Week of 04.23.2017
The crew here at The Week That Was hopes everyone had a happy Earth Day weekend. We spent ours in the lawn and garden section of our local home improvement center. In between mowing the yard, dusting off the patio furniture, and testing warm weather cocktail recipes, we drafted our thoughts on some interesting stories. Advertisers are letting their dollars do their brand talking while drug pricing critics are trying a march of a different kind—march-in rights—to try to evoke change in drug pricing. And a kindergartener had some tips for Gap’s CEO, which he took in stride.
Read on for The Week that Was…
IF AT FIRST YOU DON’T SUCCEED…
After several Members of Congress were unable to convince the Obama Administration to use “march-in rights” as a tool to lower the price of some prescription drugs, a consumer advocacy group is hoping for better luck with the Trump White House. “March-in rights” allow the federal government to eliminate market exclusivity protections for a pharmaceutical company if a drug’s development was supported by taxpayer money. The group argues that Astra Zeneca’s Xtandi, which was developed through funds from the National Institutes of Health, costs Medicare too much and that the government has a right to lower the price of a drug it helped fund. The authority has only been used (and rarely) when a drug’s supply was limited—and never before invoked because of price.
It is unlikely that the Trump Administration would attempt to use the authority—at least for now. However, medicines developed with government support are more likely to be the subject of similar petitions to the Administration, originating either from consumer groups or Members of Congress. And drugs with significant Medicare or Medicaid populations likely will feel double the pressure. Communicators need to know the history of their product’s development, so they can be better prepared to respond to new pressure points that may emerge.
GO ASK ALICE…WHEN SHE WAS JUST SMALL
Yeah, that’s right: TWTW is quoting Jefferson Airplane. The reference was too good to pass up—just like this story. While recent customer service-related headlines have led to lawsuits and plummeting stock, Gap, Inc. (yes, the jeans) is breaking the mold in more ways than one. Gap’s CEO, Jeff Kirwan, is getting some good press after responding directly to a letter from five-year-old Alice Jacob, who expressed her concerns that GapKids’ options for girls were “too girly.” In his reply, Kirwan directed Alice to some items in the collection that she might like (t-shirts with “dinosaurs, firetrucks, sharks, footballs and superheroes”) and explained that the company’s new Beauty and the Beast collection was about the “strength and bravery of girls… something that’s really important to us.” But, Kirwan conceded, “You are right, I think we can do a better job offering even more choices that appeal to everyone.”
These days, we’re seeing a lot of companies miss the mark with the customer communications (cough, airlines, cough). But Kirwan stayed true to the old adage, the customer is always right. That, combined with the timeliness of his reply (he spoke with his designers within a few weeks of receiving the letter), makes for the gold standard of customer service. And by acknowledging that Alice was right from the get-go, Kirwan was able to point out what Gap is already doing right without seeming defensive. What can we learn from Gap? Companies that see their customers as allies and their comments (and even complaints) as feedback will succeed in the customer service space, especially in a world where any response – good or bad – can go viral in seconds.
IT’S NOT WHO YOU ARE, BUT WHERE YOU ADVERTISE
Recently, a laundry list of big name brands have opted to use advertising dollars to forfend reputation, pulling a spate of paid spots from television shows and websites whose content or celebrity had become inconsistent with corporate values. More than 250 brands reportedly froze advertising with Google after ads were paired with extremist content on YouTube and other websites. Another 33 companies recently pulled content from The O’Reilly Factor (now sans “O’Reilly”) because of sexual harassment allegations against the show’s host.
While advertising platforms have generally taken more heat for placement issues, particularly online, the companies doing the advertising are starting to sweat as well. In March, 564 Amazon employees petitioned the CEO to discontinue advertising with alt-right outlet Breitbart. Placed between a rock and a hard place, company leadership called the advertising relationship “complicated” and explained that the placements were determined by a “third party, industry standard filter….” The pushback has continued.
Consumers have been somewhat forgiving of companies that have been thrust into the spotlight for advertising placement issues, recognizing that online advertising uses many algorithms and processes beyond a company’s direct control. However, this “free pass” won’t continue forever. While Google is investing in technology to identify objectionable content for advertisers, companies are increasingly moving away from real-time bidding for ad placement, adopting programmatic direct (or guaranteed placement) approach to ensure their online ads wind up on brand-appropriate sites. With ad placement becoming a public proxy of corporate values, brand marketers need to take another look at their ad buys. While guaranteed placement might be more expensive in the short-term, the investment is likely to pay off over time by avoiding reputational risks.
That’s it for now, but Congress is back in action this week—with a new compromise proposal on health reform. We’ll be watching closely to see how the debate takes shape a second time around.
Until next week,
– The Issues Management Practice @inVentiv Health PR