Gray Matters: Vodafone redundancies, tourism advertising, ad fraud and Tip Top's new flavour

  • Voices
  • March 15, 2019
  • Graham Medcalf
Gray Matters: Vodafone redundancies, tourism advertising, ad fraud and Tip Top's new flavour

Hold that call

How do you know if a brand is in trouble? Well, when I read in NZ Herald that Vodafone New Zealand is asking nearly all of its 2800 staff if they want redundancy, my immediate thought was, “they must be in trouble”. My second thought was, “should I be changing to Spark?”

I got to wondering how other consumers were reacting to the Vodafone news. Rawdon Christie, previously the host of TVNZ’s Breakfast, tweeted: “I now know what the new CEO at @vodafoneNZ does on a sunny Sunday afternoon the day after an outage - he's on Twitter addressing peoples' complaints.” Christie did of course work with current Vodafone NZ CEO Jason Paris at TVNZ.

Replying to a different tweet, Vodafone New Zealand tried to reassure a nervous public: “Every decision will be about improving our customer service levels. The current restructure & the changes we're looking at will considerably improve service levels. At this stage there will be no closures of NZ call centres as an outcome of this process.”

To have an outage at the same time as looking to lay off staff hardly helped reassure.

“4G out in Wellington? @vodafoneNZ I lost both Broadband and Mobile for 15 minutes. Wifi back on, still no 4G?” tweeted Mark Rudan, Wellington Phoenix head coach.

Meanwhile, NZ Herald Business referred to the Vodafone call as a, “climate of fear and anxiety”, quoting Unite organiser Shirley Wang, who reported that around 200 frontline contact staff have been offered redundancy. Which makes the Vodafone line (yes there is an ‘n’ in there) of “no closures of NZ call centres,” as puzzling to say the least.

It was only two months ago that NBR reported that Vodafone was considering outsourcing call centre operations.

On Monday NZ Herald was reporting: “Vodafone secretly plans to outsource jobs to India: insider.” In the same report, Vodafone NZ spokeswoman Kathy Gliek confirmed outsourcing of IT roles did take place in late 2017. If you believe in precedents, that may give you a clue.

There is some fairly obvious communications advice that Vodafone New Zealand should perhaps have taken. Written some time ago in Social Media Today, it flags, “How to Avoid Mixed Messages Between brand, PR and corporate communications?”

The most salient for me was, that HR needs to focus more on the employee as the brand and communication should be the personal affair of the CEO. As the article warns, journalists now amply on Twitter and Facebook, so, “marketing, PR and HR teams need to work seamlessly together to make sure that the commercial and PR messages are consistent and well targeted”.

I await with interest to see how Spark, 2degrees and some of the smaller broadband providers take advantage of what will inevitably be a difficult time for Vodafone.

Tourism advertising

Talking of speaking with one voice, the Australian Government is to spend millions attracting Chinese tourists. This comes on the back of Australia preparing to ban Huawei from its 5G network.

To make matters worse, a report from Tourism Research Australia, outlined in Stuff, has highlighted some of the problems in getting this sector of Chinese tourists to regional Australia. “Time (71 percent) was the major constraint, followed by cost (32 percent). The research also found "a view entrenched by the experiences and attitudes of Chinese society that personal safety would be compromised in regional Australia".

In New Zealand, we are still waiting for the coalition Government's 'long overdue' tourism strategy to handle five million overseas visitors. At the same time, a 2019 China-New Zealand Year of Tourism launch event has been postponed by China, while the China People's Daily, considered a mouthpiece of the Chinese state, published an article claiming tourists are beginning to shun New Zealand.

Adding to the problem, Tourism New Zealand's '100% Pure' campaign has already come under fire from international media who claim that it misrepresented the country's environmental record.

Apparently, Tourism New Zealand (TNZ) has a strategy based on attracting more "high value" visitors who come throughout the year, stay longer and travel into the regions. But as Stuff reported with regard to problems with improvements to Queenstown airport, “NZ tourism is 'asleep at the wheel'.”

Submissions closed on 4 February 2019, on a draft Tourism Strategy that, in the words of the Ministry of Business Innovation and Employment New Zealand, “proposes a more deliberate and active role for government in tourism, to make sure that growth is productive, sustainable and inclusive”.

In the meantime, as we wait, all those potential Chinese (and other overseas) visitors will be making plans to go elsewhere.

Where are they?

In December I wrote, “our obsession with all things digital is misplaced and we should be considering a return of advertising funds to more traditional forms of advertising”. So it was with interest I read Damien Venuto’s column in NZ Herald on the weekend, “Kiwi advertisers have spent millions on ads never seen by anyone,” in which he references Kris Hadley, founder of Kiwi media agency Together, who told the Weekend Herald that ad fraud could be sapping the local market of between $600,000 and $1.6 million a year spent by New Zealand companies on online advertising.

It was Marketing Week that brought to our attention that only nine percent of digital ads are viewed for more than a second. But the biggest issue facing many small businesses is determining whether the claims put to them by those proffering different media options are steeped in hyperbole or have any validity at all.

The issue is not just one that has arisen in the new world of digital advertising. Publishers of local magazines claim distribution to households in areas where the publication is never seen.

In digital advertising, the obsession with ‘clicks’ is frankly ridiculous, particularly when the intent of the advertising is to drive prospects to a client or into a store, but the prospects never arrive.

Certain industries are easier than others when it comes to measuring prospects reactions to advertising. Take the retirement village sector as a prime example. Advertise an open day and you can count the number and quality of the prospects that attend. When an agency keeps talking clicks and the client says there are no prospects arriving, it is obvious that the emperor has no clothes.

All too often the success or failure of a particular medium is lost within a mixed media campaign. But as Karina Tarma writes in Forbes: “What hasn’t changed is that marketers still have to find that sweet spot between their marketing budgets and an attractive rate of conversion. Understanding the battle between traditional marketing and digital marketing is extremely valuable in setting your budget to net the best return on investment.”

On the subject of investment, advertising agencies should be alarmed if the contention also published in Forbes this week is true. Contributing columnist Avi Dan, wrote: ”Because of the ‘advertising is an expense’ mindset, major companies no longer seem to regard ad agencies as essential brand stewards. They see them as vendors, as a cost to be cut.”

Fool’s errand

Bids closed this week for Fonterra's Tip Top ice cream business but, according to NZ Herald, the sale process has been anything but smooth. With the sale in the mix, it seems a strange time for Tip Top to be launching a tomato sauce ice cream, that Stuff refers to as, “just the latest stupid food mashup to sour our souls”. This impending disaster can hardly bring reassurance to any prospective buyer.

One wag on Twitter thought the announcement was an April Fool’s joke that the PR team had released 24 days early.

As advertising icon Paul Catmur wrote in NZ Herald last year: “In 2016 Fonterra's stated policy was to move from 'a commodities position to adding value through brands'. That sounds like a sound strategy, yet there is nobody on their board with any formal marketing training or experience to help that vision come to fruition. What does a board comprised of farming, accounting and legal experts know about adding value to a commodity through brand-building?”

I guess that question has now been answered.

Afterthought

I can only agree with the NZ Herald opinion calling Kiwibank's 'I Am Hope' campaign “corporate drive masquerading as altruism”. As the Australian Financial Review states: “If banks start using advertising to tell consumers about the benefits of their products and services, rather than to signal virtues, which would be better left to the not-for-profits they sponsor, it may prove to be a watershed moment.”

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