Discover more from The 21 Hats Morning Report
Does PR Have a PR Problem?
An industry veteran says too many firms are more focused on getting that retainer than on the needs of their clients.
Here are today’s highlights:
Employees are happier in their jobs than they’ve been in a long time.
There might be a pretty straight-forward solution to the debt-ceiling crisis.
Live shopping is off to a slow start in the U.S., but a handful of companies refuse to give up.
The lack of office workers continues to have ramifications, including on upscale hotels.
You should demand more of your PR firm, says an anonymous industry veteran: “He says economic uncertainty has been a catalyst for shoddy communications practices, agency jumpers, and flash-in-the-pan marketing moments as opposed to sustainable brand building. In recent years, fragmentation across the digital media landscape has put a strain on client-agency relationships as clients expect more than earned media and communication strategy, according to PR pros. Per the industry veteran, the communications industry has seemingly cut corners to keep clients happy, maintain business relationships, and keep money flowing into the company. For the vet, it has forced him to widen his agency’s capabilities to meet client needs, specifically for the B2B tech companies he works with, which go beyond earned media and into strategy, he said.”
“The strategy work not being done upfront is the killer for why we have bad campaigns, why people say PR doesn’t work. It’s because you’re skipping over the strategy.”
“So all the work that PR agencies should be doing, and I’ll say this very boldly, they don’t want to do it because they’re A) not equipped to do so. B) They have no reference of how to do it from peers or competitors. And C) they want that check deposited as soon as possible. Anything that delays that check and hitting the bank, they won’t do it.”
“PR people have to not think of themselves as PR people. They have to look at themselves as comms strategists, strategic communicators. Public relations, as a term, almost needs to go away for people to view all that it offers and can do. It needs repositioning.” READ MORE
Michael Girdley has a simple point to make about entrepreneurs and litigation:
Workers are happier in their jobs than they’ve been in decades: “Job satisfaction hit a 36-year high in 2022, reflecting two effects of the tight pandemic labor market: The quality of jobs improved as wages and work flexibility increased, and workers moved into positions that were a better fit. Last year, 62.3 percent of U.S. workers said they were satisfied with their jobs, according to new data from the Conference Board, up from 60.2 percent in 2021 and 56.8 percent in 2020. The business-research organization polled workers on 26 aspects of work, and found that people were most content with their commutes, their co-workers, the physical environment of their workplace and job security.”
“Among the happiest workers: people who voluntarily switched jobs during the pandemic and individuals working in hybrid roles with a mix of in-person and remote work. Men’s satisfaction was higher than women’s in every component, especially in areas such as leave policies, bonus plans, promotions, communication, and organizational culture.”
“Brad Hershbein, senior economist at the W.E. Upjohn Institute for Employment Research, said: ‘Mid-career people, people with kids, seem to be benefiting a lot’ from recent shifts in work, especially hybrid and remote arrangements that allow for better work-life balance.”
“Meanwhile, pay increases have been more pronounced in lower-wage jobs such as warehousing, retail, and restaurants, improving many workers’ views of those jobs, Mr. Hershbein said.” READ MORE
THE DEBT CEILING CRISIS
The Economist says default is no longer unthinkable: “Most of the time, the impossibility of America defaulting on its sovereign bonds is taken as a fundamental axiom of the financial system. The country issues the world’s reserve currency, so investors always stand ready to lend it money. And if you are able to borrow more, you can pay back your debts. Yet Washington is once again reminding the world that, through sheer mulishness, a default is indeed possible. Every now and again—as in 2011, 2013 and today—America smacks into its ‘debt ceiling,’ a political device that places a hard limit (currently $31.4 trillion, or 117 percent of GDP) on gross government borrowing. Congress must then agree to raise or waive the ceiling in order to prevent the Treasury from failing to make bond payments or meet spending obligations. This time Janet Yellen, the treasury secretary, has warned that the government may run out of cash and accounting maneuvers as soon as June 1st. And so on May 9th, congressional leaders gathered in the Oval Office with President Joe Biden for the very first stage of negotiation. They are a long way from a deal.”
“Consider what a default would mean. Short-term Treasuries, or T-bills, are the closest thing there is to a risk-free asset. This makes them a favorite of corporate cash managers (who want an ultra-safe return) and any trader needing to post collateral (which must hold its value and be easy to sell).”
“If the government stiffs corporate treasurers, companies will miss payments to one another and the wheels of commerce will grind to an agonizing halt.”
“America’s politics will prevent an early deal, and it could well take the markets freaking out to force one at all. Default remains the least likely outcome. But as investors are acutely aware, it is no longer unthinkable.” READ MORE
What would happen if the president simply ignores the ceiling and continues to pay the nation’s debts? “Given the stakes, it’s important to explore the likely consequences if Mr. Biden ignores the debt ceiling — how doing so would affect our economy and the markets, our retirement savings and even our constitutional system. There is encouraging news for the president and those who follow our first Treasury secretary, Alexander Hamilton, in believing we must pay our legally incurred debts. We are far better off doing so, even if it means short-term chaos should Mr. Biden allow the June 1 deadline to come and go.”
“The best-case scenario in this situation is that Mr. McCarthy’s caucus recognizes it has no legal case and its bluff has been called and that it gives up the tactic and passes budget legislation to which the Senate and the president can ultimately agree. This is unlikely but not impossible.”
“But suppose the Republicans take the president to court nonetheless. What then? Assuming the courts didn’t refuse to hear the case on justiciability grounds, the challenge would certainly receive expedited review, given the magnitude of the matter. During the brief time the issue was being litigated, we’d see the beginnings of some of the nightmare economic scenarios sketched above.”
“It is exceedingly difficult to imagine Chief Justice John Roberts (who famously upheld Obamacare in 2012 and after) or Justices Neil Gorsuch and Brett Kavanaugh, let alone the court’s Democratic appointees, demanding default — especially if the aforementioned financial tremors have already begun.” READ MORE
These companies are betting that Americans will eventually take to online shopping: “Poshmark is one of many companies racing to break into the United States’ nascent live shopping market, which is estimated to bring in $32 billion in sales this year, according to the retail consulting firm Coresight Research. Eyeing the live shopping market in China, which, by comparison, is projected to bring in $647 billion this year, American companies have for years poured money into the medium, where people buy and sell products in real time over video. But American consumers have yet to take to live shopping in the same way.”
“Alongside Poshmark, QVC’s parent company Qurate recently started Sune, a live shopping app targeting Gen Z. Last year, Walmart, YouTube and eBay added or expanded their live shopping features. For Prime Day, Amazon recruited celebrities like Kevin Hart to promote its Amazon Live platform.”
“As big tech and major retailers work to gain a foothold in live shopping, start-ups like Whatnot and Ntwrk are touting their tight-knit customer communities as a blueprint for live shopping in the United States. Investors poured more than $380 million into livestream e-commerce companies in the United States last year, up from $36 million in 2020, according to PitchBook.”
“For Paige DeSorbo, a podcaster and influencer on the Bravo reality series ‘Summer House,’ hosting her own show on Amazon Live allows her followers to see a ‘totally different’ side of her personality.”
“‘People trust me on certain things, so they want my opinion on whether it’s fashion or beauty,’ she said. ‘When I’m talking to them on live, I do feel like it’s more, we’re friends.’”READ MORE
The weakness in the office market is hurting upscale hotels: “CoStar found upper-upscale hotels in markets that have seen more drastic office market changes — think San Francisco — have also seen the biggest drop in occupancy rates. It found office leasing activity and occupancy of upper-upscale hotels in San Francisco have declined about 30 percent and more than 40 percent, respectively, since before the Covid-19 pandemic. Among major U.S. cities, all but a handful followed the same correlation of slumping office leasing activity and weaker occupancy rates in the upper-upscale tier of the hotel market.”
“Boston saw occupancy of its upper-upscale hotel market segment grow modestly — less than 10 percent — since the pandemic, while its office market leasing activity is down about 15 percent since 2019.”
“In San Diego, where office leasing activity has declined less than 10 percent since 2019, its upper-upscale hotel market occupancy rates have grown by nearly 10 percent.”
“Only Miami posted positive growth in hotel occupancy and office leasing rates since the pandemic, among the cities analyzed by CoStar. Markets with a strong leisure component, such as Miami, have also disproportionately outperformed ones more reliant on business travel.” READ MORE
Could subscription pricing spur more health care innovation? “Low prices make antibiotics looks like a bad bet, so many pharmaceutical companies decline to develop them, despite their obvious long-term value to patients and society. The consequence is a very thin pipeline of potential new antibiotics. The Pasteur Act, now under consideration in the U.S. Congress, proposes to stimulate the development of new antibiotics through a subscription model. Such pricing models are likely to become an increasingly important feature in the health sector to stimulate valuable innovation and to improve access to new treatments, particularly those — like gene therapies — that come with very high price tags.”
“Subscription models come in two flavors. The first supports the creation of a valuable option, like antibiotics held in reserve against the rise of drug-resistant pathogens. The second expands access to a high-priced treatment to populations who may otherwise be priced out of the market.”
“The state of Louisiana has used this second type of subscription model to create access to antiviral drugs for Hepatitis C for its Medicaid and incarcerated populations.” READ MORE
Social media and the pandemic have brought new shoppers to America’s Chinatowns: “Peter Li emigrated from China, where he learned to butcher, in 1985, eventually opening his own market and maintaining connections with friends who left the city to establish livestock farms. Building relationships with duck farmers on Long Island helped him create a market for Chinese barbecue across the community: ‘My dad and I can see a duck hanging in a window at a restaurant and tell you where it came from based on how fat or slim it is,’ Jefferson says.”
“But it was the frustration and fear of the pandemic’s early days that drove Jefferson to take to social media in an effort to bring business to his family’s store and help feed the local community. His pathos-laden Reddit post, by turns raw, funny, and deeply personal, included lines such as: ‘$10 will get you something like 13 pounds of chicken drumsticks, plus a dozen eggs. Don’t like drum sticks? Fine, get something else, our prices are lower than your GPA and your parents’ expectations for you.’”
“Unsurprisingly, the post went viral. ‘I literally wrote it while I was sitting in the delivery truck,’ Jefferson says. ‘I’d seen supermarkets charging $59.99 a pound for drumsticks. At first I thought, ‘Fine, I should do that,’ but then I thought about families like mine and the aunts and grandmas of people I grew up with. I didn’t want to be a scumbag.’”
“The response was big, attracting non-Asian shoppers from outside the community, often groups of people placing orders of $400 or higher. Jefferson started adding signs in English, a novelty in a store that had only Chinese language signage. As the pandemic wound down, the big orders became less frequent, but the store has still seen more diversity in its customers.” READ MORE
THE 21 HATS PODCAST
I’m Not a Real CEO: This week, Jay Goltz, Liz Picarazzi, and Sarah Segal talk about the inherent conflicts between being an entrepreneur and being a CEO—and the different skill sets each role requires. Does it make sense for the same person to do both jobs? Is being CEO even a full-time job? And when does it make sense to replace yourself as CEO? Liz says she’s thought about it. Jay, not so much: “Could I have found somebody 10, 15, 20 years ago that was a better manager? Sure. But it just wasn't worth it.” Why not? “It's gonna cost you $250,000 a year,” Jay says. “Is it worth paying that?” Plus: Liz and Sarah talk about positioning a company to be acquired. And Sarah proposes a PR campaign for Liz’s package bins right on the spot.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren