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Getting caught is the new transparency and other realities of the coming year

Five truths for 2010:

The age of transparency is mostly about getting caught.

Ten years into the new media era, the institutions we love to hate – government, banks, big business, media – aren’t any more willing to tell us what they’d rather keep to themselves. The constant outing of reality TV frauds, tax-supported executive bonuses, front groups and scumbag celebrities is still a function of how Americans use the Internet to inform and entertain themselves.  Not the other way around.

Social media is getting less social.

Over time, millions of people will stop using social media sites because 1) their bosses lock them out during working hours, 2) they tire of all the commercial clutter or 3) they learn how those revenue-hungry companies are sharing their profiles, posts and friends lists.

The Rocky Mountain News is still dead.

For all the outraged hang-wringing and new ventures, media consumers in Denver and many other American cities are still only willing to support one local daily newspaper.  Barely.

Journalism, however, isn’t dead.  It’s just changing.

So-called “advocacy” media will flourish as more formerly ad-supported news outlets – or individual journalists and commentators -- become funded by interest groups, politically leaning foundations, single corporations and even government.  Whether you think it’s biased or not will depend on your point of view.

No company will ever hide its identity again.  Har.  Kidding.

Getting nabbed isn’t as certain as, say, driving through a DWI checkpoint with an open bottle of cream de menthe in your lap.  But some well-known brand out there is going to have a major PR problem when it draws the first high-profile enforcement of the Federal Trade Commission’s new transparency in marketing rules.
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The worst response is no response

Here’s a common crisis communications question: Isn’t it best for a company to stave off reporters until all the facts are known and there’s “good news” to tell?

Rarely.

Stonewalling is usually as effective in holding off media coverage as pushing water uphill with a fork.  Not only do your pants get wet but you look like a idiot.

News is going to happen with you or without you.  It doesn’t matter if don’t have all the facts. 

Executives and lawyers sometimes forget that news isn’t a conclusion.  It’s a consumer product. It gets packaged to last as long on the shelf as possible. One headline follows another as new information is confirmed or disputed, as ramifications and fall-out are analyzed.

Media don’t have to get it all or even get it right. That’s why there’s another newspaper tomorrow. Or another web update in ten minutes.

Your response becomes an aspect of any ongoing crisis or controversy story. Sometimes it becomes the story.

To not participate in negative news is death by a thousand paper cuts.  You force reporters to discover information, opinions and perspectives that will be rushed out, regardless of whatever contentions you have about accuracy or context.  You likely just prolong and make more convoluted the bad publicity you’re trying to avoid.

Does that mean you have answers to every question?  Of course not.  But there’s a huge difference between hiding from the press and making a sincere effort to explain why you can’t answer a specific question, or why it isn’t appropriate for the CEO to be interviewed now.  (But don’t say that “lawyers” won’t let you talk about things you’d otherwise be eager to explain. This will come back to bite you.)

Engaging the news media during an emerging PR crisis or controversy – including to respectfully decline comment – builds a foundation of credibility, even if you screwed up. You are acknowledging the legitimacy of the story and the media’s job. And that might buy you some breathing room to produce facts as quick as you confirm them, or at least be given the opportunity to respond to information and opinion before it’s rushed out there.

Good news or bad news, the rule is the same.  Say only what you know to be true.  But say it. 

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Bad News Friday usually makes things worse

Even in the always-on Internet era, many companies and government offices still rely on the old trick of waiting until late Friday afternoon to release bad news.

In most cases they're just making things worse come Monday. Here's why:

You stop nothing.  People who care most have news alerts, stock tickers and other Internet tracking gizmos to get your stuff the second it hits the fan. Your stock will still move in after-hours trading guided by speculation and negative expectations.  Media outlets will still run breaking news, except this time you’ll be covered either by reporters who know to dig for whatever you’re trying to hide or by inexperienced weekend reporters who don’t know the situation.

You create a new credibility issue.   Maybe ten people on the planet won’t perceive that you tried to bury bad news on Friday afternoon. You risk creating a whole new PR problem with stakeholders and media for thinking they don’t see you trying to sneak out the back.

You dig a deeper hole.    Friday-night announcements don’t make bad news go away.  They create a 48-hour vacuum for people to assume the worst. Some will interpret your move as a signal that there’s still another shoe to drop. You could be in a worse defensive position on Monday morning as you reopen the doors to angry shareholders, anxious employees and reporters working on follow-up pieces about your company mishandled a crisis.

You still announce on Monday anyway.  Assuming you’re somewhat successful in burying your bad news over the weekend, you’ll have to deal with the response on Monday from people seeing the news for the first time. Now you’re dealing with two sets of responses: the people who are just hearing it, and the people who saw and reacted to it over the weekend.

Bad News Friday isn’t a secret, it’s bad public relations.

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Corpcomm chief Snyder to leave Frontier Airlines

Frontier Airlines corporate communication chief Steve Synder is leaving the company to join ProBuild, the nation’s largest supplier of building supplies.  Steve makes the transition in mid-November.  Good luck, my friend.
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A business primer on the new FTC transparency rules

Representing its most sweeping action in 30 years, the Federal Trade Commission’s new rules governing endorsements and testimonials will change how marketing is done.

Here’s what the Guides Concerning the Use of Endorsements and Testimonials in Advertising say:

ACCOUNTABLE FOR BLOGS AND SOCIAL MEDIA.

The FTC already directs online reviewers to disclose if they’re being paid by advertisers. Under the new rules, however, every blogger, Twitter user or social network member must disclose any “material connection” with a company, product or service.

Taken literally, this connection could result in fines for bloggers who fail to disclose anything from getting a sample can of chili in the mail to having a spouse who owns company stock. While consumer advocates support the guidelines, some prominent bloggers argue that the rules in effect force them to disclose every business relationship they’ve ever had.

Enforcement is another matter. The FTC says it will primarily go after the advertisers rather than individual bloggers, though it will take into account how companies encourage transparency in their paid reviews and freebies. Beyond that, the agency will decide matters on a case-by-case basis – which basically means they’ll know deceptive advertising when they see it. What makes things even more convoluted is that the agency doesn’t say by what means it will handle these situations.

Given that the new transparency standards for bloggers are higher than what’s required of commercial news media and politicians, the FTC rules are generating considerable debate among marketers and social media proponents alike. Stay tuned.

ACCOUNTABLE FOR TYPICAL RESULTS.

Ads that feature individual consumer experiences with a product will have to state clearly what kind of results everybody else can expect. Soon to be history are those ubiquitous ads that whisper “results not typical” while showing some guy who lost 300 pounds drinking vitamin shakes.

ACCOUNTABLE FOR EMPLOYEES.

Employees that promote their company or its products online must “clearly and conspicuously” disclose who they work for.

The FTC urges that companies have social media policies as one way to avoid fines or other actions when employees pretend to be someone else – say, a happy customer or invigorated shareholder.

Keep in mind, however, that a recent Deloitte study found that a third of all employees don’t even consider what their boss might think before posting something online.

ACCOUNTABLE FOR CELEBRITIES AND RESEARCH.

A warning to every company that uses movie stars, retired quarterbacks and 70’s sitcom actors for promotional tours. Under the new FTC guidelines, both advertisers and their celebrity spokespeople can be held liable for making false claims as part of a commercial endorsement.

The ramifications are huge. Celebrities making the rounds of late-night talk shows, state fairs and Twitter feeds must disclose their business relationship with any company or agency that’s paying them to pump movies, books, products or even charities.

Companies that quote research must also disclose if they paid for the studies, or if they have any business relationship with the organization that did the research.

These standards go way beyond front groups and hidden clients. From now on, any failure to disclose corporate affiliations could be considered deceptive advertising. That’s going to hit a lot of marketing PR campaigns.
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Download a PDF of the revised FTC rules here.

Former Rocky finance editor to leave the country

Former Rocky Mountain News finance editor, reporter and columnist David Milstead will be leaving Denver to join the Globe and Mail, Canada’s Toronto-based national newspaper. 

The Rocky Mountain News was shut down in February, just shy of its 150th birthday, leaving the Denver Post as the city’s only remaining major daily.

Good luck, David.
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Industry expert asks if Toyota's image is getting a free ride

Auto industry veteran Frank Sherosky asks if Toyota’s stellar reputation for quality is more a result of good image management than what really happens on the road.

CBS News reported that a former Toyota lawyer has filed a federal racketeering suit against the company for “ruthlessly” conspiring to hide evidence about hundreds of roll-over accidents in which the roof caved in.  The potentially damming case was filed in late July but took more than two months to make the news.

“In that respect,” Sherosky writes in the Detroit Auto Examiner, “it's hard not to at least question the media for bias. Does Toyota own a free-pass card in the press, when American companies like GM, Ford and Chrysler get slammed all the time?”

Toyota denies the allegations and says its former in-house counsel violated attorney-client privilege with his lawsuit and in the consulting work he did after leaving his job with a $3.7 million severance package.

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Scattered links of interest

Twitter’s ROI (Forbes.com)
There is a potential danger in that too many people will employ Twitter as a short-cut for customer service.”

Prepare now for “resume tsunami” (Ogilvy Impact)
“With a variety of signs pointing, if somewhat tentatively, toward an economic recovery, it’s not too soon for companies to begin thinking about how they’ll keep their top performers.”

We need a swine flu newsroom (Newsvetter)
“In matters concerning life and death I don't want to be forced to rely (solely) on a news media obsessed with body counts and hot zones.”

PRSA’s meaningless condemnation (O’Dwyer’s Blog)
“…How about revealing the source of your anger? Who in the world are you talking about?”
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Submit links to scatterbox@stevensilvers.com

Six standards for employee use of social media

PR lawyer Michael Lasky summarizes four key principals to include in company policies for how employees may use blogs, Facebook, YouTube, Twitter and other social media:

• Respect for intellectual property … Avoiding plagiarism and copyright infringement.
  
• Standards of truth … Attributing information, knowing the difference between fact and opinion.
  
• Confidentiality … Knowing what can be made public via the Internet, and what should be protected.
  
• Common sense … Using the same rules that apply to memos, emails, press releases, web sites and other company communication.

While these are broad enough to cover most concerns, I would also make sure that your social media standards address these two important areas:

• Transparency … That official communications will not be misleading, disguised or anonymous.
  
• Accountability … That the company will protect stakeholder interests by tracking social media use and content, and that employees will be held responsible for misrepresenting or maligning the company on the Internet, even if they do so on their own time.

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CEOs won't say Twitter and other contradictions about the hottest social media thing since the one before it

What a time.

Four years ago, a BusinessWeek cover story said blogs will change your business and influence the course of civilization just like the invention of the printing press did more than five hundred years ago.

Now a Time Magazine cover story announces that Twitter will change the way we live .

At this rate we should expect another planet-altering social media tool by Labor Day.

That is, unless you don't think a free online short-message service rastes with our generation’s revolutionary information technologies: voice mail, cell phones, the Web.

You’re the people who think Twitter is the Internet-era version of the CB radio fad. 

And you don’t believe that hot hype will take precedent over the cold realities of the marketplace.

In "Ten ways Twitter will change American business,"  Time’s writer predicts that the ability to send and selectively receive 140-character Tweets will give business, politicians, media, investors and other interests the ability to “engage” people like never before. For example:

“Twitter … will increasingly become a place where companies build brands, do research, send information to customers, conduct e-commerce, and create communities for their users. Some industries, like local retail, could be transformed by Twitter… having the opportunity to tell customers about attractive sales and new products can be done at remarkably low cost while providing for greater geographic accuracy.”

The problem with this vision is that it assumes consumers will do four things:

… One, that they'll stay fixed on reading and writing Tweets all day long, day after day.

… Two, that they’ll want to receive product announcements, promotions, surveys, celebrity restaurant orders, contests and other sponsored messages, at every turn of their day.

… Three, that they’ll overlook the intrusive advertising and spam that will increasingly pollute their legitimate news and conversation stream.

… And four, that they won’t mind how Twitter reserves all rights to sell any information it has on them so others can identify, locate or contact users.

Consumers don’t behave this way.  They won’t for Twitter.

Twitter’s problem is that the Internet has no walls.  There are no beachheads to dissipate the relentless waves of marketing and campaigning.  We hear anecdotes like how a suitcase company responded to a customer who Tweeted about his broken handle.  But take that scenario a few years from now – if that long – and that same customer will be inundated by followers, followees and interlopers Tweeting everything from luggage deals and discount travel to political fundraisers and pleas to help some secret princess transfer money. 

Nobody says Twitter doesn’t have huge potential for mass communication.  It does. The Iranian election aftermath shows how microblogging can facilitate real-time citizen-journalism.  But the same holds true for misinformation and propaganda.  The bad guys know how to use Twitter too. 

That's one reason corporate America isn’t exactly clamoring to get on board. And Twitter's goofy dot-commish name itself alienates the service from thousands of CEOs already averse to social media.

In fact, big brands see less value and more risk in associating with any Internet free-for-alls.

Consider YouTube. Time Magazine reports that despite drawing 99.7 million viewers watching 5.9 billion videos, YouTube's content is overall so bad that marketers have become reluctant to embed their messages within it. 

After paying $1.65 billion to own it, Google told investors that YouTube is "not material,” making the Web’s third-most popular destination also one of the ten biggest technology failures of the last decade.

It's a stretch to think Twitter will do better.  It doesn’t even own the micro-blogging concept, and several competitors already offer more features and open-sourcing.  RSS inventor Dave Winer, who PC World calls the father of modern-day content distribution, went so far as to predict that Twitter is the next Netscape.

As for the 29 million users, new research also suggests that Twittermania may have already peaked:

• 90 percent of all Tweets come from only 10 percent of all Twitter users. (Harvard University study of randomly selected sample of 300,000 Twitter users)
  
  
• Though 99 percent of Generation Y -- age 18 to 24 -- use social media, only 22 percent of them use Twitter.  (Pace University study for Participatory Marketing Network)
  
  
• 55 percent of Twitter account holders have never posted a Tweet and 56 percent aren’t following anyone.  53 percent have no followers. (HubSpot analysis of 4.5 million Twitter accounts over nine-month period)
  
  
• 60 percent of Twitter users quit after the first month.  (Tracking from Nielsen Online)
  
  
• Twitter’s growth came to a screeching stop in May, growing by only 1.5 percent.  (Tracking by Mashable)

Then there’s the Oprah factor.

Well over a million people signed up for Twitter in the first 72 hours after Oprah featured the service on her show.  But as Silicon Valley Insider reported, Oprah is already bored with it.  Despite having 1.56 million followers, Oprah herself follows only 14 people and Tweeted just four times in June. 

So what are we to make of all this?  I agree with InternetNews columnist Mike Elgan, who thinks Twitter is simply leveling out to what it really is minus the hype. 

“It’s no longer a new frontier, an elite club or a culture-transforming medium,” he writes. “It's just a service for sending messages.”

And you can get mine at Twitter.com/StevenSilvers.  Or at least until I move on to the next big thing.
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Also read:  No, social media doesn't actually sell anything. And no, you can't afford to ignore it.