Month: July 2006

I had missed Lord Saatch’s recent pronouncement on One Word Equity – the idea that in the future, you will only be able to communicate your brand with a single word. My thanks therefore to Ray Snoddy in this week’s Marketing magazine for drawing this to my attention.

As Snoddy says, if this is the case, you better make sure it is the right word. For example, he claims the current Labour government can be currently summed up by a single word: Prescott.

According to Lord Saatchi, Google currently owns "search" while Apple owns "innovation".

Interesting that the two examples he mentions are technology brands. Nevertheless, if he is right, then it raises some interesting implications for marketing and PR. If you have a brand that owns your desired one word, then perhaps we’ll see the emergence of press releases containing a single word (what more do you have to say?). Perhaps journalism will turn into penetrating analyses of the meaning contained within these single words. Snoddy did point out that Saatchi needed 2500 words in order explain his theory of one word equity.

Saatchi’s theory also claims that only a single company can own a word. Given there are around 750,000 words to choose from in the English language, that presumably means that you can’t have more than 750,000 brands (and lets face it, only a small proportion of these words would presumably have any meaning worth "owning" by a brand. Or perhaps companies will re-engineer their product and service offerings in order to own a unique word – Aardvaark anyone?)

Still – it does allow one to play a little game to see which companies might conceivably own a word already – or which one they ought to have.

Anyone care to offer which words the following companies should own?

Microsoft
IBM
SAP
Oracle

A story in today’s PR Week about a publishing PR firm that allegedly got fired for "overpromising on the coverage it could deliver".

Brighton-based Raft PR apparently promised Cyan Books author David Kean that he would get 17 pieces of coverage for his new book: How Not To Come Second: The Art of Winning Business Pitches. The agency apparently included the Financial Times and The Times in its list of sure fire media placements.

However, none of the coverage ever appeared.

According to Kean: "There was a litany of broken promises. One by one, the promised articles disappeared."

Its hard to believe that there are agencies out there still "guaranteeing" press coverage – especially in titles like the FT. Anyone in PR knows you can never with 100pc certainty "guarantee" that you will get a story published. Let alone that it will be relentlessly positive and "on message."

Having said that, one does wonder about the naviete of an apparently experienced business writer believing that a PR person will magically generate a glowing review of his book in the FT – and 16 other places. And on a budget that probably wouldn’t buy you a medium size latte at Starbucks. If it were that easy, we’d all be doing it.

As a final piece of advice to author Kean – perhaps he might gain at least one sale for his book from Raft PR – looks like they could do with help in winning business now they have lost this particular account.

According to today’s PR Week, an initial consideration of 5.5 times pre-tax profit is reasonable at present.

In which case, as detailed here previously, some very big agencies would only be worth a few thousand pounds – most people with an average credit card limit could therefor pick them up.

Even the most successful ones (which may well have top line revenues in the millions) only have pre-tax profits around the 100K mark – so would be worth around 550K.

The other curious omission from the PR Week piece (which ostensibly tells you how to go about selling your agency) is the lack of reference to earn outs. Any agency sale will be done on an earn out basis ie as the seller, you will be expected to stick around for at least 4 – 7 years and hit certain targets before you get your cash.  So when agency is sold, for say, £5m, the principals can’t just run off into the sunset. Essentially, the acquirer will pay them out of profits they earn themselves anyway.

It would be interesting to track PR agencies that have been sold in the last 10 years or so to see whether or not the founders ever got the cash they thought they would – now that’s a feature worth reading in PR Week….