StevenSilvers.com

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.
. . . . . . . . . .

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.
. . . . . . . .

Download a PDF of the revised FTC rules here.

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.

. . . . . . . . . . .

Latest finger-wagging brings PRSA closer to irrelevance

As it has done before, Public Relations Society of America issued another pretentious missive condemning unscrupulous flackery:

Over the last few months, there have been several news accounts of promotional tactics that signal a common thread of malpractice under the Public Relations Society of America’s (PRSA) Code of Ethics and PRSA Professional Standards Advisories (PSA). … PRSA states categorically that misrepresenting the nature of editorial content or intentionally failing to clearly reveal the source of message contents is unethical.

PRSA’s latest reprimand won’t change a thing. That’s because it doesn’t name, much less admonish, the companies and agencies whose bad behavior was made public in news reports.

PRSA sent out a similarly mealymouthed email last year, warning all members to “avoid misleading practices” like the front groups it was referring to but wouldn’t actually divulge.  That was followed by an open letter to presidential candidates Obama and McCain demanding they agree to follow PRSA’s code of ethics. Both campaigns ignored it.

You have to wonder why PRSA even bothers.

For all its authoritative posturing -- the phrase “malpractice under the PRSA code” is downright laughable – statements like this only reinforce the association's growing irrelevance within the multi-faceted, multi-billion dollar influence industry.

Pretty much nobody cares what PRSA has to say about it. Not the pros, and certainly not the charlatans.

And things will stay that way until PRSA becomes more than just another big-talk trade group without the courage to act on its convictions.
. . . . . . . . . .

• O'Dwyer's PR Blog  |  PRSA's Meaningless Condemnation

Send comments and links to scatterbox@stevensilvers.com or post here.

Judging the reputation of America's law firms

US News and World Report will launch a new annual listing of the nation’s 3,000 largest law firms.  The rankings will combine hard data with results from surveys sent to tens of thousands of private practice attorneys, clients and law firm employees. 

A law firm scorecard is sure to generate considerable fear and loathing, just as the magazine's well-known college rankings have done for years.

Two years ago a dozen university presidents went so far as to send a letter to hundreds of liberal arts colleges urging them to not complete US News’ "offensive" survey of institutional reputations, which accounts for the largest percentage of each school’s score. 

"Reputation can be another word for gossip," Washington State Trinity University’s president said at the time.  People being surveyed, she said, had no personal knowledge or experience with all of the colleges they were asked to rank.

"This is not a survey that has integrity based on objective data," she argued to media that would listen. "We are saying that we will not engage in slandering each other’s institutions or inflating each other."

No doubt many law firms will have a similar reaction to being rated based in large part on the input of competitors, bad clients and other people with agendas to pursue.
. . . . . . . . . .

To my attorney friends: What do you think of all this?  What are your PR people going to do to either stop it, ignore it or make sure you get to the top of the list?  What's the sense of urgency?  Drop me a note. I'll stay on it.

America's pundit problem

In the aftermath of Wall Street's collapse, experts are pointing to the negative impact of experts.

An Emery University study, for example, asked students to consider making several personal finance decisions.  When those students were given advice from a recognized expert, the decision-making and calculating parts of their brains simply simply shut down.

What makes this really scary is how experts are so often wrong.

New York Times columnist Nicholas D. Kristof recalls how professor Philip Tetlok spent 20 years tracking 82,000 predictions from 284 experts.  Tetlok found that the pundits were only slightly more correct than random guesses.  It didn't matter if they were doctors, politicians, economists or financial advisers.

"Indeed, the only consistent predictor was fame - and it was an inverse relationship," Kristof writes.   "The more famous experts did worse than unknown ones.  That had to do with a fault in the media.  Talent bookers for television shows and reporters tended to call up experts who provided strong, coherent points of view, who saw things in blacks and whites.  People who shouted - like, yes, Jim Cramer!"

Will past mistakes mean fewer experts?  Hardly.

Pundits are to mass media what baseballs are to the major league.  They're cheaper than staff researchers or reporters.  They compete for exposure by being available and quotable.

Most importantly, subject-matter authorities are rarely held accountable by the industry that relies on them for content.  Sometimes they're even celebrated for being so wrong.  A few years ago, the Rocky Mountain News profiled a "controversial" aviation consultant who had become an international media darling by giving "colorful" sound bites insisting that Denver International Airport would go bankrupt.  DIA hasn't lost money since it opened in 1995.

The public brain-freeze over pundits is what makes John Stewart's skewering of Mad Money's Jim Cramer so telling.  Mainstream media is full of experts laying blame for the financial crisis.  But it took a comedy show host to publicly chastise one of Wall Street's biggest media celebrities for his part in it.

Indeed, there are partisan watchdogs like the conservative Business & Media Institute and the liberal Media Matters, which recently launched a new website targeting financial news and opinion.  But these groups are politically biased in their criticisms and don't reach nearly an audience like The Daily Show with John Stewart.

But they're among the closest things we have to Consumer Reports Guide to Pundits.  And right now we need all the critical reviews we can get.

At least, that's my expert opinion.
. . . . . . . . . .

Photo courtesy Associated Press

When the past becomes today's crisis

History is one of the trickiest areas of crisis management. Even with the most sincere intentions, an organization's presentation of the past can explode in emotionally charged controversy.

Here's a perfect example:

Many veterans are fighting the Indianapolis Veteran Administration hospital's decision to remove an old newspaper from a historical display because it contained the headline, "Japs Surrender."  The hospital replaced the newspaper with one simply headlined, "Peace."

The newspaper had been on display for ten years until a new employee complained that it was offensive.  The VA Ethics Office agreed that the hospital did the right thing to avoid creating a hostile work environment.

Supporters of the decision to yank the newspaper remind people that Congress passed a resolution in 1986 acknowledging that the term "Jap" is racially derogatory and offensive.

That doesn't fly with angry veterans and others who have inundated the hospital, media and government offices with protests.

"Any Marine will tell you that, in this day and age, they damn well know the term 'Jap' is a rude and insulting remark -- that is not the issue," a decorated Vietnam vet told one news outlet.  "But you've got people here who are trying to change history."

It's a classic damned-if-you-do, damned-if-you-don't controversy.

And it's a reminder.  Your crisis plan must not only consider how you respond to events that might happen in the future, but also how you represent events that did happen long ago.
. . . . . . . . . .

Bottom photo: Historic newspaper display at Indianapolis VA hospital (Courtesy Indy.Com )

An official blog management process

If you're wondering what to include in your organization's social media strategy, take a look at the pragmatic evaluation-and-response approach outlined in this U.S. Air Force Blog Assessment Chart:

Click here for a PDF version of this chart.

Goodbye, Rocky Mountain News.

And just like that, it's gone.

Colorado's first newspaper, The Rocky Mountain News, closes today just shy of its 150th birthday.  That leaves the Denver Post as the only daily newspaper for a region that the Brookings Institution calls one of the top five emerging economic and political centers of the central U.S.

Many folks around here lament that Denver lost the better newspaper.  The Rocky won four Pulitzers in the last decade.  It ranked high among the nation's best best business sections, sports sections and photojournalism teams.  The Rocky's business newsroom in particular had a remarkable consistency, with veteran reporters who knew far more about the industries they covered than the PR people who called to shill press releases.

You don't see that much in cities our size.  Not any more.

Most importantly, the Rocky's demise means less journalism that matters.  As my friend and Rocky business editor Rob Reuteman writes in his last column:

"There will be many nooks and crannies around this town that won't see the light of day any more.  It will be somewhat easier for all manner of crooks to prosper. Corruption at all levels of government will grow some.  Politicians will escape embarrassment.  Businesses will will hoodwink their employees and shareholders. More taxpayer money will be wasted.  And far fewer people will be looking out for you.  I'm talking about trained, dedicated, experienced journalists who know what to look for and know how to get it bin front of you to read in digestible form."

We can't say when or even if anything will fill the void created by the Rocky's loss. 

In the meantime, we should look back on one of the nation's best newspapers with thanks and admiration.
. . . . . . . . . .

The skinny on government anti-obesity efforts

Can so-called "obesity taxes" get Americans to stop eating so much bad food?

Maybe.  Business Week reports that recent studies show kids weigh more if they live in communities where fruits and vegetables are more expensive.  Another study finds that the more alcohol costs, the less American consumers drink it.

With U.S. obesity rates and related health costs sky-rocketing, findings like these are helping push along the kind of government-funded behavioral change campaigns that convinced most Americans to not smoke and buckle their seat belts.

Many states already have taxes on vending machine sweets and sugary sodas.  And New York City won a key victory when a federal appeals court upheld regulations requiring many chain restaurants to include calorie information on menus and menu boards.  Restaurant owners argued that the city violated their First Amendment rights by forcing them to emphasize calories over other buying decisions like savory goodness.  That didn't go down well with the judges.

Even so, local and state governments hoping to influence healthy behavior face many challenges.  At the same time time New York City is forcing consumers to be more aware of what they eat, the state is proposing to raise sales taxes.

On health clubs.
. . . . . .

RELATED NEWS

Washington Post  |  Initiative Takes Aim At Obesity In Children

"A coalition of health groups and insurance companies yesterday unveiled an initiative, billed as the first of its kind, to help battle one of the nation's biggest health problems: childhood obesity.

Officials of the Alliance for a Healthier Generation, a joint effort of the American Heart Association and the William J. Clinton Foundation, said the initiative is designed to give children better access to health care to fight obesity. Participating insurance companies would pay for at least four visits to a dietitian and four visits to a physician each year to provide guidance to children and their parents on how to eat better and take other steps to reduce and control their weight."