Revolutionary Measures

Apple bets on reputation to drive streaming success

This week’s news that Apple is expanding into multiple new markets, including TV, gaming and finance is not unexpected. The market for iPhones is becoming saturated, with revenue from iPhone sales dropping 15% in the last quarter. So, increasingly Apple wants to be seen as a services company – it already has a successfully streaming product (Apple Music) and generated $10.9 billion of revenue from services, more than from selling Macs or iPads, in Q4 2018.

The announcement is also unsurprising for two other reasons. We now live in an experience economy, where people are more likely to rent or stream products and services than to buy them. And it joins a stampede of companies that want to be the digital provider of choice, for everything from entertainment and news to healthcare and control of your smart home.

black crt tv showing gray screen

Photo by Burak K on Pexels.com

This trend is turning digital companies that previously co-existed relatively harmoniously, such as Amazon, Apple, Google and others, into competitors. Combined with the rise of Netflix, this is disrupting the business models of existing content providers/film studios, leading them to scale up (witness Disney’s purchase of Fox) to try and compete.

Apple’s glitzy launch featured a host of A-list celebrities, from Oprah to Steven Spielberg and Big Bird from Sesame Street as it promised to spend $1 billion a year on original content. However, it is up against the likes of Netflix (which spent a reported $12 billion last year), and Disney, which counts best-selling franchises such as Marvel and Star Wars amongst its properties.

So can Apple succeed in streaming? After all, its existing Apple TV service has never really taken off. There are two factors it is betting heavily on:

1.Reputation as the champion of privacy
Throughout all the storms that have hit tech companies around privacy and use of personal data, Apple has aimed to position itself as the champion of the consumer. It has repeatedly stressed that it won’t share user data with advertisers, and even refused to allow the FBI to access locked iPhones belonging to criminals and terrorists. Apple boss Tim Cook continually reiterated the focus on privacy at the launch event, and clearly it is one of the ways it is looking to differentiate itself.

2.Market power
As Oprah said of iPhones “they’re in a billion pockets”, and Apple clearly has a huge, loyal fanbase to appeal to. That’s what has driven its services success to date, and even if it can only convert a small percentage of customers to its new offerings, it will be in the money. However, an awful lot of iPhones are in markets, such as China, where the new services are unlikely to be available, while most customers already have subscriptions to the likes of Netflix. The new Apple TV+ will allow consumers to bundle some existing services (such as HBO and Hulu), but not Netflix. And while it will be available on other hardware (such as Sony TVs), making it appeal to non-Apple owners may prove difficult.

So, when it comes to services and effectively its future revenues, Apple is essentially betting on its reputation rather than the deeper content reserves of its rivals. Can it take a bit out of streaming? Whatever happens expect a long and bruising battle as more and more companies try to differentiate themselves from the chasing pack and use communications and reputation to dominate the market.

March 27, 2019 Posted by | Creative, Marketing, PR | , , , , , , , , , , , , , , , , , | Leave a comment

Elon Musk and brand safety – a cautionary tale

Consumers increasingly want to engage with genuine brands with a personality. And in many cases this goes back to the founder and CEO. Think of Apple and Steve Jobs, Microsoft and Bill Gates, Burt’s Bees and Burt. Or, as I heard yesterday on Radio 4, Gwyneth Paltrow and Goop.

battle black blur board game

Photo by Pixabay on Pexels.com

In a world where consumers are bombarded with slogans from faceless corporations, having a figurehead that they can relate to should be an excellent shortcut to drive success. And, in many ways it often is. However, one of the key factors that drives people to found and grow businesses is self-belief that whatever they do is right, and that they need to battle the world to maintain their success. Add in that the more success they have, the fewer people there are around them who are willing to tell them when they are wrong and you can see a recipe for potential reputational disasters.

Elon Musk is a classic case in point. He’s built Tesla into one of the most recognised car brands on the planet, from scratch, and helped accelerate the spread of electric vehicles. Earlier in the year the company had a stock valuation of $50 billion – larger than Ford, despite its much smaller size (and profitability).

Of course, the key phrase is “had a stock valuation of $50 billion”. Musk announced in a tweet that he had the funding in place to take the company private at $420 per share. When it turned out he didn’t he was sued by both investors and regulators. A further tweet after he was fined for this saw the stock fall further, knocking $10 billion off its value. And don’t forget this is the man that called a British diver involved in the Thai cave rescue a ‘pedo’ and was recorded smoking pot on a podcast.

So how can organisations combine the creativity, drive and charisma of a founder with brand safety? There are four ways to achieve this:

1          Trust the CEO
You could, of course, just let the CEO do what they like, Richard Branson style, but that’s assuming that they understand that there are limits to their behaviour. In the case of true loose cannons (like Musk), this isn’t going to work. In the case of public companies it is also going to make the share price gyrate on a daily basis.

2          Focus on the product
A longer term strategy is to shift the focus from the founder to the product. So while the CEO might be introducing what the company makes, they are talking about what goes into it and what makes the company special, beyond their own personality. Bring in outsiders such as celebrities to subtly shift away from a single founder – a good example is the Virgin Media ads featuring Usain Bolt alongside Branson.

3          Build a team
No one person can run a multi-million pound company successfully. Leaders need help, so build a team and make sure that they are increasingly seen in the media. They are never going to have the same appeal as the founder – for example compare Tim Cook with Steve Jobs at Apple. But creating a wider team will deflect some of the attention over time and prepare for the point when the founder is no longer around.

4          Have people who can say no
Probably the hardest thing for an underling to do is to disagree with their boss, particularly if they have built the company from the ground up. Not many employees would embrace such an almost certain career-limiting move. That means telling founders that they are on the wrong track has to come from boards, independent mentors and from creating a culture where messengers are not shot, but encouraged. This is another long-term process, but one that needs to be thought of early in the process.

Balancing the marketing value of a charismatic figurehead with their wayward side is never easy – just ask Ryanair – but if brands want to stay around for the long-term they need to be ready to outlive their founder and put in place a framework and culture that turns ‘me’ into ‘we’ without losing the brand essence and magic they bring.

 

 

October 10, 2018 Posted by | Creative, Marketing, Startup | , , , , , , , , , , , , , , , , , , | 1 Comment

What every PR can learn from Apple – good and bad

For anyone looking for inspiration for their PR and marketing strategy it makes sense to look at what bigger players are doing. Obviously slavishly copying what they do won’t work, but there are always lessons to be learnt that can benefit your brand, whatever size it is.

With CEO of Apple Inc. Steve Jobs.

So looking at Apple’s strategy over the last few years is a good place to start. It may be difficult for many people to grasp, but 20 years ago the company was in a mess, hanging on for its very survival. Founder Steve Jobs re-entered the picture, pushing through innovative new products beginning with the iPod, and then moving onto the iPhone and iPad. The result? Apple became the biggest company in the world by market capitalisation, selling millions of premium products and building a reputation as the maker of must have gadgets for huge numbers of people.

For those looking to see how Apple drove success on the PR side, there’s a fascinating Harvard Business Review article from Cameron Craig, who worked for the company for 10 years. He sums up the approach in five points:

  1. Keep it simple. Don’t use jargon in press releases, and ensure that your language is straightforward and easy to read.
     
  2. Value reporters’ time. Apple doesn’t send out many press releases (leading to complaints of secrecy). Contacting reporters sparingly does mean they’ll pay attention when you have important news – though this is easier for the likes of Apple to do compared to a startup that needs the oxygen of publicity on a more constant basis.
  3. Be hands on. Ahead of any interview Apple organised a hands-on product briefing to explain how it worked, the benefits and features. This is a great way to keep control of the conversation – again, it works better for a big player that has something reporters want than a smaller business struggling to attract their attention.
  4. Stay focused. Keep true to your mission (in the case of Apple providing products that allow customers to unleash their creativity). Don’t comment on news or trends that don’t support this as it wastes time and dilutes your message.
  5. Prioritise media influencers. Focus on the press and influencers that will shape the debate and use your time to build strong relationships with them, as opposed to taking a scattergun approach that targets hundreds of people. This is a really important lesson for businesses – it isn’t just about the amount of coverage you get, but also where it is – get into the right publications read by your target audience and your brand will get noticed.

What’s also interesting is that Apple’s PR and social media strategy seems to be changing. Ahead of the iPhone 7 launch it created its first centralised Twitter account and more information leaked out about the details of the phone. Before this, CEO Tim Cook carried out press interviews after the billionth iPhone was sold earlier in the year.

The change in strategy to be more proactive is partly a response to slowing iPhone sales, and perhaps also the well-publicised EU demand that it pays €13 billion in back tax to Ireland. Getting messages out early also allows Apple to monitor feedback and tweak what it is doing to ensure that the final launch goes smoothly and any questions are successfully answered. Whatever it may be, all companies should take a look at Apple’s PR strategy and see how they can apply the lessons to their own communications.

September 21, 2016 Posted by | Marketing, PR, Social Media | , , , , , , , , , , , | 1 Comment

Apple: Do no evil?

English: Apple. Polski: Jabłko.

The technology world, outside China, is increasingly dominated by four companies – Google, Apple, Facebook and Amazon. They’ve even spawned their own, rather ugly collective acronym – GAFA. What’s interesting is that while all four have started from different places in the technology ecosystem they are now competing with each other in areas as diverse as smartphones and mobile devices (Android vs iPhone/iPad vs Kindle/Fire), mapping, and retail (especially music).

But the biggest – and most lucrative – battleground is digital advertising. Both Google and Facebook are using the huge amount of information they know about their users, whether through searches or their social media profiles, to target adverts so that they are more personalised and therefore more effective. In a less creepy way, Amazon analyses what you’ve already bought and suggests potential new purchases.

This reliance on consumer data, has led to issues, with users complaining about their privacy being invaded for example. Others have pointed out that with ‘free’ services like Facebook, the consumer becomes the product, with their data effectively paying for the access they receive.

Up until now GAFA have been pretty united in their use of consumer data and attitudes to privacy. This has now changed spectacularly with Apple CEO, Tim Cook, launching a blistering attack on his rivals, stating that “I’m speaking to you from Silicon Valley where some of the most prominent and successful companies have built their businesses by lulling their customers into complacency about their personal information.”

If that wasn’t direct enough an attack on Google and Facebook, he added, “We believe the customer should be in control of their own information. You might like these so-called free services, but we don’t think they’re worth having your email, your search history and now even your family photos data mined and sold off for God knows what advertising purpose.”

Before we hail Cook as a white knight of the IT industry, it is worth bearing in mind four facts:

  1. Apple has complex privacy policies just like the rest of GAFA
  2. Advertising is key to a large number of the apps within the AppStore
  3. Currently the default search engine in Apple devices is Google, so the company indirectly benefits from “selling off your search history”
  4. He was speaking to EPIC’s Champions of Freedom event, where he was honoured for corporate leadership – so he was hardly likely to speak positively about data-driven rivals.

Putting cynicism aside, there are two other reasons for Apple to embrace privacy and break from other members of the GAFA pack. Firstly, it made a profit of $13.6 billion in its most recent quarter, so it doesn’t really need to upset its more upmarket customers by selling their data for a (relative) pittance.

Secondly, and more importantly, Apple is now moving into new areas where security and privacy are everything – payments (with Apple Pay) and health (with a new ecosystem focused on wearables and sensors). Both of these are based on the most personal of personal data, where a single misstep would destroy consumer trust and essentially stop expansion in its tracks. It might even harm the overall Apple brand.

So Cook (and the rest of Apple’s strategists) have made a choice. They believe that people are happy to pay more for premium iOS products, on the understanding that their personal data will not be abused. It is in stark contrast to Google’s focus on mass market, cheap or free products where consumers pay by giving up control of their information. As the battle within GAFA rages, it will be interesting to see which side comes out on top in both the PR and sales wars.

June 17, 2015 Posted by | Marketing, PR, Social Media, Uncategorized | , , , , , , , , , | 5 Comments

Taxing times for tech companies

English: Paying the Tax (The Tax Collector) oi...

Very few of us like paying tax, but there’s a fine line between legitimately reducing your tax bill and actively avoiding paying the tax that is due. And at a time of austerity where everyone is tightening their belts, there’s obviously a push by governments to close loopholes and maximise the revenues they receive.

Given their high profile and obvious success Starbucks and Amazon have both been the subject of widespread condemnation of their tax avoidance methods, and I’ve covered Starbucks inept PR response in a previous blog. Google was up before a House of Commons Select Committee last week (for the second time), backing up its claims that, despite revenue of £3 billion in the UK, all its advertising sales actually take place in the lower tax environment of Ireland. Google boss Eric Schmidt has countered that the company invests heavily in the UK with its profits, including spending £1 billion on a new HQ that he estimates will raise £80m per year in employment taxes and £50m in stamp duty.

Apple is the next company caught in the public spotlight, with CEO Tim Cook appearing before a US Senate committee that had accused it of ‘being among America’s largest tax avoiders’. Meanwhile, the loophole that sees Amazon and other big US ecommerce companies avoid paying local sales taxes is being challenged by a new law passing through Congress, with estimates of between $12 and $23 billion extra being collected.

Given the close links between Google and UK politicians (Ed Miliband is appearing at a Google event this week and Schmidt is expected to meet David Cameron on his current UK trip), the cynical view is that this is a lot of sound and fury, signifying nothing. But it does create an image problem for the companies involved, particularly at a time when we’re all meant to be in it together.

Obviously the most popular thing for companies to do would be to re-organise their tax affairs so that they meet the spirit as well as the letter of the law. But that’s not likely to happen given the enormous sums at stake. Instead expect increased calls for global tax reform (so that the organisations involved don’t have to operate the way they are currently ‘forced’ to) and a slew of feel good announcements that demonstrate the level of investment and support for the UK economy by the companies concerned. Being ultra cynical perhaps the whole tax situation explains the huge support by big tech companies for Tech City – it is simply an elaborate way of diverting attention from their financial affairs…………..

May 22, 2013 Posted by | Marketing, PR, Uncategorized | , , , , , , , , , , , , , | 1 Comment