Co produced with Mobium Creative Group

Controversial best-selling authors Al and Laura Ries took the stage to burst a few business marketing bubbles at the BIGfrontier Big Idea Breakfast Forum on the morning of November 1, 2002. Despite their penchant for brewing up storms of debate, the Rieses seem to have one of the clearest crystal balls in the marketing world. Al Ries coined the term “positioning” back when most of today’s business marketers were still influenced by the “Sell GRIT!” ads on the back of comic books. As the co-authors of “The 22 Immutable Laws of Branding,” “The 11 Immutable Laws of Internet Branding,” and newly released “The Fall of Advertising and the Rise of PR,” the Ries and Ries team is not shy about calling trends or making waves.

This presentation focuses on material not found in the Ries’ new books.  Attendees learned the inside secrets from two of the country’s top brand consultants on how to build a business brand.  The Ries’ conducted the audience on a 7 step tour illustrated with actual strategies and tactics culled from real world examples. 

Write up from the 11/4/2002 The May Report:

* I never thought I would be defending advertising in relation to PR, but let me take my journalist's hat off and put on my logician's cap. Al and Laura Ries gave an interesting talk on Friday morning at the BIGFrontier/Mobium breakfast event. They had everyone's attention, and for about an hour after the talk I even thought they were probably right, but then I started to think about it.

Case in point: They argue that GM has lost market share and that Chevrolet was the biggest advertiser in the U.S. "What's a Chevrolet?," Al Ries asked. "It's a big, small, cheap, expensive car," he answered. Just because you would not say to someone, "I will meet you at the corner and I will be in my Chevy," does not mean that there is no brand identification for Chevrolet.

The Ries argument is that because Chevrolet spent megabucks on advertising and their market share dropped from 34% to 28% from 1995 to 2001, therefore advertising is ineffective. There is no causal link, I would argue. This is Logic 101. If there were other reasons for the drop in market share, such as the competition from German and Japanese cars, then advertising may have kept GM from losing even more market share.

There were a lot of logical holes like that one. One logical fallacy is "post hoc ergo procter hoc" or in English, "after this therefore because of this." Al and Laura fall into that trap on numerous occasions.

If you are going to argue that PR beats advertising, you have to make your comparisons on a level playing field. Advertising can be controlled, PR is harder to control. So there are fewer examples of failed PR, but I am sure that if we look hard enough we can find some. What happened to Betamax? One example Al and Laura gave was the Hulahoop, but was that driven by PR or advertising? And what about the popular toys every year? Aren't they driven by PR or word of mouth? What about the products driven by popular movies? Is that PR or advertising? Isn't the line being blurred these days? And here is an even better question. Why is a unilinear strategy necessary? Can't one engage a branding strategy on multiple fronts at the same time? For a level playing field, you have to look at successes in both categories and failures in both categories and explain why PR works better and under what circumstances.

They argued that PR is long term and establishes a product in the mind, but that short-term advertising successes (Crystal Pepsi and Zima) did well for a short time based on ad campaigns, but then the product sales dropped off precipitously. Al and Laura leave out an important point. If those brands had relied on PR, they might have never made any sales. One example they gave of a product that does not lend itself to branding through PR was Altoids because no one is going to write about mints, they said.

Al and Laura Ries are in the business of promotion. Al is a consultant and he has made an indelible mark in the field of marketing. His books with Jack Trout have sealed his reputation as a person who has made a serious contribution to the field. As one marketing person put it to me, "He has had one idea, but that was innovative." That idea was the concept of positioning. Al wrote his first article in this area in the early 1970s. It is not as though the concept was new to the field of marketing, but Al did popularize it and present it in a useful way. Prior to that, most marketing people were talking about product attributes and benefits.

One reason this recent book, The Fall of Advertising and the Rise of PR, was written, however, is to sell consulting services. Ries is a $5K a day guy, my sources tell me. Some of the companies he has worked for include Mrs. Fields, whose Randy Fields brought him in, and now how are they doing? You see, Al, that statement is logically just as fallacious as most of your talk.

Oh, I know. Al says that marketing is not a science. That may be true, but not being a science is no excuse for being sloppy. I think that Al and Laura make a number of good points, but they overreach and overextend their argument. It would have been better for them to tout PR rather than attack advertising. They have taken on a two-fold proof which is much harder to make.

Their thesis starts with the statement that marketing is about owning a
category. If you can't own a category, create a new one, they argue. Red Bull is a good example. That was the first drink in the category of "energy" drinks.

Second, build support through PR first because it gets into people's minds better and sticks longer. And it is more credible because it comes from a third party. Then come in with advertsing for reinforcment and brand maintenance. Advertising is to hold your position.

Examples of products built by PR first and with advertising only as a
follow-on, perhaps years later, are: Red Bull, Starbucks, Botox, Body Shop, and Linux. They note that Starbucks is has spent only $10MM on advertising in ten years (their stock is running out of steam) and that Botox is advertising for the first time since its inception in 1993. They built their sales up to $350MM from nothing through PR only and are now spending $15MM on advertising.

There is a warfare analogy here, they argue. PR is like bombing first and
advertising is like sending in the ground troops. PR softens the mind and
makes it ready for advertising.

PR has more credibility, they say, because it comes from a third party. Much of what they recommend sounds like the Rosen talk about creating buzz. Their seven points to a successful PR branding campaign could have been given by Emanuel Rosen. The author of the popular book, "Who moved my cheese?" was giving the book out behind-the-scenes for three years before it was published. That is an effective PR strategy, they said. Build the brand slowly, brick-by-brick, and then you have a much stronger basis for a major launch or an ad campaign which simply reinforces what people already "know."

The problem is complicated by the fact that you cannot control the PR. An
example was given: Volvo. What is Volvo known for? Safety. But at the start, Volvo wanted to be known for durability. That did not take. Now Volvo wants to "change" its brand by introducing convertibles. Al said that they are not selling, and that this is a campaign driven by advertising, not PR. I have heard that in fact the Volvo convertibles are selling.

This raises the question: can you change your brand through PR once it is
established? Al argues that people forget, and that over time, yes you can. An example is Target, which is now called "Tarzhey" by people like Oprah and Katie Couric. So, Target is now "cheap chic."

An underlying assumption here, it would seem to me, is that you cannot get PR for a product or firm unless it deserves it. And if it does not deserve it, then presumably it won't get PR. But this does not consider: 1. bad PR, which is just as possible; and 2. PR campaigns which never take off because there is a problem with branding the product. Again, don't forget that branding is a matter of owning a category, Al and Laura argue. It is not enough to just be a little better than a competitor --- at least where PR is concerned. If all you want to do is be a little better, then you probably have to rely on advertising. One person I talked to told me that he thinks it is easier to get PR for a firm than for a product.

One flaw in the talk is that they did not deal with negative PR, and I am not talking about Martha Stewart or airplane crashes. What about products that got PR and build-up in the press and then failed in the marketplace?

They also argued that it helps, especially for a technology firm, to have a personality or leader to identify with the firm: Bill Gates, Larry Ellison, Jeff Bezos, Tom Siebel, and so forth. One person challenged them in the Q&A period on the grounds that this is a chicken and egg problem. Didn't Oracle or amazon.com establish themselves before Larry Ellison or Jeff Bezos became household names? Intel is a household name, but Andy Grove does not have to be a celebrity to make it a brand, does he? To a certain extent, I would argue that Dell is the same. What about Apple? Isn't Apple a brand without whomever is heading it up?

When I asked about Martha Stewart, Al Ries responded that this just shows the power of PR. Clever Al, but no cigar.

In the Q&A, he was asked how to handle negative PR. He did not say what To do in his answer, but he did say what not to do. He said that you don't take out multi-page ads in the papers as Merrill Lynch or Andersen did. Do what the airlines do when they lose a plane, he argued. Wait and people will forget. That is a weak argument.

Laura made the case against advertising. She argued that most ad agencies are paid to be creative, and that they are always trying to improve on what was done yesterday to justify their existence. The first question ad agencies ask a client is: "How is xyz product better?" Laura says that is the wrong question. You don't get branding by being better, you get it by being the first in a category, or more to the point, the first to own a category in people's minds.

Ad agencies are always trying to get awards, and that is why they come up
with new campaigns every year. But what do we remember? The oldies but
goodies, Laura argued. Coke is the real thing; McDonald's: You deserve a
break today. This whole line of argument did not prove their point against advertising and for PR. It only proved that the old advertising worked better than the new advertising, in my opinion.

Some of the category arguments seemed a bit contrived. For example, Rolex is the first expensive watch, but Piaget is the first luxury "thin" watch; and Mont Blanc is the first "fat" fountain pen.

I know that Jack Welch told the managers at GE that he wanted them to come up with a definition of their market in which they currently only have a 10% share and devise a strategy for building the market share to say, 25%. If you define your market narrowly enough, you can make the case that you own it. That is why Welch challenged his managers to stop playing that game. To some degree the same applies here. If you have to own a category, you may just manipulate the category to be small enough that you can own it. That is one of the pitfalls in the category argument. It is a good conceptual framework, but it does not always work. For example, Hertz and Avis. Avis has to play off of Hertz rather than trying to be its own category.

Al and Laura did tout some of their consulting jobs. One was with the country of Guatemala. They want them to change the name to Guatamaya to emphasize the Mayan Civilization, the key to branding the country. Another client: the state of Missouri. They want to call it "The River State" and hold a canoe race from Montana to the St. Louis Arch. This will cost $10MM, but Al said that an idea that gets to the board room has to cost $10MM.

Al and Laura did get people talking, even if only to question some of their reasoning and examples. (I feel a bit guilty criticizing Al because my dad who was a marketing professor used to always refer to Ries and Trout. When he died in 1989, I found the books of Ries and Trout heavily underlined with many notes in the margins in my dad's library.) I also should note that Ries and Trout were talking about this stuff long before Michael Porter came along.

It seems to me that this book is derivative in the sense that the real issue is positioning and brand definition. The methods or tactics, advertising vs. PR and other forms of communication which can be lumped under the category of PR (which is not just getting articles in the paper, you know) are a secondary issue. If you have a good brand strategy, PR or advertising will do. If you don't, you will have trouble with either.

The room was full with 200 seats taken and there were media people there, including Jim Kirk of the Trib, a guy from BusinessWeek and a few others.