Welcome to the wonderful world of behavioural placement, where actions speak louder than words. Product placement has been in vogue in various incarnations and degrees of crassness for aeons now but its kid brother is really still in its infancy. The phrase behavioural placement has been coined by US channel NBC Universal, which is the first of the major networks there to admit openly using it to attract marketing money from companies who want to be associated with right-on TV shows.

The idea is that a fast-food giant, for example, may just want to associate itself with a stick-thin actor who happens to like the odd burger or three. The message is “burgers are ok in moderation” in a world worried about the seemingly inexorable rise in obesity. And by the way, we have also added salads and other healthier options to our menu options.

And in case you haven’t realised green is the new black, doing your bit to help save the planet is considered the best corporate message with which to be associated. Even big bad oil companies whose main income derives from er, oil, want consumers to know they’re leading the recyclables charge when it comes to saving the world’s scarce resources.

Mind you, the oil companies have a lot of hard yards to catch up when it comes to overhauling their image. Those of you who remember the long-running TV series Dallas will recall the first thing JR Ewing did when he got home to the plush hacienda after a hard day at the office was break open the decanter. Back in the day the message was clear: liquid black gold meant a life of good booze, fast cars and even faster women. This is probably not the kind of message any big business would now be comfortable with – better the lovely Kathryn.

The difference with behavioural placement compared with product placement is its relative subtlety. The whole idea is that it should be practically subliminal – nobody likes being preached at, particularly when they are sitting down to enjoy their favourite shows.

“People don’t want to be hit over the head with it,” said NBC Universal chief executive Jeff Zucker. “Putting it in programming is what makes it resonate with viewers.”

But is behavioural placement really that new or merely an extension of techniques that pre-date Mad Men? After all, before it was legislated out of existence, actors had been swanning around for decades with cigarettes hanging from the corner of their mouths. The viewer couldn’t see the brand in most cases but that hardly mattered – the tobacco barons can only have been all too delighted with role models who portrayed their products in such a positive light.

Will it catch on here? I don’t believe so.

The worry for marketing departments in Ireland will be that the actual message might be so subtle it will soar over the heads of the vast majority of the intended audience. Short of sporting Toyota livery on her car, an ESB logo at the Juice Point and letting viewers know her coffee is Fair Trade, her cup is made by Royal Doulton and her solar panels are courtesy of Kingspan, viewers may simply not notice the feel-good branding effort. This may make the advertisers feel better but would it increase sales?

When it comes to using behavioural placement in Ireland, I wouldn’t bet on any level of enthusiasm from marketing executives who now operate in a world where measurability is increasingly key. Also, marketing in Ireland is hardly known for its subtlety: given a choice between crude and likely effective or subtle and here’s hoping, the former would win out ever time.   

And, of course, there’s always the possibility that at least half the audience will look no further than Kathryn’s wholesome charm and disregard the rest – there would be a real danger the only outcome would be zero emissions from viewers’ pockets.

(originally appeared as Strong Language column, Irish Marketing Journal)

Margaret E. Ward is a journalist and managing director of Clear Ink, the clear English specialists. www.clearink.ie

Please feel free to add your comments/ suggestions, concerns and correct me if I have anything wrong. However, no jargon is allowed.

The government is spending your money –  and gambling with your children’s future – so you have a right to have your voice heard. Please comment.

The questions:
1. Form: Why is NAMA a commercial entity? This lacks transparency and accountability…not open to scrutiny by public or journalists.

SPVs are dodgy accountancy vehicles used by Enron and Worldcom to hide funds. At their most basic, they just move numbers from a public spreadsheet to one that’s encrypted with a password. Has a Wizard of Oz feel to it: “Don’t look behind that curtain, there’s nothing there”. This does not really give you confidence in their overall purpose does it? International investors will not be fooled.

The shares in these SPVs will be held by 49% by NAMA and 51% private investors. So, who will own the majority shareholding of the SPVs – banks, pension funds, developers – and will their interests be in the public interest? Doubtful. A potential conflict of interest? Most certainly.

2. Valuations: prices to be paid by government for bad bank loans is out of whack with reality and it increases the risk of reinflating the property bubble. As a commercial entity, it seems strange that NAMA would buy property at more than it’s worth. It’s a bit like a business owner going into an auto showroom, looking at price tag and saying: “I’ll pay you 30% over the sales price” for that transit van. It does not make commercial sense.

3. Risk sharing: this is the really scary thing. The risk is still on us, the taxpayers – not on the risk aware shareholders who bought the stocks or the experienced bondholders – who were unaware of the gamble they were taking by electing a government who “looked the other way” when developers, business people and bankers were gambling BIG MONEY using risky derivatives called CFDs. Our regulator was like Homer Simpson at the controls of the Springfield Nuclear Power Plant.. snoring away. (See Lessons from the D’Oh School of Economics” on this blog)

4. Cost: a huge burden is being placed on every taxpayer to fund this open-ended money pit. Our services will be cut and our children forced to emigrate – once again – to find work. Is it really worth the price? There ARE other, quicker, ways to get the economy moving.

5. Transparency: Where is it? Nama is getting muddier, and more complex, by the day. If you can’t explain something clearly then it’s possible you’re either trying to hide something or do not understand it yourself. Either way, it’s not a good governance strategy.

6. Time: will it take a generation to unwind? What does that mean for our health as a nation?

7. Teeth/ Consequences:  will Nama take a tough enough line on valuations and developers? This is crucial. Will any property developer, banker go to jail, go broke, etc. as a result of NAMA actions.

8. Money, money, money: the banks do not have enough money in the coffers, or capital. What capital ratios are banks are obliged to have now and in the future? (The capital ratio is the percentage of a bank’s cash on hand to its risk-weighted assets, or the stuff they have that can be converted into cash.)

9. Future funding: Will Nama lead to a large shareholding in the main banks if they can’t raise private equity? They have no cash.

10. Cash flow: The biggest question of all – since it’s the purpose of Nama – how EXACTLY will it lead to more money flowing to businesses?

11. Supervision: Who will set and monitor the costs for running NAMA – including consultants’ professional fees – to ensure value for money, transparency, accountability? Will it be the Comptroller & Auditor General, Irish accountancy firms or independent international audit companies?

12. Stability: will NAMA force banks to split in two – commercial and investment – to ensure no bank is “too big to fail” ever again? A purely commercial bank focuses on consumers’ needs and ensures good lending practices. Investment banks can take all risks – and the consequences good and bad – without jeopardising the economy.

Paul A. Volker, former Federal Reserve chairman who is also one of the architects of Obama’s economic strategies thinks this is essential for the recovery and stability of the US financial system.

13. Control: Will NAMA give the government more, or less, control? The government is seems currently unable to force bankers, developers to pay back funds, face criminal charges, hand back bonuses… so will NAMA give them more control over those issues than partial, short-term nationalisation?

14. Future stability: In future, will banks be forced to save a certain percentage of all deposits/ funds in their coffers (“fractional reasoning” – usually 13%) before they invest/loan the rest? Usually, when they take in €100 they keep €13 rainy day money and loan out of invest the €87. At height of boom they lent/ invested ALL of it, leaving the vaults empty. Now they are borrowing money so they have something in the vaults when the government, and international observers, comes for a look-see.

15. Regulation: Will NAMA suggest new regulations to ensure this mess cannot happen again? Is this in its remit or will lessons be lost due to “gagging” clause?

US regulators may be given power to take over failing firms that pose a risk to the entire financial system and unwind the firm’s derivatives contracts, pay the parties less than what they’re owed, or transfer the contracts to another, healthy financial firm.
http://www.huffingtonpost.com/2009/11/03/new-too-big-to-fail-bill_n_343818.html

16. Accountability: why aren’t the boards of the banks gone? Will NAMA have any power to force out those who were on boards at time of reckless lending? Why are we still funding Anglo Irish Bank and Irish Nationwide? They are not of systemic importance to the economy.

17. Conflicts of interest: the people needed to do the NAMA job are property, banking and legal experts yet they have the most to gain. How can conflicts of interest be avoided?

Interesting issues raised by others:
Complexity: Hugely complex project management/ organisation challenge faces Nama valuers: http://www.garrymiley.com/2009/07/31/WhatIsTheStars.aspx

Secrecy/ Gagging clause: “hope you cover the clause forbidding NAMA from criticising govt. A corollary of blasphemy prohibition?!” From a tweet to @marklittlenews.

Please add your views here….

Nama, according to its website, is an independent commerical entity designed to  take bad loans off the banks to make sure they start lending again.

Sweden’s Bo Lundren, who presided over their Nama-type body, said that in any crisis there are three things you must do:
1. Increase liquidity (lending to businesses and consumers)
2. Restore confidence (take quick, decisive action to show there is leadership)
3. Increase your capital base (get money back into the banks to make sure they are stable enough to continue)
See his comments here: http://www.iiea.com/events/bo-lundgren-on-the-rehabilitation-of-the-banking-system

Liquidity: So far, the government has done nothing to FORCE the banks to lend to SMEs again. These SMEs are stagnating: putting off hiring staff or downsizing and delaying development plans and innovation strategies.

Confidence: Um, we are talking about Irish politicians, right? I don’t think anyone – from international observers and domestic business people to Nobel-Prize winning economists and former regulators – truly believes that our so-called leaders will do anything to disrupt their gravy-train. Corruption, cronyism, conflict of interest, vested interests, jobs for the boys, winning money on the “horses” ring a bell here?

Capital base: Irish banks were reckless with their money and your money. They took the cash we put on deposit and loaned it ALL out. That’s right, no rainy day money. Coffers are empty. The normal practice is to keep 12% and loan out or invest 86%. Our bankers abandoned this and spent it all. Now they have to borrow it back – and this is getting more expensive every day.

So, Nama – it’s just a total nonsense.

This “commerical” and “off the balance sheet” entity is just one big smokescreen that’s hiding the size of our debt. Commerical entities funded by taxpayers’ funds – weird or what? Yes, there are semi-states but this is a commerical entity. No transparency – not subject to Freedom of Information legislation, not required to file an annual report. No accountability – who is running it, how much are they being paid, are they independent or just more people with vested interests?

Enron used to run an “off the balance sheet” entity. Those guys are in jail or dead from the stress.

Nama is just more jobs, and more money, for the same old people so they can keep the party going … but we’re footing the bill.

The view that there is no alternative is “just wrong” he said. “There is an alternative. Play by the rules of capitalism – if you can’t pay back your debt, shareholders and bondholders lose.  If the Government puts in money, it needs to get control commensurate with the money put in. It also should get a return proportionate to the risk involved – in this case, it’s a big risk.”

For more on Prof. Stiglitz’s views see:
Trinity talk – http://www.irishtimes.com/newspaper/finance/2009/1008/1224256168742.html
State squandering money – http://www.irishtimes.com/newspaper/breaking/2009/1007/breaking45.htm
Opposition urges Nama rethink -
http://www.irishtimes.com/newspaper/breaking/2009/1007/breaking61.html

If you do not understand that then let me take on the persona of Princess Leia from Star Wars when speaking in a holomessage to General Kenobi: “Years ago, you served the planet in the Global Warming period; now your little green island begs you to help us in our struggle against the Fianna Fail-Bankers-Property developers Empire. I regret that I am unable to present the taxpayers’ request to you in person; but we have fallen passive under an attack of half-truth, financial jargon and PR speak. I’m afraid my mission to bring you to the ordinary people has failed. I’ve placed information vital to the survival of the Irish state  into the memory systems of some brave economists, business people, journalists and brave citizens. My people will know how to retrieve it. You must see this mission to destroy Nama safely delivered to the ECB.  This is our most desperate hour. Help me, Obi-Wan Gormley; you’re my only hope.”

It was an interesting debate but since time was constrained I did not have a chance to outline my points so here they are in a nutshell.

1. We are not a capitalist country. In fact, there is no purely capitalist country. Ireland is a mixed economy. We have aspects of capitalism (private controlled enterprise) but some aspects of socialism (government controlled health care, transportation and some energy providers). Even the “there is no way in heck we will every have a remotely socialist policy” United States uses some socialist concepts. For example, military equipment suppliers are guaranteed a profit on everything they make for the US government. They are considered so important to national security that they cannot be allowed to go bankrupt. Poor Obama is also trying to socialise the health care system but those red-paranoid Yanks just won’t see the logic. 

2. Capitalism will never die as long as human beings live according to their true nature – people always want to better their situation.  They work out of self-interest, not some love of the common good despite what some communist and socialist regimes have said in the past.

3. Capitalism is changing.  Most people realise that capitalism is an unfair system that breeds inequity between the haves and have nots. Therefore, a new type of capitalism may be emerging. In the past, some people have called it the Third Way but I think we’re even beyond that concept now. Bill Clinton and Tony Blair are considered supporters of this concept. Read more here: http://en.wikipedia.org/wiki/Third_Way_(centrism) or http://www.cesj.org/thirdway/thirdway-intro.htm or http://www.fiu.edu/~mizrachs/thirdway.html

4. Capitalism is like a pair of shoes. Everybody likes different ones. Each capitalist nation has its own unique features. These countries leaders will continue to make choices about their economic system based on individual style and wear the economic system that suits their intended purpose. For example, you wouldn’t wear high heels if you planned to climb a mountain just as you wouldn’t wear ballet shoes at the Electric Picnic. Know why? You’d get muck absolutely everywhere.

We also talked about NAMA and but I’ll write about my objections to this – management, transparency, risk, timing, control and more – in a different post.

Ireland needs a drastic shift in cultural attitudes – away from entitlement and towards personal responsibility. The arrogant aristocracy has made taxpayers as cheap as chips.

This article was originally published in The Irish Times, Business this week, Platform column on:
March 6, 2009

The cost of “keeping up with the Fitzpatricks”

Two years ago, I wrote that the nation was like a kid who had just received pocket money for the first time: “Imagine four million children with sweaty coins in their hands waiting for the newsagents to open and you’ll get the picture.”

Spending was a thrill but now, like a youngster who has blown it all on sweets, the public and private sector are dealing with the tummy ache and asking: “Why did I do it? I should have known better!”

The easy-credit culture benefited not only those creating wealth in the private sector – entrepreneurs, small-business owners, property developers and multinationals – but the public sector as well. The number of people employed in Government swelled and those at the top, our elected Government representatives, felt they also needed to be richly rewarded for serving the people.

Arrogant aristocracy

Government generosity to itself – with our money – has created an arrogant aristocracy. Some long-serving TDs have probably forgotten how to drive, use public transport, carry cash or arrange meetings. No wonder the current Government reeks of a “let them eat cake” sense of entitlement. We have allowed it.

They live very different lives from the rest of us. We already know that our Taoiseach and many top ministers receive salaries that are higher – and completely disproportionate when judged on population size – than most of their European and American counterparts. Pensions and perks, including government cars and mileage allowances for private cars, are also overly generous. It’s a nice number in hard times.

No matter what happens, these senior civil servants will be largely unaffected by the recession. Even if they lose their seats, they’ll keep their full pensions – unlike some of the workers at Waterford Crystal.

Chances are, our elected officials’ children will not be forced to emigrate in as large numbers as their contemporaries. In fact, junior Minister for Finance Martin Mansergh told BBC television (and me) last week that his daughter was going to Australia for the experience. She was not being forced to emigrate. Lucky woman!

Fianna Fáil’s attitude and communications strategy of “radio silence” have done little to help the populace understand the seriousness of the issues we face – or to prepare for the hard cuts that are to come. We are fighting for our economic survival and dismissing media commentators who ask hard questions for the benefit of the public as “populists” does not engender confidence. After all, populists are the opposite of elitists.

Taxpayers – cheap as chips

Thanks to our light-touch regulation, the spending habits of some of our native financiers were more elaborate than the Government’s.

We still don’t know why Seán Quinn quietly bought up a 25 per cent contract for difference (CFD) or placed a high-risk bet on the direction of the share price in Anglo Irish Bank. Was he in a power play for control of Anglo from Seán Fitzpatrick & Co, was he trying to help the bank or was he just a rich man gambling big money to become even wealthier? Either way, it now seems that the chips Quinn and Fitzpatrick were playing with had “taxpayer” written on them. We’re all footing the bill for their miscalculations.

Over the years, I have talked about “keeping up with the Fitzpatricks” when discussing reckless spending – this has now acquired a strange new meaning.

Cultural shift

Politicians and bankers are not the only ones infected with a sense of entitlement. Even ordinary people feel they are owed something. We all know that child benefit and medical cards for the over-70s should be means tested. But how many of us refuse the payment on the basis that, although it’s nice to get when the kids are small, we don’t really need the money?

Ireland needs a drastic shift in cultural attitudes – away from entitlement and towards responsibility. The only thing citizens are owed is a Government that leads well, helps the most vulnerable in society and uses tax revenues efficiently. Sadly, we can’t say that any of those things have been achieved by the current administration.

The Government is spending our money and we have a responsibility to ensure they use it transparently and wisely. We should introduce a “Government-waste whistleblowers” campaign or organisation. Anyone who sees waste by a Government department or body – and we already know there is lots of it – can report it without fear of repercussions. It’s time to target the wasters, wherever they are, and usher in an era of personal responsibility.

True leaders know they must make real changes within themselves, and their organisations, before they can ask others to sacrifice.

Margaret E. Ward is a journalist, small-business owner and blogger www.margaretward.ie