Wednesday, 2 April 2014

When stuff hits the fan

Your business is doing well and then the BBC drops a bombshell. It announces that you as a retailer sold unsafe mattresses and sofas that were not treated with fire retardant chemicals that are necessary by law. Your spokesman says:

"We take the safety of our customers very seriously".


A charity is exposed for paying £ 70,000 to its chief executive, as part of his re-numeration package, for his children’s school fees. A spokesman for the charity justified the package worth over £ 200,000 per year as a reflection on “ the complexity and responsibility of his role “.

A financial service company’s wrongdoings are leaked to the press, resulting in a sharp drop in its share price. If it made an explanation or excuse, I missed it.

All these reactions were wrong and suggest they were not prepared for these events to occur.

Keynes once remarked on the need for preparedness because: "There is always enduring uncertainty"

Murphy’s law states that if something can go wrong, it probably will. Pray for it not happening but prepare for the worst.

Every organisation should have a crisis management programme in place. One that is carefully thought through, researched and rehearsed. It involves a continuous process of risk assessment and timely communication through the media channels. This means having a professional team in place prepared for if and when something goes wrong.

Then they will not make up crass statements to the press, but rather apologise, organise collection and possible remuneration, talk of the steps taken to help prevent a recurrence and seek to salvage damaged reputations.

Thursday, 13 March 2014

Don’t just tell me about the problem...

Most charities are good at describing problems they hope can be solved with your donation and support.

One describes the dangers faced by very young children and implies that these hazards can be stopped. Full stop. Another tells you of the third world children forced to drink contaminated water. A leading wildlife charity describes the plight of the snow leopard and implies that adopting one of these beautiful endangered creatures will somehow protect it.

Most will talk about their achievements on their website, but few do in the advertisements and advertisements are what potential donors see first.

It is however important to be realistic in your claims. Can children really be protected when a lot of abuse takes place in the home?

And what can be done about the number of cases in the UK of children used in sex trafficking?

Writing in the Sunday Times, Jonathan Leake and Ross Clark tell readers how to save the world’s most endangered animals. Their five point strategy involves fighting the poachers, blocking the trade at the borders, educating people, particularly the Chinese of the damage done when they buy these products, incentivising local villagers to look after their wildlife, encouraging tourism, and a captive breeding programme for wildlife parks.

Human encroachment and loss of habitat also speed the process of extinction for beautiful endangered species. Few of these basic problems can be solved by Charities.

So don’t make unrealistic claims. All they do is make the case for the cynics

Thursday, 5 December 2013

Is the Internet effective for Charity fundraising?

Can the Internet deliver donations to Charitable causes more effectively than conventional media routes such as direct mail and press advertisements?

Many fundraisers responsible for spending advertising budgets believe so.

Many experts have their doubts.

Andrew Papworth writes a regular newsletter called Harvest. His December issue has an article titled: Why you should not rely too much on the Internet.

“According to the Office for National Statistics, more than a third of women aged 65 to 74 and almost three-quarters of those over 75 have never used the Internet”.


“Elderly women are often a key market for fundraisers and they are particularly likely to be missed by online communications”.

Drayton Bird says that Social networks can lose fundraisers a lot of money. He quotes using a statistic from the 'causes' application from Facebook:

“Over the last 12 months for which figures are available just $2.5 million has been solicited in the US by 19,445 charitable organisations. That’s an average of just $126 per organisation. They would have done infinitely better using Direct mail, but that isn’t fashionable”.

The problem is the sad fact that Internet advertising is peopled by practitioners who have made jargon an art form and who use it to make the practice very opaque. Transparency is absent for many campaigns.

The initial start point was search, a digital equivalent to Yellow pages where people looking for something specific are nudged into choosing a brand or service using adwords. This market is for people who are 'engaged'.

The digital version of mainstream offline advertising such as Press or TV are leader boards, banners, skyscrapers and MPU’s. When all this started they were priced in Cost per thousand impressions or Cpm’s in the American vernacular. And initially they were expensive, as high a £25 per thousand impressions. This was clearly unsustainable because it made the cost of buying online impressions more expensive than on established offline media. Digital publishers began to offer more flexibility in terms of geographic selection, behavioural and contextual targeting but prices had to fall. Advertisers were now more interested in the number of people who clicked on to their landing page or website. The average click through rate was 0.06% or 60 clicks per 100,000 impressions, so if you were foolish enough to buy impressions at £25 per thousand you would pay £42 per click. Horrendous.

The first to offer a low cost option were the blind networks or exchanges, who took over the unsold inventory of publishers and offered these for very little but at the expense of information about exactly where the ads appeared.

More recent is re-targeting where using cookies implanted in your computer, advertisers can provide messages to people who have previously shown an interest. Furthermore these messages can be transmitted across all the devices such as mobile phones, tablets, laptops and smart TV’s. This is known as householding.

Now the accent is on trading desks, real time buying using algorithms and programmatic platforms. Some of the more informed advertisers query the excessive jargon, are concerned about the lack of transparency and are considering having their own trading desk.

The jury is still out about whether these developments will make digital medium more effective.  

Thursday, 21 November 2013

Gaining a better share of tourisms largesse

Tourism is leading the drive out of the recession. Its importance to the world’s economy is suggested by the work produced by the World Travel & tourism Council who estimated that in 2012, tourism generated 6.6 trillion dollars worldwide. This represents 9% of total GDP and a similar share of jobs. Tourism grew faster than the other economic powerhouses such as the financial, manufacturing or retail sectors.

Most of the gains are due to the belief that the bad days are over and because a resurgent airline business is making access easier by laying on more flights. Six months ago, a spokesman for IATA talked about European airlines being on a knife-edge. Now Lufthansa, Easy Jet and IAG, the owners of British Airways and Iberia have announced large profit gains for the most recent accounting periods. Tony Tyler, IATA’s Director general said:

“The strong growth of recent months, coupled with the continuing improvements in air travel demand in September, suggests that there could be a further acceleration in air travel growth before the end of the year”.

Not all of the smaller undifferentiated airlines will benefit from this trend.

People make their independent holiday destination shortlist first and easier access helps the decision process. For countries with limited advertising budgets, it helps if the national airline also promotes their country. A surprisingly high proportion do not. Sell the destination and then your differentiated, easy access service. Why else would you fly with Air Argentina if not to visit that country?  

It doesn’t have to be an airline though. Eurostar is giving people a reason to travel on its trains by promoting the hidden treasures of Paris in a charming typically gallic film commercial. See it here.

It makes you want to be impulsive and visit. And Eurostar is so convenient. 

Sometimes the favoured destination is served by a number of airlines. Price may be the major factor in the decision, but if this advantage is marginal, then flight convenience, departure airport, and perceived image matters. Skytrax rates airlines on the basis of product and service criteria. The top airline is Emirates because of the age of its fleet, quality of the website, airport service, cabin staff efficiency and friendliness and the on board product. The other podium places were taken by Qatar and Singapore Airlines.  

Airlines that don’t pay attention to all the service ideals risk being marginalised and prey for the major operators.

To see the Eurostar video in full:

Friday, 20 September 2013

Netflix and programming research

Netflix is soon to be launched onto the stock market. It will certainly be a success and part of its attraction is that it has ambitions in the TV and film production business. It understands that control of film software can be an asset to what is currently a distribution business. Rupert Murdoch adopted this philosophy earlier with huge financial gains.

Netflix already produces some original programmes, such as a TV series called ‘Orange is the new black’; a prison drama featuring nudity and sexual scenes. Recently its spokesman appeared on Channel 4 trumpeting their magic ingredient that would guarantee large audiences. This involves an algorithm and big data. Put simply the algorithm sifts through the audience preferences from their huge database to suggest the ideal ingredients for hit shows.

Forty years ago, two enterprising researchers at Masius Wynne Williams, then the second largest Ad Agency in the UK, successfully developed ‘TAPE’ which I think referred to Television Audience Preference Evaluation. It purported to predict audiences to TV channels based on their programming contents. Of course things were simpler then. In the UK we only had two channels, but the model was exported to the States where it was adopted by more TV channels and film Studios.

The problem with these models is that they can only use existing data and the key element that constitute programming success is originality. What algorithm would predict the success of ‘Steptoe and Son’ or ‘Dad’s Army’?

Raymond Snoddy, writing in MEdiaTel’s newsline, reports on the huge successes of ‘DR’, Denmark’s small public service broadcaster. They are responsible for hits that include The Killing, Borgen and the Bridge. The rest of this piece is based on Mr. Snoddy’s thoughtful report.

Morten Hessedahl is DR’s head of cultural affairs and responsible for the programmes mentioned. He says: 

“Never trust your research department and certainly do not let them inhibit your creativity. Numbers are good and reassuring, but they can only tell you about what worked in the past.

Stand behind the vision of the author at all times.

Don’t use external production houses”.

Mr. Hesserdahl is a talented, experienced and original thinker. I would trust his judgement over any algorithm invented by Netflix.

Wednesday, 18 September 2013

The importance of tourism to a nations economy

Travel weekly published a story, which claims that Greece expects to attract 17 million tourists this year. They will spend £9.3 billion and this gain of 9% has already positively contributed to the country’s still fragile economy.

The decline in GDP will be lower than anticipated. Tourism already accounts for one in five jobs and employment in this sector is growing.

The troubles in Egypt must have helped Greece. However their reduction of Vat from 23% TO 13% has made a difference to what is already an inexpensive destination.

All this has attracted the likes of opportunistic operators like Ryanair who have opened their first base in Crete. UK visitors in 2012 amounted to 1.8 million and this is expected to increase to over 2 million in 2013.

Soon the EU will approve another tranche of bail out money for Greece. They should make it conditional that part of it should be invested in tourism advertising.

Wednesday, 31 July 2013

The function of advertising for charities


Charity advertising has a number of functions.

The most common ones are:

1. To generate awareness of the charity, what cause does it act for, to make prospective donors appreciate why this need is urgent and tell them what is already being done to alleviate the condition. Awareness building also helps other more direct forms of fundraising.

2. To lobby influential bodies, politicians, corporate business leaders and financial institutions. 50% of the revenue raised by the top 500 charities come from non-voluntary sectors.

3. To raise money, ideally in the form of regular giving as well as from legacies.

As such Charity advertising is not classic direct response marketing and very rarely pays for itself directly. The return on advertising investment direct off the page or television screen averages 30% which is why fundraisers use a 'lifetime' donor value to make the investment seem more palatable. Some Charities simply justify their advertising and other fundraising expenditure by expressing this as a percentage of their total income generated from all sources.

Advertising does do more than raise money directly and helps improve responses from other areas of fundraising activity such as appeals to existing supporters, street collections, trading revenues and corporate sponsors.

Some advertising seeks to attract the attention of the people they seek to help. Combat Stress exists to help ex-service personnel suffering from post-traumatic stress disorder. War is hell but reliving its horrors every day is torture.

Well known charities can be brave and not ask for donations as the Royal Society for the Protection of Birds does in the attached great ad. It borrows the line from the movie 'Field of dreams': 
"If you build it, they will come".