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The Herb Schmertz Era: When Public Relations Had Some Balls

The recent passing of Rawleigh Warner, Jr., former Chairman and CEO of Mobil Oil Corp., brings to mind what many consider to be a golden age for Public Relations: the period from the mid-60s to mid-80s, when the PR profession had the mandate, the skills and the balls to stand up to criticism leveled against the organizations and people they represented.

The tip of Mobil’s public relations spear was guided by Herb Schmertz, who served as Vice President of Public Affairs under Warner (and whose credentials included a law degree from Columbia.) During Warner’s tenure, Mobil operated at ground zero of the 1970’s energy crisis, and was a primary target of the American public’s frustration over the availability and price of oil. For more than a decade, Mobil remained in the media’s crosshairs and often served as the corporate poster child for greed and unbridled capitalism.

Herb Schmertz countered public criticism against Mobil with hardball PR tactics, under the pretense that if companies don’t pro-actively participate in pertinent discussions, they deserve what they get, in terms of reputation. Under his regime of “creative confrontation,” Schmertz applied a number of innovative and controversial tactics including:

  • Introduction of modern-day advocacy advertising, or “advertorials,” which first appeared on the OpEd page of the New York Times in 1970. Mobil’s weekly commentaries, which Schmertz called “the honorable act of pamphleteering,” covered a broad range of energy related topics – the environment, oil reserves, taxation, regulation – and also took on detractors. The Mobil advertorials eventually were published weekly in several leading daily newspapers over the course of three decades, and serve as the template for what the PR profession now calls thought leadership.
  • Corporate underwriting of artistic endeavors unrelated to Mobil’s core issues, including sponsorship of the PBS television series, Masterpiece Theatre. Herb Schmertz called this “affinity-of-purpose marketing,” where audiences associate successful ventures with the companies that sponsor them.
  • Slash and burn public relations, where all communication is shut down with a media source considered to be biased or not acting in good faith. Notably, in 1984 Mobil boycotted the Wall Street Journal – refusing to provide the nation’s premier business publication with any information, to respond to its reporters, or to advertise – following what Schmertz considered to be history of inaccurate and biased reporting on Mobil. Although this over-the-top tactic was and is considered childish by many PR and media executives, it made a strong statement to the public and Wall Street Journal editors as well.

Herb Schmertz was no reckless PR cowboy. His communications philosophy was well-grounded in democratic principles, and his tactics well-reasoned and effective. In this 2-minute YouTube clip, Schmertz (who is now 84 years-old) eloquently describes how Mobil’s confrontational and sometimes abrasive public relations strategy reflected the company’s obligation, as a custodian of significant physical, human and economic resources, to maintain its role as one of the pillars of a free society.

In contrast to Schmertz-era brand management, most current PR practitioners are hamstrung by corporate legal counsel, who advocate non-confrontational PR strategies, advising CEOs to simply hunker down and wait for the storm to pass.  This enduring one-sided focus on the aversion of legal risk not only has precluded many organizations from opportunities to manage their brand reputation effectively, but has also emasculated the Public Relations profession in the process.

As the PR profession’s role is increasingly relegated to management of Tweets, Likes and unread press releases, as its practitioners continue to lose their seat at the senior management table, and as the long tail of online content extracts a heavy price for avoiding legitimate and timely confrontation, PR professionals will likely wonder why their role as architect and defender of the company’s reputation no longer belongs to them.

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5 Ways to Merchandise the “Masthead Value” of Publicity

Not to be confused with "The Wall Street Transcript"

Not to be confused with “The Wall Street Transcript”

Many companies will invest considerable effort seeking positive publicity in influential media sources, and then fail to benefit from the masthead value of that exposure.

Originally a seafaring term relating to the brass plate attached to a ship’s mainmast that memorialized its owners and builders, a publication’s masthead lists the members of its current editorial and production staff. The industry term “masthead value” can be defined broadly as the level of stature, credibility and influence associated with a specific media source. The Wall Street Journal, for example, has high masthead value; the Wall Street Transcript…not so much.

Masthead value can be relative. A respected trade or professional publication in a particular industry may have greater masthead value – in terms of its influence with a particular audience – than well known publications such as the Wall Street Journal or New York Times. For example, physicians are likely to assign the New England Journal of Medicine greater masthead value than the Journal or Times on topics relating to clinical care of patients.

Masthead value should drive your publicity strategy. A placement from a single highly respected source can be far more valuable, in terms of influence, than a dozen hits with low masthead value. Because gaining inherent 3rd party endorsement is the end goal, in the publicity game quality always trumps quantity.

Here are 5 ways to leverage media placements with strong masthead value:

  • Put high value placements directly in front of your target audiences – Even if your coverage appears on the front page of the Wall Street Journal or makes the cover of Fortune magazine, don’t assume it will be read by clients, prospects, referral sources…or even by your employees. There’s simply too much offline and online noise to ensure that any media exposure on its own will gain the attention you’re seeking. If you’ve developed an internal CRM-driven discipline to communicate directly and regularly with target audiences, then you’re well prepared to apply that distribution capability to increase the chances that decision makers will notice, remember, and respond to your high value exposure. (Lacking that discipline, your time may be best spent building an effective distribution capability, in advance of seeking additional publicity.)
  • Avoid “Hey, look at me!” self-promotion – Pickup in a media source with high masthead value provides some reason for high-fives internally, but it should not serve as a platform for self-promotion. Extreme examples of this error include companies that issue a press release, or generate Twitter and Facebook postings to announce, for example, that their CEO has been profiled in Inc. magazine. This type of over-reaction to high value publicity suggests to target audiences that you were surprised to receive the media endorsement, and therefore may not have really deserved it. The key is to showcase the media exposure in a relevant context (you may need to create this), to make the media placement secondary to the underlying content (such as the reasons why your CEO was profiled in Inc.) and to pull off these tasks with a matter-of-fact level of self-confidence.
  • Rank graphics over content, in terms of impact – Most people are surface readers. Online visitors are more likely to scan images, heads, subheads and captions, than they are to read body copy. (Long blocks of copy on websites that require scrolling are rarely read.) If you’ve earned a placement with high masthead value, you can increase the likelihood of your company being associated with the “endorsing” publication by displaying its logo with the capsule description and link to the placement. To be clear: the critical element is the logo. If your placement is from the New York Times, for example, you should replicate the logo – as it appears on the front page of that publication. Based on how people gather information, simply typing, “from The New York Times,” or a similar attribution, is about 75% less effective than actually depicting the New York Times logo.
  • Prominently showcase high value placements – If you’ve invested and succeeded in generating media placements with high masthead value, why make it difficult for target audiences to find them on your website? Rather than burying influential publicity in an obscure “In the News” section that requires multiple clicks for visitors to locate, you can amortize your investment in publicity (and perhaps improve your website’s bounce rate in the process) if you create a location for these high value items on your home page. This can be accomplished by applying a design format in which the content either remains fixed or is refreshed regularly. For formats that supply current information, extend the shelf-life of each placement by not including its publication date.
  • Cite a relevant endorsement on your home page – One of the most effective  ways to  merchandise high-value media exposure is to select a very brief, relevant phrase from the coverage, for placement in a prominent position on your home page. Here’s a hypothetical example:

“…a recognized authority in Big Data technology.”

                                                       –Wired Magazine

By limiting your publicity efforts to media placements with high masthead value, and by ensuring that those placements are effectively merchandised through direct communication, social media tools and proper website visibility, PR practitioners will spend far less time worry about the ROI of public relations. The fruits of their labors will be self-evident in tangible business metrics, ranging from lead generation to high search engine page rankings.

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BMW’s Storm Cooper: A Mini-Coup Rather than a PR Blunder?

Stormy Weather for BMW?

For a fee, Germany allows people or companies to sponsor the names of weather fronts. So last month, to promote the “wind and weatherproof” capabilities of its Mini Cooper line, BMW’s marketing agency purchased naming rights to a high pressure system that originated in Siberia.

But the Cooper storm turned out to be far more than weather forecasters and BMW expected. As the storm made its way through Eastern Europe, its sustained sub-zero temperatures were attributed to the deaths of more than 250 people.

PR industry pundits and critics have been quick to jump on BMW for its decision to associate its brand with what has turned out to be one of Europe’s most deadly winter storms on record. A headline in the Wall Street Journal announced: “Weather Deal Backfires for BMW’s Mini.”

But did it really?

Although BMW quickly and properly issued a statement saying that it regretted the weather front’s severity, and distancing itself from the deadly consequences of weather, the car company’s $400 investment in Storm Cooper may have been a PR bonanza rather than a black eye.

The Wall Street Journal’s position notwithstanding, few people are likely to blame BMW for the storm’s impact, or to associate the Mini Cooper brand with the casualties. However, if top-of-mind awareness is a beneficial marketing objective for a car company, then the exponentially greater, world-wide storm-related coverage for BMW’s Mini Cooper marque certainly won’t hurt showroom traffic or the company’s balance sheet.

In this case, the old saw, “All publicity is good publicity” may well be true. I’m confident that BMW’s marketing agency considers this a solid win, rather than a blunder.

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Using Negative Publicity as Negotiating Leverage

Shakedown of BMW of North America

The disclosure last May that Facebook had hired public relations firm Burson-Marstellar to initiate a smear campaign against Google’s “Social Circle” raised the hackles of many PR practitioners who labeled the tactic as unethical.  Although there’s no direct reference to the practice of using accurate information to disparage a competitor’s reputation in the PRSA’s Code of Ethics, it certainly can be classified as a bare knuckles strategy that most companies would not attempt.

A related behind-the-scenes tactic that’s more widely practiced (often by law firms on behalf of their clients) involves using the threat of negative publicity as a negotiating ploy. In many high-profile divorces, disputes involving celebrities or sports personalities, corporate mistakes or shortcomings, and misdeeds of senior executives, the direct or implied suggestion that unpleasant, embarrassing or damaging information will be disclosed to the media often serves as an effective bargaining chip.

Having witnessed the power of negative publicity, I decided to use it for personal advantage in my dealings with BMW of North America involving the lease of a 1992 318i, which over the course of less than a year had 27 different problems – including engine failure, faulty muffler system and a sideview mirror that simply fell off the car.  After multiple trips to my local BMW dealer, I felt it was time to bypass Lemon Laws and escalate the issue.

So here’s the strategy I developed:

  • I created a simple tombstone ad that read: “Looking for Reasons NOT to buy or lease a BMW 318i ? Call me. I’ve got 27 Good Ones for you.”
  • I drafted a press release entitled “Irate BMW Owner Places Ads in New York Times and Wall Street Journal After 27 Problems With 318i,” that detailed the car’s various issues.
  • I compiled a comprehensive list of automotive editors at every major publication.
  • I drafted a letter to the CEO of BMW of North America that said, in effect, “As a courtesy, I thought you would like to see the advertising and press release that’s scheduled for distribution next Wednesday.”
  • I FedExed the letter, the advertisement, the press release, and the editor list to BMW headquarters in New Jersey.

Two days later, I received a call from BMW’s head of service, who opened with, “Mr. Andrew. I understand you have a problem with your 318i?”

“In fact,” I responded, “I’ve had 27 problems with the car.”

“Have all of those 27 problems been fixed to your satisfaction?” he asked.

I countered with, “What is BMW’s slogan?”

“What do you mean?” he said.

“What’s your tag line, your advertising slogan, the phrase BMW uses to distinguish itself from other cars? “ I said.

He said nothing.

“Doesn’t BMW claim to be The Ultimate Driving Machine?” I asked.

His tone of voice changed. “What do you want from BMW, Mr. Andrew?”

“I want a new car.” I said.

He laughed. I didn’t.

“Here’s the deal” I said. “You give me a new car, or I place the ads and distribute the press release on Wednesday. It’s your call.”

After a very long pause, he asked, “Can you give me more time than that?”

I said, “You have until Friday. Thanks for your call.” And hung up the phone.

On Thursday, I received a call from my local BMW dealership, asking me to bring my car in as soon as possible for “an inspection.” When I arrived at the dealership the next morning, I noticed that all of the parts & service staff were wearing ties. I asked the service manager (who was also wearing a blazer with a BMW logo on the pocket) why everyone was dressed so formally. He pulled me aside, and whispered, “Mr. Andrew, I’ve worked at this dealership for 7 years, and no one from BMW of North America has ever been here for any reason. Today the head of service for all of BMW will be here, and he’s coming to look at YOUR car.”

Bingo!

Here’s what BMW offered me: If I paid for taxes and registration, they would swap the 1992 4-cylinder 318i clunker for a brand new 1993 6-cylinder 325i.  I took the deal, and never had a single problem with the 325i while I owned the car.

The lesson in this for people looking to use negative publicity as negotiating leverage, is that you must:

  1. Possess truthful information that’s likely to cause tangible reputational / brand damage
  2. Convince the other party that you have the ability to disseminate that information credibly
  3. Demonstrate that you either have nothing to lose, that you have a few screws loose, or both

The lesson in this for BMW of North America is that by dealing with me fairly, they created a lifelong customer. I believe BMW does live up to its Ultimate Driving Machine claim, and I currently drive a 2011 328xi for that reason. But the assumption BMW should have made in its negotiations with me is that there was no way a guy who was too cheap to drive one of their 7 series cars would have made good on a threat to place ads in the NYTimes or WSJournal.  I was bluffing, but with negative publicity as a card I might be holding, I won the hand.

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4 PR Lessons from the SharesPost / Wall Street Journal Fistfight

If you’re not a habitual rubbernecker of battles between companies and the press, here’s a condensed version of a recent incident that can provide some lessons for all those subject to public scrutiny…which includes just about every individual, institution and company, public or private.

On April 12, the Wall Street Journal published “Meet My Departed Grandma, Fledgling Facebook Investor” in “The Game” column by Dennis K. Berman, who as deputy bureau chief for the Journal’s Money & Investing, is no cub reporter. The column was based on Berman’s assessment of the performance of online broker SharesPost, after posing as a would-be investor using the identity of his long departed grandmother.

Following publication, SharesPost CEO David Weir voiced strong objection to Berman’s column – in a letter to the editor at the Wall Street Journal and through an aggressive behind-the-scenes campaign directed at any blog editor willing to listen – focused on the journalistic ethics of Berman’s methods, as well as the accuracy of his reporting. Public controversy has erupted over the piece, prompting insider publications including Columbia Journalism Review to weigh in on Berman’s column.

Here are some lessons other companies can learn from the SharesPost coverage:

The Press Is Not Your Friend – There will always be reporters willing to employ any available means to make a name for themselves.  Journalistic ideals espoused by Edward R. Murrow are long forgotten, and the line between news and entertainment has been blurred for decades. The Wall Street Journal and other media sources are NOT in business to make SharesPost look good…or even to report its (or your) side of the story. They’re simply competing for eyeballs.

Reporters Have Personal Agendas – Failure to recognize that reporters have opinions, prejudices, deadlines, career aspirations, overbearing bosses and overdue credit card bills often results in coverage that’s a big disappointment to those being written about. SharesPost may have been blind-sided by Berman in this story, but for many companies, their refusal to deal honestly and respectfully with a reporter can yield unpleasant results.

You Need To Suck It Up – SharesPost claimed that Berman’s column was one-sided and left out key facts, but CEOs are rarely objective and often thin-skinned with respect to the opinion of any outsider. More importantly, readers often have little interest in and pay much less attention to negative coverage than what’s imagined by the offended party. If you’re running an upstanding business, taking an occasional negative shot will not sink your ship.

It Can Pay to Make a Stink – Although SharesPost is unlikely to receive corrections, a retraction or an apology from the Wall Street Journal, its CEO was correct in making a public stink about Berman’s column. In this viral age, when the shelf-life of media coverage appears to be unlimited, it’s important to have your point of view on the record. But before you take that step, make sure your appeal is based on hard-nosed facts rather than ego or opinion, or you’ll be digging an even deeper hole.

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