COMMENTARY: Philips - Bad Product Development Becomes Bad PR
Issue: Philips Files for a patent on a device to prevent ad-skipping
Commentary by: David
If you are reading this advertising blog, the chances are that you have already read all about the controversy surrounding Philips application for a patent on a television that would make it impossible to fast-forward or channel surf during ads, even with a digital video recorder. [You can find the facts here.] For the record we agree with the opinion of Steve Hall at Adrants, Catharine Taylor at AdFreak and Chris Thilk at Adjab - it is a bad idea. The horse has left the barn when it comes to controlling consumer behavior and coercive devices will never be accepted into the market.
More surprising than the story itself is the source. Not a press release, not leaked information from a company insider about near-term marketing plans, not even a careless comment by a senior executive at an industry dinner (remember the stir caused when Carnival Cruise CEO Robert Dickinson calling the murder of a George Smith aboard a Royal Caribbean ship ‘entertainment’ and a ‘non-event’ at a Miami conference).
All Philips did was to file for a patent. Now they have most of the blogging world in a lather. And unfortunately for Philips, this has led to a swarm of mainstream media reports and a consumer reaction against Philips.
All of this over a patent filing.
Did the Philips CMO approve the patent filing? Not likely. Did the U.S. PR agency for Philips advise on whether such a filing was wise? We doubt it. More than likely, there was a single marketing person - perhaps a product director for new products working with a team of European scientists who thought it would be wise to seek patent protection for this technology even though commercialization plans had not yet been developed or debated.
The actions of these few people, relatively obscure and insignificant from the viewpoint of the Philips shareholders could possibly have a material effect on the stock price if this story hits the mainstream media.
The real question here is - what does that mean for your company?
Our suggestion is to treat everything that leaves your office as a part of the brand - and realize that it may ultimately reflect on the brand. An angry letter to a supplier, the denial of a consumer claim, filings in a lawsuit, musings of the CEO - these things all reflect on your brand.
There will be mistakes. If your company has more people than you can know personally, there is bound to be miscommunication and different interpretations of brand strategy. When you make a mistake, however, make sure you know how to spot it and how to correct it. A couple of questions to ask yourself:
- Do You Know When Someone is Blogging Your Company? Does your company have someone responsible for tagging Technorati, Bloglines, Google Blog search and watching key blogs for mentions of your company?
- Can You Respond Quickly? A quick, professional response that is not defensive and understands the viewpoint of the consumer is the key to managing a blogsphere crisis.
- Do You Have Good Advisors? Do you work with a PR or Crisis Management Agency that understands the online world and how best to react to a quickly escalating problem?
- How Do You Prevent Mistakes? Do you have a committee that includes senior managers, brand experts, PR people, regulatory, legal and scientific advisors who screen anything that can potentially reach the consumer?
Just a few thoughts as you watch this Philips story unfold.
UPDATE: Here is the statement Philips released as pressure on this story mounted. Our take is that it will not defuse the story:
We developed a system where the viewer can choose, at the beginning of a movie, to either watch the movie without ads, or watch the movie with ads. It is up to the viewer to take this decision, and up to the broadcaster to offer the various services.
