Reputation 04: year in review

A company's standing in the press can see business rise or fall. Adam Hill analyses the results of PRWeek's Reputation Monitor for 2004.

Corporate reputations are made and lost, but what part does the press have to play? PRWeek's Reputation Monitor provides a weekly snapshot of the tone of media coverage of a given company. Over almost a year, however, Thomson Intermedia's National News Index (NNI) provides an insight into the way corporate reputation rises and falls.

The Reputation Monitor tables for 2004 (between 1 January and 10 November) reinforce two truisms. First, that incidents that bring media opprobrium onto a company's head need to be viewed for what they are, rather than necessarily spelling doom for a company's long-term reputation.

In May, for example, easyJet shares slumped 25 per cent after the collapse of low-cost airline Duo Airways added to fears that the era of cheap flights might well be on the wane. A month later, easyJet's announcement that rising oil prices would knock £4m off its full-year results was called a 'second profits warning in just over a month' by the Financial Times. Yet despite such setbacks, the airline stands in fourth place overall in the Top 20.

Second, tables offer proof, if it were needed, that reputations - or bad ones, at least - cast a long shadow.

Jennifer Lowney, associate partner at Brunswick in New York, has been the main spokesperson at bankrupt Enron since the company dispensed with in-house PR resources. 'The amount of enquiries that we've received has continued to decline,' she says. Yet despite receiving virtually no calls from UK journalists during 2004, Enron remains rooted near the foot of the table, third from bottom.

Other companies in the bottom five have also had their work cut out.

Finance groups Standard Life and, in particular, Equitable Life clearly have some thinking to do.

Equitable has propped up the table for most of the year following ongoing negative coverage of the Penrose report into the firm's guaranteed annuity policy debacle. Standard Life has fared better, but has suffered from general poor performance and specific stories such as a suspension of its promise to make up a shortfall in endowment mortgages.

Their thoughts on the PR challenges ahead would make interesting reading, but both companies declined to comment.

Second bottom on the overall list is Sainsbury's which had a difficult year. Press criticism included coming under fire in July for its proposal to award ousted chairman Sir Peter Davis £2.4m in performance-based bonuses - for a year that culminated in a profits warning and a potential dividend cut. There were eight resignations from the supermarket group's operational board after Justin King was appointed new chief executive.

But PR manager Gillian Taylor remains upbeat and says that the company can be optimistic over the arrival of King: 'On the corporate side, 2004 was a very tough year. But we have a clean slate going forward.'

In stark contrast to Sainsbury's travails, two other supermarkets spectacularly enhanced their reputations. In top slot by a distance, Tesco announced a series of page-stealing initiatives. Near the beginning of 2004, it made a £110m shares payout to staff. Chief executive Sir Terry Leahy's cut of executive director contracts from two years to one-year rolling contracts was well-received.

In tune with customers

Asda, in second place overall, has continued to show a grasp of what makes the media tick. In June, it was the first retailer to pass on a fall in oil prices to customers at petrol pumps, with a 2p cut in the price of a litre of petrol. But this tells only part of an impressive story, since the in-house PR team has also been working on improving the image of owner Wal-Mart (fifth in the table) and clothing line George, the positive coverage for which is included in Asda's rating.

Asda PR general manager Nick Agarwal says: 'PR is aligned with the aims of the business and the things that customers are interested in, so we focused on the new services that aim to make life easier for customers.' These included optician, pharmacy and photo-development services, which will receive further PR attention next year.

Looking at the reputation tables by sector, Centrica's £1.5bn auction of the Automobile Association pushed the AA to the top spot in the automotive sector reputation list and reached ninth place in the overall Top 20. Its PR operation is now undergoing a shake-up that will render it virtually unrecognisable from the team that was in place this year. Current head of PR Rebecca Hadley points to the launch of the organisation's first savings account and the AA Motoring Trust awareness campaign about childseat safety as successes this year.

Conversely, MG Rover may well be glad to see 2004 in its rearview mirror.

In November, the company attracted negative comment after BMW UK managing director Jim O'Donnel described Rover directors as 'the unacceptable face of capitalism' for paying themselves large salaries in troubled times. 'We've had a very difficult, challenging year compounded by events,' is all that manager of UK PR Kevin Jones will say.

Things looked far rosier elsewhere, particularly in the travel sector.

In April, easyJet revealed a 16.6 per cent rise in passengers over the previous 12 months and plans for new routes. The low-cost airline spent most of the year emphasising its European credentials, for example holding a separate conference for German, as well as UK, media at the October announcement of its new German routes.

The airline's director of corporate affairs, Toby Nicol, explains: 'It's crucial to always have an opinion; make sure you've got something interesting to say and be available.

We have particularly prioritised this. Where there are things that are affecting customers, we want to be the airline speaking for the low-cost sector.'

Cultural change in a business can count for a lot, and the Financial Services Authority, which came top of the financial services sector table, says this is probably the biggest factor in its success. New senior management kicked off the year with a business plan outlining the organisation's priorities.

'That gave the media and the industry a benchmark with which to judge us,' says head of media Rob McIvor. 'In the past, people decided for themselves what we should be doing and criticised us on that basis.' Media enquiries have also risen, with the PR team talking to 750 journalists in the last two months.

Recognising the value of PR also helps. Getting into the FTSE 100 in April was clearly a major breakthrough for William Hill, at number six in the Top 20, in terms of both its financial performance and its profile. But Brunswick cites the willingness of the betting group's directors to engage the media as another major reason for its PR success.

Communication is key

The Strategic Rail Authority (SRA), which administers £3.5bn of rail subsidy, is to be wound up in 2005 but propped up the travel sector bottom five, followed by the now-defunct Railtrack.

SRA executive director of communications Ceri Evans says: 'Our brief is to communicate with both taxpayers and passengers so they know what's happening. Our success is not gauged by positive media mentions. And perception always lags behind reality, so I've told my team not to move away from our territory.' His argument is that headlines haven't always reflected the stories about the SRA. 'The headline and copy have often been at odds.

And what you don't read, in terms of negatives, is that (the SRA) is rubbish,' he says.

Railways are a traditional media punchbag, of course. 'Cutting train services (may be done) to improve punctuality - but it's a "cuts" story,' continues Evans. 'The main PR lesson of this year has been: know your messages and get the articulation right.' However, the SRA will cease to exist in around 12 months. It will make franchise announcements in 2005, but its role in taking the comms initiative for the rail industry has, to some extent, gone.

From the top of the media sector table, BSkyB comms director Julian Eccles says the key message of 2004, in which the broadcaster has been repositioned as an entertainment provider rather than a utility, will be ongoing next year. 'We want people to recognise that Sky continues to grow,' he says.

In November, shares rose more than four per cent after BSkyB reported higher-than-expected new-subscriber numbers in the first quarter and announced that pre-tax profits had increased by 30 per cent. The flip-side of that media success story was the now-defunct Carlton and Granada venture ITV Digital, which stopped broadcasting in May 2003 with debts of £1.25bn, and yet remained at the bottom of the media companies' reputation table in 2004.

Bad press

Just above ITV Digital in the table, Daily Telegraph owner Hollinger International is still very much in business, but made headlines for the wrong reasons this year.

The US Securities and Exchange Commission estimated that cash taken from the company by former director Conrad Black and some associates constituted 95 per cent of the firm's net income between 1997 and 2003. While Black hired James Badenhausen at US PR company Robinson Lehrer & Montgomery to advise him, Hollinger's worldwide counsel is provided by US comms agency Kekst and Company.

Kekst partner Molly Morse tells PRWeek: 'With a new senior management team in place this year, Hollinger International has been focused on ensuring accuracy and transparency in communicating to the investment community, the media and all other audiences.'

Hollinger still has much to do, but it is far from alone. Elsewhere, you can almost hear the rustle of sleeves being rolled up ready for some very hard work next year. Yet even those at the summit of the pile realise there is no time for complacency. Reputations can change very quickly.

TOP 20 COMPANIES

Company NNI Agency

Tesco 6,775.5 The Maitland Consultancy, Collette Hill

Asda 6,426.2 Bryan Morel, Westbury, Lee Publicity,

Fishburn Hedges

Vodafone 2,456.2 Borkowski PR, Harvard PR

easyJet 1,813 Financial Dynamics, Hill & Knowlton

Wal-Mart 1,490.7 Asda in-house

William Hill 1,469.8 Brunswick

Financial

Services Authority 1,384.9 In-house

HSBC 1,372 In-house

AA 1,371.8 In-house

Ladbrokes 1,303.4 The Red Consultancy

Royal Bank

of Scotland 1,282.2 In-house, LLM Communications

Waitrose 1,225.4 In-house

The Tote 1,207.5 In-house

Ryanair 1,100.9 In-house, Murray Consultants

Carphone Warehouse 1,099.7 Bite Communications

Next 1,076.5 Hudson Sandler

Wm Morrison 1,068.1 Citigate Dewe Rogerson

HBOS 977.2 In-house

Eurostar 964.9 In-house, Media Relations Management

Source: Thomson Intermedia between 1 January and 10 November 2004. Some

firms' in-house departments may use agencies on a project basis

BOTTOM 5 COMPANIES

Company NNI Agency

Equitable Life -2,657 Heath Corporate Communications

Sainsbury's -1,835.5 Finsbury, Halpern Associates

Enron -1,730.2 Brunswick

Shell -1,446 In-house

Standard Life -1,384.4 In-house, Brunswick

Source: Thomson Intermedia between 1 January and 10 November 2004. Some

firms' in-house departments may use agencies on a project basis

TOP 5 COMPANIES RETAIL

Company NNI Agency

Tesco 6,775.5 The Maitland Consultancy, Collette Hill

Asda 5,427.7 Bryan Morel, Westbury, Lee Publicity,

Fishburn Hedges

Wal-Mart 1,490.7 Asda in-house

Waitrose 1,225.4 In-house

Next 1,076.5 Hudson Sandler

Source: Thomson Intermedia between 1 January and 10 November 2004. Some

firms' in-house departments may use agencies on a project basis

BOTTOM 5 COMPANIES RETAIL

Company NNI Agency

Sainsbury's -1,835.5 Finsbury, Halpern Associates

WH Smith -680.7 In-house, Brunswick

Marks & Spencer -678.3 Staniforth Comms, The Red

Consultancy, Lansons

McDonald's Restaurants -155.1 The Red Consultancy, Bell Pottinger

Public Affairs

Toys 'R' Us -75.3 In-house

Source: Thomson Intermedia between 1 January and 10 November 2004. Some

firms' in-house departments may use agencies on a project basis

TOP 5 COMPANIES FINANCIAL SERVICES

Company NNI Agency

Financial Services Authority 1,384.9 In-house

HSBC 1,372 In-house

Royal Bank of Scotland 1,282.2 In-house, LLM Communications

HBOS 977.2 In-house

Halifax 922.4 In-house

Source: Thomson Intermedia between 1 January and 10 November 2004. Some

firms' in-house departments may use agencies on a project basis

BOTTOM 5 COMPANIES FINANCIAL SERVICES

Company NNI Agency

Equitable Life -2,657 Heath Corporate Communications

Standard Life -1,384.4 In-house, Brunswick

Bank of Credit

and Commerce Int -351.4 No longer exists

Scottish Mutual -150 In-house

Scottish Provident -98.9 In-house

Source: Thomson Intermedia between 1 January and 10 November 2004. Some

firms' in-house departments may use agencies on a project basis

TOP 5 COMPANIES AUTOMOTIVE

Company NNI Agency

AA 1,371.8 In-house

BMW 961.2 In-house

Ford 939.6 In-house

Toyota 753.7 In-house

Renault 649.9 In-house

Source: Thomson Intermedia between 1 January and 10 November 2004. Some

firms' in-house departments may use agencies on a project basis

BOTTOM 5 COMPANIES AUTOMOTIVE

Company NNI Agency

MG Rover -26.1 The Maitland Consultancy

Rover Group -19.2 In-house

Jeep -14.2 In-house

Formula One -11.4 In-house

Dunlop -10 In-house, Haslimann Taylor

Source: Thomson Intermedia between 1 January and 10 November 2004. Some

firms' in-house departments may use agencies on a project basis

TOP OF THE TABLE

Tesco external communications manager Jonathan Church

'The growth in the business has meant that the team has had to get to grips with new sectors including telecoms, clothing and mortgages, as well as international markets where Tesco now has more than 50 per cent of its sales space. I am keen to do more on corporate responsibility, as there are so many great stories to be told about personal and corporate achievements in this area. When you employ so many people and talk to so many customers you get a feel for what is important to them, and that is what I want to focus our communication on. Most of the agencies we use do product PR for us; for instance, in health and beauty and clothing.

Outside of these, we use The Maitland Consultancy for financial comms and Collette Hill helps us to communicate our personnel messages.

'It's difficult to choose one headline from this year, but if I had to choose something in terms of how high profile it was, I'd have to say the trials we announced on sick pay. This started a national debate that was carried out on virtually every news programme and in every newspaper.

It highlighted a growing problem for many businesses and the public sector.

I think people understood that the approach we were taking was to support staff who are put under pressure when a colleague is off sick without notice. We were open and honest, even when it felt uncomfortable. We also made sure our people knew about it first from our internal comms team.

We try not to be too clever and focus on what customers want to read about and journalists want to write about. The famous (Kylie) 'green dress' was a great example of joined-up working with the clothing team developing a fantastic product, our clothing PR agency getting it talked about in the fashion pages and then the press office getting it into the news.'

TOP 5 COMPANIES MEDIA

Company NNI Agency

BSkyB 402.8 Finsbury, Geronimo, Cohn & Wolfe

Channel 4 198.3 Frank PR

Reuters 186.4 In-house, Brunswick

BBC 172 In-house

NTL Group 122.8 Buchanan, Lexis PR, Nelson Bostock

Source: Thomson Intermedia between 1 January and 10 November 2004. Some

firms' in-house departments may use agencies on a project basis

BOTTOM 5 COMPANIES MEDIA

Company NNI Agency

ITV Digital -242.5 No longer exists

Hollinger International -134.9 Kekst & Co

Disney Corporation -74.2 In-house

Sportsworld Media -51.9 No longer exists

Profile Media -39.4 In-house

Source: Thomson Intermedia between 1 January and 10 November 2004. Some

firms' in-house departments may use agencies on a project basis

TOP 5 COMPANIES TRAVEL

Company NNI Agency

easyJet 1813 Financial Dynamics, Hill & Knowlton

Ryanair 1,100.9 In-house, Murray Consultants

Thomas Cook 600 In-house

Airbus 582.4 Financial Dynamics

First Choice Holidays 556.9 In-house

Source: Thomson Intermedia between 1 January and 10 November 2004. Some

firms' in-house departments may use agencies on a project basis

BOTTOM 5 COMPANIES TRAVEL

Company NNI Agency

Strategic Rail Authority -463.9 8HWE

Railtrack -407.6 No longer exists

MyTravel -383.6 In-house

Aslef -367.9 In-house

Alitalia -317.1 In-house

Source: Thomson Intermedia between 1 January and 10 November 2004. Some

firms' in-house departments may use agencies on a project basis

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