The struggling Palm Corporation is set to team up with Microsoft to launch a Windows-based version of the Treo smart phone, marking the first time the handheld computer pioneer will sell a device based on its former rival’s software.
David Richards
The Good Guys PR Machine Is Out Spruiking Again, Does This Mean They Are Looking For A Buyer?
The Good Guys PR machine is out spruiking “positive” PR at the moment, the last time they did this the Company was trying to flog the business.
A very private Company the mass retailer has in the past refused interviews now they are seeking publicity for a business that has undergone a lot of change during the past 12 months as exclusively revealed by ChannelNews.
Under attack on several fronts The Good Guys chief executive Michael Ford has said that “The [Muir] family is focused on building this business, not selling it,”
Currently both Aldi with their cheap house brand appliances and JB Hi Fi with their new JB HI Fi home store operation are stripping business away from the mass appliance retailer who earlier this year was sacking staff and restructuring their operation.
Now Ford is claiming that the Company is dumping their discounts for cash strategy as consumers flock to shopping online where the Company is also facing online competition from the likes of Winnings appliances, Bing Lee, Harvey Norman and JB Hi Fi.
Back in February the Company retrenched Graham Roberts’s Group General Manager of Merchandise after admitting that the group which is owned by the Melbourne based Muir Family was experiencing “an era of intense competition”.
They also said that less than 50 staff had been retrenched after ChannelNews reported that the Company was also axing staff as part of their restructure.
“Pay less pay cash is in the noose now,” The Good Guys chief executive Michael Ford told Fairfax Media this week.
“It played a very significant role in building the brand but we now have to move on to recognise we’re in a fully digitalised world and the customer has all the power in their hands.”
Insiders have told ChannelNews that senior management at the Company are concerned that the Company is seen as “an old fashioned retailer” who is out of touch with digital savvy consumers.
Analysts at the The Motley Fool said that the Good Guys has 99 stores around Australia and reportedly checks its prices 5 times a day to compete with traditional bricks-and-mortar rivals Harvey Norman Holdings, JB Hi-Fi and Dick Smith.
“I imagine the company will also be comparing its prices against those on EBay as well as other online retailers such as Grays Ecommerce Group which owns Grays Online, oo.com.au, Deals Direct and TopBuy.com.au, all of which sell home appliances, TVs, computers and other products The Good Guys stocks”.
They went on to claim that “In order to compete, The Good Guys now has to offer services that the online-only retailers can’t, such as easy replacement and repairs, protection against subsequent price reductions – things that require a customer to deal with a person, rather than a website – and its working”.
The Good Guys now has sales of more than $2 billion, the equivalent of what JB Hi-Fi does in six months, about one-third of Harvey Norman’s total annual global sales and around 1.5 times that of Dick Smith’s annual sales. Sales are growing in low single digits according to Mr Ford, and The Good Guys plans to open its 100th store later this year.
“Retailers have to constantly innovate to compete, particularly as there are now many more competitors online. The Good Guys has shown that it can do that. Removing the ‘cash price promise’ is just another step in that process” analysts said.
Ford also said that 57 per cent of The Good Guys customers research products online before they come into stores and offering discounts for cash no longer guarantees a sale, particularly in an increasingly cashless society, Mr Ford said.
Price Waterhouse Coopers (PWC) in their annual Digital Shopper study, has this number as high as 82% with other retailer’s customers with PWC analysts claiming that this low number may be a reflection on the age of the customer who shops at The Good Guys.
According to the Australian Payments Clearing Association, cash use has declined from almost 70 per cent of transactions to 47 per cent since 2007, while debit, credit and charge card payments have risen from 26 per cent to 43 per cent.
“Customers have so many other ways to pay and our online prices are the same as [prices] in store,” he said. “The power has shifted from the retailer to the consumer and the consumer has become digitally empowered.” Ford told Fairfax.
What is staying at the mass retailer is their 18-year-old Good Vibrations jingle however they will drop the reference to cash discounts and come up with another tagline.
Wesfarmers and private equity investors took a close look at the company but baulked at Chairman Andrew Muir’s $1 billion asking price. Industry insiders claim that Muir made a “fatal mistake” rejecting what was believed to be a $700M + offer at the time.
Mr Ford, who has been chief executive for 11 years, said the process was a massive wake-up call for the company, which opened its first electrical goods store in Melbourne in 1952.
Recently the Muir family has been investing in new in e-commerce software in an attempt to improve their merchandise planning and inventory systems.
The new Good Guys centralised ordering system, replaces the prior system that revolved around 92 order books for company-owned and franchised stores.
The shift secured better deals from suppliers, reducing working capital, improving stock turns and availability, and unifying the product range across the group Ford said.
“The benefits are in the mega millions – that’s been critical to us,” said Mr Ford. “We had 92 different merchandise directors cutting different deals – the suppliers loved it because they got to keep their margin while we lost our margin.”
A senior Director of a Sydney based investment Company who at one stage was involved in running a ruler over The Good Guys and was involved in the recent acquisition of a major retail group said.
“It looks like the Muirs are looking for a buyer. This is a very private Company who only talk to the media when they are trying to build the profile of the Company. The last time they went looking for PR they flew in the marketing writer from the Financial Review and that was when the Muirs were in discussions with Wesfarmers. Their investment in new operational systems are essential for any retailer today and that makes sense if they are trying to set the business up for a sale”.
“The problem that they have is that they have an ageing brand that is facing intense competition. Dick Smith is about to move into appliances, JB Hi Fi is growing their appliance business and the young teenagers are not shopping at The Good Guys. They are also facing competition from Appliances Online.
It would be interesting to see whether they are actually growing their share of the market, I suspect that they have increased profits by streamlining an old purchasing and distribution system”. the executive said.
Ford claims that the investment in a new back end system has paid off in spades. While competition remains intense and consumer sentiment is “brittle”, Mr Ford says same-store sales have been growing “in the low single digits” to more than $2 billion, and earnings before interest, tax depreciation and amortisation have grown “significantly” faster.
“We moved our margins up by one percentage point – that’s significant in a $2 billion business,” Mr Ford said. “Our average invoice has probably risen 2 to 3 per cent on an annual basis despite deflation.”
Ford was keen to point out that The Good Guys is now one of Australia’s 10 largest private companies and is worth much more than it was in 2011 and that there are no plans for an initial public offer.
Earlier this year An email obtained by ChannelNews that was sent to over 100 vendors and distributors by CEO Michael Ford outlined a major restructure of the Companies buying operation. He said that Geoff Reader had been appointed the new “Chief Merchant” for the struggling group.
In his new role Reader a long time employee of TGG now oversees all areas of merchandising including Buying, Merchandise Planning, Merchandise Operations, Inventory Management, Portfolio, Pricing and Private Label.
He also announced that Wayne Jennings has been appointed Group General Manager Merchandise, reporting to Geoff Reader.
Ford said that Jennings will now oversee all the categories sold by the Good Guys.
Jennings was the former buyer for the TGG Home Appliances business.
There was no mention of what had has happened to either Graham Roberts or Paul Malcolm the former AV buyer at TGG.
Rudd’s Recession Isn’t Happening
Prime Minister Kevin Rudd’s so called recession has been put on hold according to the latest data from the Australian Bureau of Statistics who today said that the economy grew by 0.4% in the March quarter 2009.
Until yesterday most economists had expected today’s national accounts data to reveal that Australia was technically in recession, after GDP shrank by 0.5 per cent in the December quarter.
Positive balance of payments figures for the March quarter, which showed strong net exports and a 27 per cent contraction in the current account deficit, have led to revised forecasts.
In other new the Australian dollar has hit $0.82 and the Australian National Retailers Association reported that retail sales rose 0.3 per cent in April, which is a positive sign for retailers and both Harvey Norman and JB Hi Fi have reported “good” sales on consumer electronic goods during May despite severe shortages of stock including HD TV’s, personal video recorders and home theatre kits.
Will CeBit Be Axed As Show Goes Backwards?
The New South Wales Government could cut funding to the CeBit Australia technology trade show after dismall numbers for this years event say insiders.
Run by Hanover Fairs, CeBit is heavily funded by the cash strapped NSW Government. In the past Hanover Fairs which is owed by Deutsche Deutsche Messe which in turn is 50% owned by the Government of Lower Saxony, Germany and 50% by the City of Hannover, has cut shows when Government funding has been denied.
Four years ago Hanover Fairs pulled the plugs on a Melbourne based home automation and consumer technology show because the Victorian Government did not deliver funding for the show despite it being heavily supported by CE vendors.
Australia’s biggest IT event, CeBit which was held last month in Sydney only attracted some 29,403 visitors. This was down some 6,000 on the 35,173 that attended the event in 2008.
Executives who worked on the 2009 event have told ChannelNews that they do not know if the 2010 event will go ahead and that they “fear” for their jobs.
COMMENT:Why Sharp Is A Massive Basket Case
Sharp Australia hasn’t got much left in the consumer appliance market, they got out of the TV market last year, not because their TV’s were inferior but because of poor marketing resulting in a lack of uptake by consumers.
Now their appliances business is on life support as their parent Company is set to be flogged to Taiwanese Company Foxconn, in a multibillion dollar deal that could well see the Companies consumer products disappear from Australian shelves.
Sharp make extremely good products but they don’t know how to price them or market them because of a combination of poor Japanese management and local management, who don’t have a clue when it comes to delivering cut through marketing.
Sharp management have failed dismally resulting in lost jobs, and a once great brand relegated to the back end of stores.
The Sharp Australia web site which is a low cost way for the Company to market their products.
But the problem is that this site is shocking and local management, don’t have a clue when it comes to social media marketing, which in the USA is seriously driving sales for Sharp.
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Sharp Australia Intro Page
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In the USA Sharp appliances are top of mind and growing, but when it comes to online the difference between the Sharp Australia web site and the US site, the difference is like chalk and cheese.
While the Australian web site looks like something from the early days of online the US web site is engaging and designed to deliver information for consumers.
Deloitte Australia Research shows that 65% of consumers are going online to search for information prior to shopping, they either visit a retailer’s web site or go direct to a vendors site who redirects them back to a retailer to buy or like Sharp in the USA sell the product direct.
According to a recent study by e-commerce analytics company Clavis Insight, Sharp trumps its top five online competitors in the big US market, including Panasonic who are the #1 microwave supplier in Australia in five key metrics: availability, image presence, content, keyword search and customer ratings.
With 17 percent of market share by volume in 2015, according to Euromonitor, Sharp leads the pack with strong breadth and depth of distribution among online appliance retailers analysed in the study.
Specifically, at least 15 Sharp models were offered by the trio Amazon, Target.com and Walmart.com – while Target’s e-tail site carried 33.
What’s more, the brand outperformed its peers on both search performance and image presence, offering multiple product views on a large majority of its product pages.
This must be embarrassing for Sharp Australia staff who believe marketing is still about giving retailers a bundle of cash and expecting them to build the brand and market the product using catalogues, store visits and online.
Along the way they slap together some external marketing to demonstrate to retailers that they are actually conducting some form of external marketing.
Today a strong web site that promotes a brand as well as products is a critical part of any marketing mix.
Also critical is video as 63% of all transactions at web sites like Harvey Norman and JB Hi Fi are coming from portable devices such as a smartphone or tablet. Consumer today want to simply press a button, watch a video and then make a decision as to their next move.
Sharp’s problem is not about money, it’s all about deadwood.
What Sharp Australia needs is a Young aggressive digitally savvy marketing team that can ID the right products for Australia and then aggressively market them.
They need to give the brand CPR so that when it comes back to life consumers actually want to engage with the brand.
At one stage Sharp branded products were an object of pride for both Australian and Japanese consumers.
Sharp started to come unstuck in 2005 when Japanese management started to believe that the brand was invincible.
They believed that their new LCD/LED TV production plant at Kameyama was the be all of TV production plants.
The only problem was that the Japanese management was only watching the Japanese markets and not overseas markets like Australia or the UK and the USA, while at the same time they failed to capture orders from third party TV Companies to manufacture display components.
This resulted in the Company racking up massive losses.
Even while the plant was pumping out product, it was seriously in debt due to competition from other TV manufacturers, including Chinese and Korean manufacturers.
The blinkered world view that still exists at Sharp Australia today has destroyed a once great brand.
Now the Japanese are fretting at the loss of the iconic brand to a Taiwanese Company Foxconn who has made a name for themselves making goods for Apple.
at the heart of Japan’s reluctance to let Sharp be sold to Foxconn is the bile building up in the throats of Sharp management and Japanese Government official’s that the know how once owned by a great Japanese Company is set to fall into the hands of a competitor.
The anxiety comes from a deep feeling that denies the ascendance of Taiwan, China and South Korea in realms where Japan once reigned.
Japanese media never seriously discuss the fact that companies such as LG, Samsung and Haier now dominate the global home electronics field.
A few pundits and journalists have made the case that not only does Sharp’s likely sale to Hon Hai not signal the end of the world, but that it could turn out to be a good thing for Japan.
During a recent Japanese TBS Radio discussion, listeners sent in questions betraying their nervousness over the deal.
One listener remarked that if Hon Hai buys the ailing company, Sharp will merely become a “maker of goods.” Atushi Osanai a Japanese academic told the listener that, in fact, Hon Hai was buying Sharp because it admires the company’s knack for new ideas.
What he failed to communicate was the fact that Japanese Companies are making great products but they are failing dismally when it comes to marketing the products.
Sharp who does not have much of a profile outside Japan due to its lack of initiatives is doomed to becoming a supplier of components.
Japanese electronics makers “have never had an overseas strategy,” according to Osanai, unlike Japanese car makers. He claims Hon Hai will give Sharp that chance, something the Innovation Network Corporation of Japan who also been bid for the Company would not have been able to do.
Foxconn says it will not sell off any part of Sharp, though that could change once the financing dust has settled.
Japanese media say that Hon Hai wants Sharp for its display technology, but there is nothing special about Sharp’s LCDs, which have become a commodity because Sharp management were unable to sell the superiority of their panels.
In truth, it wants to get into the IOT (Internet of things) business, by producing home appliances that can connect to the Web, and for that it needs Sharp’s know-how. Hon Hai’s rival, Haier, bought General Electric’s appliance business for the same reason.
Softbank another big Japanese Companies popular robot, Pepper, is manufactured by Foxconn another fact the media rarely mentions but one that is central to the issue of Sharp’s worth to the company. “Hon Hai is just like Pepper,” said Osanai. “You can tell it what to do, but it won’t come up with ideas on its own.”
Harvey Norman + Dick Smith Online Back End Up For Sale
EBay is set to sell eBay Enterprise the owners of Magento the Company that powers some of Australia’s largest retail web sites including the backend of the Harvey Norman web site.
Among other users of the Magento retail software offering are Bing Lee, Dick Smith, Winnings Appliances and Big Brown Box as well as IKEA and several leading International brands who sell into Australia.
Private-equity firm Permira is tipped as the organisation that is interested in buying eBay Enterprises for a reported around $900 million, according to people familiar with the matter.
The deal, which was being finalized early today, could be announced as soon as Thursday US time (Friday Australian time) when eBay is scheduled to release second-quarter financial results.
EBay also plans to complete the spinoff of its PayPal payments unit on Friday.
EBay has been seeking a buyer for the Enterprise unit, which helps power online retail sites for companies such as Harvey Norman, IKEA , since at least January, when it said it also could also spin it off.
The unit suffered a blow last week when Toys “R” Us one of its larger customers, said it would take its U.S. business in-house by mid-2016.
An eBay spokesman declined to comment. New York-based Permira didn’t immediately respond to a request for comment.
According to the Wall Street Journal EBay also been in talks recently with private-equity firm Thomas H. Lee Partners LP to sell the unit for as much as $1 billion.
Resolving the fate of eBay Enterprise, formerly known as GSI Commerce, is among the final loose ends the company hoped to tie up before its new life as a stand-alone company.
The roughly $900 million price would be less than half the $2.4 billion that eBay paid in 2011 for the unit. In the hopes of securing a deal, eBay had extended the prior deadline of June 30 to Wednesday, one of the people said. The people said there was no guarantee a deal would be reached.
Siemens Sack PR Company As They Struggle To Get Traction
Siemens who late last bragged that they were set to become the #1 home phone vendor in Australia simply because they were “European” up against Asian made brands like Uniden and Panasonic have sacked their public relations Company after only a few months and appointed an unknown Melbourne based Company Greta Donaldson Publicity in an effort to crank up exposure for the struggling European brand.
iemens who late last bragged that they were set to become the #1 home phone vendor in Australia simply because they were “European” up against Asian made brands like Uniden and Panasonic have sacked their public relations Company after only a few months and appointed an unknown Melbourne based Company Greta Donaldson Publicity in an effort to crank up exposure for the struggling European brand.
The move comes as the European vendor looks to expand distribution in Australia. According to GFK Siemens has failed to take market share away from Uniden and Panasonic with several Asian made brands also outselling them in the Australian market.
Thomas Bieg a Senior Director with Siemens Home & Office said at the launch of the brand late last year that he had spent the last 12 months jetting back and forth from Europe to launch the product and he was confident that Siemens would quickly take share away from the major players because they are a “European brand”.
He also said “We have conducted extensive research and are convinced that the market is “ripe” for a European cordless phone offering. We have done a lot of work in the Australian market. We have built a team of experienced people and we are confident that with retail partners like Harvey Norman, Myer, David Jones and others that we will quickly capture share”.
He added: “We have the added advantage of having a superior European designed and made phone which we believe will appeal to Australians over yet another Asian made model.”
Earlier this week the new Siemens PR Company seems to have confused trade media with consumer media. In a release sent to consumer titles by the new PR Company Greta Donaldson they said that the new PR Company had been appointed “part of a bid to raise brand awareness in Australia”.
“There’s no better way to communicate our stylish and high-tech phones than through the word of mouth of Greta Donaldson Publicity the press released gushed. However when Channel News spoke to Siemens internal PR Manager Alexis Wheatley she seemed confused that a press release had been syndicated to the market. “I have not authorized or approved a release to out” When told that the story of the Greta Donaldson appointment had already been published on a technology trade web site she said “I am not aware of this I will investigate this”.
A short while later Wheatley came back to ChannelNews and said “I have read the story and I was not aware of it being sent out. The site is not relevant it’s not as if it is ADNews or B&T”.
When asked why trade media in the consumer technology market was not as relevant as AD News she got angry and said “I don’t like your tone and manner the site is irrelevant and we have big plans for the brand. We are launching new products and you will hear about it soon”.
Siemens Australia and New Zealand general manager for Australia and New Zealand, Dean Verberne is quoted in the release as saying of the Donaldson appointment “It’s a partnership dedicated to talking the talk,” he said.
Apparently Siemens are set to have another crack at getting traction in the Australian market. This time they are set to roll out a new Gigaset range which includes cordless and fixed-network phones, voice over IP devices, routers, gateways and software. The range even includes WIMAX devices and home media products such as set-top boxes.
An Industry insider said “The technology media market is primarily in Sydney and Melbourne based Companies struggle when they use local Melbourne based PR Companies who do not have a presence in Sydney. Another problem is that technology marketing is a mix of the specialist technology media that is extremely important when it comes to reviews and the mass consumer market where technology Companies are currently fighting to build their brand as consumers become a lot more familiar with technology in their lives. It is clear that Donaldson lacks knowledge of the CE trade market and is attempting to try and get a PR presence in the mass market at the expense of the technology based media”.
They added “Another problem is that Melbourne based PR Companies have very few technology clients and they are not dealing every week or every month with the technology writers who today are reaching millions of consumers who have fallen in love with all things technical. This includes games, mobile communication devices and TVs as well as portable music devices.”.
Linksys Roll Out 802.11n Routers
As tipped earlier this week Linksys has announced a range of 802.11n networking devices that the Company claims will deliver four times the range and up to 12 times the throughput of Wireless-G.
The move will hurt Belkin who for the last 12 months has been the only vendor selling an 802.11 pre N router, however many retailers such as Harris Technology found the devices expensive and removed them from their shelves. as they failed to sell.
The Linksys range includes the new Wireless-N Gateway (WAG300N), Wireless-N Broadband Router (WRT300N) and Wireless-N Notebook Adapter (WPC300N), the first in a line of Wireless-N products available from Linksys that will be built to the 802.11n Draft Specification.
The WAG300N, WRT300N and WPC300N promise to deliver wireless networks with the capacity to surf the web, enjoy multiple streams of high definition video, listen to digital music collections and make Internet phone calls – all at the same time.
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“The emergence of high-definition video, along with the growing use of Voice over IP, online gaming, and other applications by consumers requires network bandwidth that greatly exceeds what is available from 802.11g,” said Mike Wolf, principal analyst, ABI Research.
“With these products based on the IEEE 802.11n draft specification, Linksys is enabling users to transform their home networks into media distribution platforms and access premium content around the home over a wireless network.”
Expected to become the next standard for wireless networks, the 802.11n draft specification includes a number of mandatory features that help to improve the overall user experience.
These features include enhancements to both the speed and range of wireless networks and calls for mixed mode operation and backward compatibility.
The WAG300N, WRT300N, WMP300N and WPC300N will be available in late May or June at a recommended retail price of $379.95, $279.95, $229.95 and $229.95 respectively. Additional products from the Linksys Wireless-N family designed for both the home networking and small business will be launched in the second half of 2006.
Why The Likes Of Edelman Don’t Get Tech PR
COMMENT: The technology industry is a goldmine for public relations Companies. It’s fast moving has constant new product or upgrades and above all fierce competition between brands. But do global PR Companies like Edelman really understand wha its all about.
The answer is NO. What they do know a about is charging vendors big fees, spin doctoring and delivering media reports for vendors that actually do not report whether ones PR investment is being well spent.
A classic example is big end of town PR group Edelman who represent several vendors including Samsung. They are also the same agency that got dumped by LG 18 months ago. A recent conversation with one of their senior executives clearly demonstrated that this Company has really lost it when it comes to identifying what is news and relevant Vs a subject which they believe that they can spin doctor or as they said “find an angle on”. Here is an example of why Edelman clients should be questioning their investment in the Companies operations. Last week Josh Delgado a senior executive of Samsung’s mobile phone division in Australia gave an industry address on the mobile phone market. He revealed that within the company’s business units that generated $US57.5 billion in sales last year, Samsung’s mobile division was the largest contributor to revenue growth.
He also told the audience that last year Samsung increased its sales by 20 per cent to 103 million units to become the third largest manufacturer behind Motorola and Nokia. He even revealed that in Australia. In 2005, Samsung grew sales by 33 per cent. So is this news and relevant to the marketplace. Dam right it is. So did Edelman invite the technology media to hear the good news? No. With the exception of one or two whom in there opinion will go to an event after 6.00pm. There view was that most technology journalists are not interested in stories after 6.00pm which in my opinion is a load of garbage as I have been to many industry events in the evening attended by journalists. When approached as to why no journalists were invited or why no press release had been issued after the event. They said “We are still working out an angle for journalists. If you tell what your focus is we will find an angle for you”.
Hello, is the world round? The fact is that SmartHouse Magazine has been in the market for 4 years, its sister reseller trade publication 3 years and in that period we have constantly covered Samsung as a global brand in the lifestyle technology market and the mobile market. Yet I have to put up with some PR imbecile asking me whether what I write is relevant to Samsung. The fact is that Edelman is a classic churner. They take overseas product releases and churn them out the door to media organisations like mine and then claim credit for gaining PR exposure. Is this worth a big fat retainer? No, because we are going to cover a new product announcement anyway. The fact is that today the name of the game is getting news onto Google where everyday millions access the Google searh engine for information. Companies like Edelman don’t get this and as a result their clients suffer.
Today my business is more about web than print as it allows me to not only reach tens of thousands of people who visit our consumer web site www.smarthouse.com.au but trade sites like www.smartofficenews.com.au and www.smarthousenews.com.au.
So do PR Companies like Edelman understand the value of brand PR the answer is No, and is that a big worry for vendors, Yes, as brand PR is worth far more than product PR. In 15 years of writing about technology and churning out roughly 3,000 words a day on various technology subjects I have never once had a PR Company come to me and say that they want to talk about a brand instead of a product. The fact is that products get old and need to be replaced. Brands hang around for a long time. What Josh Delgado of Samsung’s mobile phone division spoke about goes to brand values not product PR. Consumers are loyal to brands just look at Sony. 18 months ago they were a basket case in the large screen TV market, today they are on a role with the Bravia LCD TV.
What we have today with the likes of Edelman PR is a Company that is desperately trying to churn content and hours to make money. The staff they employ may have done a PR course but most are brain dead when it comes to understanding how or what a technology media Company like mine needs to be fed. For example during the time that I ran one of the largest IT media Companies in Australia I was never once approached by a PR Company with a view to actually trying to understand how we operate or what we need. Nor have I ever had one of them approach us to organise front line work experience for their account executives who don’t have media experience.
I don’t need a PR hack between a Company executive and myself to ask a simple question of an industry executive. I don’t need them to as Edelman put it find an angle to sell to us. The fact is that PR is critical in any marketing mix but we are not here to be a cheap form of communication. Companies like Creative Technology have been churning PR for years with little expenditure on brand advertising and look where they are today. Making big losses and desperately trying to compete up against Apple, who are very much brand and PR savvy.
Right now many Companies like Edelman are telling clients that they know how to spin the PR ball to get a result, some have even resorted to editorial inserts in an effort to dress PR up as an advertising message.
The fact is that media Companies need ad revenue to survive so we are a wake up to the Companies that try using media organisations as a free party political broadcast machine to get a message up without any investment in paid marketing other than PR. At the same time we like breaking news which is something that the likes of Edelman don’t understand. We like new products and we like brand and retail stories but for many Companies the question is what comes first the PR or the advertising. In an interview recently, marketing strategist and author Al Ries pointed initially to the credibility factor in launching an unknown entity through advertising. “Relatively speaking PR has more credibility than advertising he said. That’s why a lot of advertisers have tried to run ads that look like editorial. And the media has fought back by labelling that ad with the word ‘advertisement.
He says that the problem with advertising [to launch] a brand? Is that it has no credibility. Why would you read an ad about a product you’ve never heard of? See most people say, ‘I’ve never heard of it; it can’t be anything.’ Why would you believe what’s in an ad? It’s self serving; it’s a one-sided message.”
“He’s wrong,” concluded chairman of ad agency DDB Worldwide Keith Reinhard, who dismissed Ries’s challenge to the ad industry. “Why would anyone set up a completely artificial choice between advertising and PR? Any experienced marketer knows that we use them together. Every brand is different, every brand has different needs and different targets, and so we utilise all the communications voices at hand. But to say that advertising is not an essential part of this is nuts.”
For the records I also established Weston Communications Pty Ltd which was the third largest and most profitable PR Company in Australia. We worked on brands like Shell, BMW, Avis, Dulux and Pepsico. This Company was sold to Ogilvy & Mather and was the foundation Company for what is Ogilvy & Mather PR today.
Windows Vista is next OS
The name of Microsofts next consumer operating system has been revealed. It will be called Windows Vista.
Microsoft’s next consumer operating system to replace Windows XP will be called Windows Vista. The secret was revealed in a brief video message published by Microsoft on Friday. The first beta of the software is scheduled to be released on August 3 2005. Microsoft’s next-generation operating system shed its codename early Friday when Microsoft posted a 68-second video message on its website that had the sole purpose of introducing the name of the final product:
Microsoft associates the terms “clear”, “confident” and “connected” with the new operating system, hinting to various new features of the software – including a new graphics engine, more multimedia capabilities, improved organisation of information, more security, and easier to use networking features for various devices around the house. The first beta version of the software is heading towards IT professionals and developers on August 3, according to Microsoft. The final product will be released in the July 2006 timeframe, which will be preceded by at least one release candidate (RC) and a second beta, which is rumoured to become available sometime in November of this year. According to Microsoft, the video message was taped at a recent briefing for the firm’s global sales and marketing staff.