin to measure the value of their purchases differently as they start to think about the bigger societal impacts of their purchases. With that, they remove the excess “stuff” that they realize they don’t need in their lives. Lastly, the new Grounded Consumer views their life going forward as more than a series of purchases.

Consumers won’t stop spending entirely, but they will definitely spend differently. As brands step back and try to understand how their customers’ mindsets are shifting, this study presents an interesting framework for rethinking how they communicate their own value. We’re already starting to see this play out in holiday ad campaigns for companies such as DeBeers and Tiffany.

Click here to see a cool video of the anthropologists presenting their findings and to download a copy of the study.

Disclosure: Rose Communications has a strategic alliance with the two firms responsible for this study.

Bob Lutz, vice chairman of global product development at GM

This year’s PRSA conference is being held in the Detroit Marriott, which is connected to General Motors’ global headquarters.  We’re right on the river and I can literally see Canada from my hotel room window.  GM is also the premier sponsor of the conference and the place is swarming with their communications staff members, of which I learned there are 500 around the world.  This morning, Bob Lutz, GM’s vice chairman of global product development, addressed the attendees.  First of all, this guy is a terrific presenter and an unrelenting believer in the power of PR.  And he practices what he preaches.  Bob writes a blog for GM called the FastLane.  When asked how to drive traffic to a corporate blog,  he said he didn’t have a formula for that, but instead spoke to the importance of executives doing their own writing.  He said, “No one wants to read pre-chewed, pre-digested information with a heaping side of corporate arrogance.” 

In fact, he spoke a lot about the importance of writing in our field.  He said, “The state of writing is deplorable.  Nothing gets under my skin more than poor writing.”  He talked about how it infuriates him when he sees the phrase, “sneak peak.”  He joked, “You mean a stealth mountain?”  Ah, a man after my own grammarian heart.  I could tell he had at least 37 more examples, but held back.  Rats. 

He also accused corporate executives of using too many superlatives in their media materials.  This is a conversation we often have with our clients.  It’s important to resist the temptation to call a product or service best-in-class, revolutionary, state-of-the-art, etc.  Bob said, “Those types of words trigger antibodies in journalists who resent being told how or what to write.”  His recommendation, if you must use superlatives, was to do so using phrases like, ”It was our intention to create a best-in-class car.”  I’ve always felt it was inappropriate to use words in a release that no self-respecting journalist would ever use in an article.  But I like Bob’s compromise.