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Frankie Flack: Lies, damn lies, statistics and business journalism

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If you’re a business reporter and don’t love numbers, I don’t want anything to do with you.

I love selling stories with facts and figures a lot more than I like selling sizzle. Show me market share or same-store sales or margins data, and I’ll go to town. In contrast, today’s great profile of a brash young CEO might be tomorrow’s cautionary tale. But the numbers, they don’t lie.

(This isn’t, technically, true. Number lie all the time. They also mislead. But — and this is what I love about numbers — they can be fact checked, vetted, fisked, taken apart, put back together. You want to question my assumptions? Bring it on.)

That said, “data-driven journalism” has now officially jumped the shark. Election-predicting Nate Silver has re-launched fivethirtyeight.com for ESPN, but he’s not content to just crunch baseball stats or election polls. Nope. His site is going to bring a data-driven approach to everything, no matter how silly.

I mean, the site has been up for only a few days, and two things have already happened. First, reporters are now claiming that statistics can solve any problem. That missing airliner? If only the nerd-kings were in charge! They’d apply Bayesian statistics and — voila — have a much better idea of where the plane went down. Never mind that Bayesian statistics don’t work well in an information vacuum. Just wave that magic wand!

Second, reporters are now violating most of the primary rules of working with numbers, such as the general principle that the bigger the dataset, the better the results. Yet 24 hours after the site launched, the “lead writer for news” used this phrase: “My experiment had a sample size of one.” That is not a sentence that inspires confidence.

And it’s not just fivethirtyeight. The New York Times is launching “The Upshot” to do essentially the same thing. Ezra Klein has a similar belief in the edifying effect of charts and data. Some of this stuff will be really good. But a ton of it will be horseshit, dressed up as science.

This is going to boomerang back to haunt you business reporters. You heard it here first: It’s going to take about six weeks for the PR brain trust to decide that we need less pitches with infographics (thank God) and more datasets that we can dump on unsuspecting reporters.

You all will have to start double-checking my numbers because no one wants to let a juicy data story slip away. And we’ll all be worse off, spending our days hunched over Excel spreadsheets, looking for trickery.

So here’s my offer, and we need to agree on this quickly before things spin even more out of control: on behalf of all flacks, we will not pivot to sending you crappy “data” stories if you all agree not to hop on the bandwagon of dressing up garbage numbers as some sort of absolute truth.

That doesn’t mean I’m abandoning numbers. Far from it.

I’m still going to push for GAAP earnings reports and sensible information on marketing trends or whatever to send you.

But I won’t claim that Bayesian statistics are the key to understanding the frozen concentrated orange-juice futures if you don’t publish “experiments with a sample size of one.”

Deal?

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Frankie Flack: Pack journalism invades business journalism

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So last month, I was taking a short mental health break (flacking, believe it or not, can be draining at times), and I ran across a weird little story at Gizmodo about a company that will take your ultrasound and, using 3-D printing, create a life-size replica of your fetus. The story wasn’t, strictly speaking, “news” (CNet wrote on a related effort 18 months ago). And it wasn’t, strictly speaking, “important.”

Readable? Yes. Strange. Yes? Critical information that would allow me to better understand the world? No.

My beef isn’t that some digital journalist, somewhere, saw the 3-D fetus story decided it was worth a writeup. Hell, Gizmodo got my eyeballs. My beef is how widespread this stupid little story was. The Gizmodo story I read gave credit to Fast Company’s Co.Design for the story. Co.Design noted that it saw the news first on some site called WebProNews, which also covered the story. WebProNews got the start on the fetus piece from a post on PopSugar. Business Insider also wrote the story, also crediting PopSugar.

To recap: some of the nations largest and quickest-growing business and technology sites all wrote essentially the same, carbon-copy story based on one ur-post from a fashion-and-celebrity blog. A large number of real journalists, getting paid real money, took time out of their day to make sure that this particular meaningless story made it on their site.

Now, pack journalism has always been a problem. During the 1996 Olympics, I took a drive through the neighborhood where falsely suspected bomber Richard Jewell lived, and it was a circus: a hundred cameras, a thousand people, just waiting to report the same marginal set of facts. And that’s a moment that is re-played, with a different cast and a different location, with great frequency. But the Internet has compounded the problem: in the pursuit of the viral, you now have more people chasing less important things.

This isn’t just sour grapes. Once, in the past year, I had a client that was able to capture the zeitgeist. Reporters were crawling out of the woodwork to talk to us. As a flack, I should have been in my glory. Except that all but maybe a half-dozen of the stories followed the same cookie-cutter script. Sure, the bolus of coverage was great, but if I could have siphoned some of that off, given it to some deserving but under-covered story, I would have

That’s my real complaint: no matter how quickly a writer can bang out a re-write of the story of the day, there is still an opportunity cost. Those are minutes not writing about something else that might be equally cool. Minutes not spent finding that exclusive. The reality is that I — and pretty much all flacks — have at least one interesting, stupid-simple story that hasn’t been told yet. We’ve love to share it with you.

So before you go and write the eight-hundredth piece about 3-D printing or the new iPhone or the Bud Light Super Bowl commercial, ring up your favorite flack and give him 60 seconds. We’ll all be better off for it.

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Frankie Flack: Why commentary is killing business journalism

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So last week, the Washington Post’s Ezra Klein, wunderkid (apparently, when writing about Ezra, there is a rule you must use the term “wunderkid”), walked away from the newspaper to create his own digital property. But Ezra is hardly an original; his departure lagged that of Walter Mossberg‘s decision to flee the confines of The Wall Street Journal for a brand-new outpost on the web: Re/code.

You might think that’s great news for flacks: new, high-profile outlets to pitch, billions of pixels worth of online real-estate to be filled. And that is good news, in the short term. I have a list of clients that I can’t wait to get Mossberg to write about. (Walt: give me a call. Lots to discuss.)

But over the long term, this trend is going to make my life more difficult. Ezra and Walt’s decisions to walk away from stable, well-financed journalistic institutions speaks to the power of their personal brands. And it’s not just those guys. Bill Simmons leveraged his everyman sports columns into Grantland, a standalone (though Disney-owned) sports-and-pop-culture site. It’s hip to be a digital pioneer.

But let’s be honest for a second here: neither Ezra nor Walt (nor Bill, for that matter) earned his kingdom based on good, old-fashioned journalism. They all created empires based on the way that they married their knowledge with commentary that clearly belies some opinions. Walt loves Apple. Bill loves the Celtics. Ezra wants nationalized health care. And those guys are all smart enough that we — as readers — are better off for their freedom to editorialize a bit.

Here’s where the problem comes in. Most of the folks covering business today, especially the young guns who see a role model in 29-year-old Ezra, aren’t experienced enough to pull off commentary. Especially in business coverage, which requires in-depth industry knowledge and more than a smattering of accounting know-how, taking sides is a dangerous endeavor. Hell, even the professionals do a crappy job of picking winners.

So God forbid some 25-year-old reporter decides that his route to fame and fortune requires providing snark along with the numbers. I have my hands full just getting the facts out there in a way that folks can understand. If I have to contend with a new army of kids who think they need to smack a “good” or “bad” label on company they cover, I’m going to have to go looking for my bottle of gin.

This isn’t a product of my fevered mind, either. I was lunching with an erstwhile business journalist the other day, a guy who is now up in the ivory tower, teaching college kids the magic of the inverted pyramid and the danger of the anonymous source. I asked him what today’s generation of j-school students expected to do with themselves, given that the job outlook ain’t exactly what it used to be.

“Blogging,” he tells me, with just the slightest hint of an eye roll. “They all think they’ll be bloggers.”

And what Walt and Ezra and Bill have taught these kids about blogging is that you have to take sides, make your best argument, collect the eyeballs. The alternative? Building sources and trust and getting out there in your local community, really knowing the beat? That’s a great approach, and it’s lead to some wonderful, ground-level business journalism, especially in the past few years. A lot of that journalism has come from the network of Patch sites.

Of course, about a week ago, Patch’s longtime patron, AOL, foisted operations of the troubled network off on some other corporate entity, a huge vote of no-confidence. So it’s hard to blame any kid, looking to make a name and a paycheck, that concludes that Walt had it right and Patch had it wrong.

If that’s the case, well: I’d better figuring out where that gin is at.

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Frankie Flack: Why I hate sites such as Seeking Alpha

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A lot of business reporters are assholes. I’m not sure there are more assholes per capita in business journalism, but, by virtue of the job, they can be pretty high profile. It’s clear that a lot of those folks get their jollies from seeing share prices swing up or down (mostly down).

But I respect those folks. I may disagree with some of their judgment calls (there is clearly a bias toward covering bad news), but nearly everyone in my Rolodex — even the assholes — is making a genuine effort to get things right.

They check names. They want facts to be correct. They want quotes to be accurate. They work to insulate themselves from accusations of bias. They put their name at the top of the story and stand behind the contents. You want to call those guys up and bitch? They’re happy to mix it up.

So I don’t have a big problem with the assholes.

The bigger threat to quality communication about business is sites such as Seeking Alpha, which follow the hip new media model of letting anyone write with no serious effort to make sure they’re writing accurately and without bias. The site is clogged with anonymous posters, many of whom are writing in clear support of their disclosed positions. And that’s the system working well. The disclosure process itself is done on the honor system, which ain’t ideal when dollars are on the line.

That’s not to say that there’s no quality content on the site. It’s just far harder to tell honest analysis from shilling than it is pretty much anywhere else.

It would be easy to lump the Seeking Alphas of the world in with community posts at BuzzFeed or Huffington Post, where cat-related user-generate content sits harmless or unread or harmlessly unread. But Seeking Alpha is getting eyeballs: 8 million pairs a month. And in a world of shrinking staffs on the business page, Seeking Alpha is filling a void, especially with regard to small cap stocks.

Check out the Google Finance page for your favorite thinly traded ticker. Bet you see a Seeking Alpha story.

This makes my life difficult. I don’t have the time to go and chase 7,000 “contributors,” many of them amateurs, playing dress-up and pretending to be analysts/journalists. And my Rolodex don’t have enough business reporters — even the assholes — to drown out the low-quality content with real, thoughtful reporting.

Up in the ivory towers of journalism, there is some concern that the ratio of flacks to journalists is getting way out of whack (it’s more than three to one now, if you’re interested). Companies are hiring lots more people like me, even as the pool of people like you shrinks. But we’re not building some army of pitchmen designed to blanket reporters with phone calls and emails. We’re trying to fill a void. Figure out ways of getting into the content game with tweets, blogs, “sponsored content,” newsletters and stuff like that.

We believe — in our heart of hearts — that investors and readers will be better off hearing from us than parsing the reality presented by some pseudonym-filled, loosely supervised peanut gallery on the web.

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Frankie Flack: Winning after the verdict

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Last week the Columbia Journalism Review published a brief story about how various industry publications wrote notably different news pieces based on one press release.

The stories centered around a lawsuit between the Motion Picture Association of America (MPAA) and Hotfile, which is described in the piece as “a cyberlocker service that lets users upload files and creates a link for each one.”

Because the ruling in the case was not immediately available through normal public channels, news media were forced to report on the story with virtually no direct sourcing on the result of the trial.  Here is where MPAA made the savvy move to issue a press release pronouncing the ruling was a victory for the industry.  Ignoring the resulting bias from technology media, with a natural inclination to support Hotfile, and entertainment reporters, with a similar bent toward the MPAA, the predominant storyline was that the ruling was a clear victory for MPAA.

Issuing the release was a savvy move from the MPAA, not simply for being the only direct commentary on the case but because in litigation often the first word is the most important.  Most legal documents, especially judgments, are long and complicated.

Most of all, rarely do rulings offer clear, definitive language that supports the notion of a resounding victory for one side over the other.  That is not to say it does not ever happen, though.  It is rare because the court must weigh the arguments of both sides, meaning that competent attorneys will make strong points for their clients.

As a result, subsequent media reports of a ruling often rely on how one side or the other is reading the ruling.

If the law supports one argument over the other, the tone and length of the victorious party will help reporters contextualize exactly what it means for the company and maybe the industry.  In these situations it is important to stay in line with the organization’s broader legal strategy.  If an appeal is likely, the victorious company will need to be confident and excited about the ruling, but careful not to go too far in their language.  It is always important to remember that judges, regulators and the opposition read these statements carefully.

In the case of Hotfile, while a statement may not have been entirely appropriate given that ruling was not favorable, ignoring the media only served to do further harm to the company’s public image.  In order to bring the tone of the coverage back toward a more middle ground, the company might have considered a single interview where the executive was able to emphasize that the ruling was not as clear cut as MPAA made it out to be.

Another tactic, if allowed by the attorneys, would be to arrange for reporters to speak with legal counsel on background to provide more context to the ruling and highlight key points that refute claims in MPAA’s release.

Losing a verdict at trial does not have to mean a total loss in the court of public opinion.

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Frankie Flack: Protecting milliseconds in the lockup room

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CNBC has a lengthy and fascinating report online Tuesday about that some traders in Chicago somehow received word about the Federal Reserve Board’s announcement last week that it would not be scaling back its support of the economy.  The investigation centers around a matter of milliseconds where traders were able to move large amounts of money ahead of a broader release of the news.

Considering it is impossible for a human to make a decision in the time in question, the story brings up serious questions about the impact of automated trading on market fairness.  But that is no way my expertise, nor the purpose of this column.

What is particularly interesting about this piece though is the detail it offers about the elaborate process the Federal Reserve goes through to give a group of reporters a preview of the news while ensuring they do not publish the information in advance of the announcement.  Here is what the piece describes:

In advance of the release of the market moving decision, Federal Reserve officials followed a standard procedure to choreograph a tightly planned embargo operation that gave reporters advance copies of the Fed’s decision. Inside a secure so-called “lockup” room on the top floor of the William McChesney Martin Jr. building, Fed officials instructed reporters not to send information about that decision to the outside world before precisely 2 p.m. EDT as measured by the national atomic clock in Colorado.

The doors were locked at 1:45 p.m., and Fed staffers handed out copies of the statement at 1:50 p.m., allowing reporters a few minutes to digest the complicated document before reporting on its contents. At 1:58 p.m. television reporters were escorted out of the room to a balcony where cameras had been positioned. The Fed’s security rules dictated that television reporters were not allowed to speak before precisely 2 p.m. Print reporters were told they were allowed to open a phone line to their editors at headquarters offices a few moments in advance of the hour, but not allowed to interact with people on the other end of the line until exactly 2 p.m.

On top of those precautions, every media person entering the lockup—including two employees of CNBC—was required to sign an agreement that read: “I understand that I may make no public use of the documents distributed by Federal Reserve Board (FRB) staff or the information contained therein, including broadcasting, posting on the Internet or other dissemination, until the time the FRB has set for their public release.”

It is unquestionably a lot of work to ensure news is disseminated simultaneously.  Why would the Federal Reserve (and other organizations) take such pains to give a group of reporters highly complex news only minutes ahead of time?

Typically, embargoing news should only be done when the extra time you give a reporter results in a meaningful change in the coverage.  By change, I do not want to imply an embargo is a way to get favorable coverage, but rather to ensure that highly complex news influencing a large number of people is accurately reported right out of the gate.  So what can the Fed get in 15 minutes?

In that 15 minutes the Fed can make sure that reporters at least get the core message right and it does not turn into a “circus”-type moment that we have seen recently with U.S. Supreme Court decisions.  That is a deceptively strong argument, as confusion about such critical financial news could have drastic consequences on the market.

However, given the potential implications even a milliseconds leak could have on the fairness of the marketplace, it may be prudent for the Fed to enhance its direct communications and reconsider the effectiveness of the lockup rooms.  When leaks are a major concern, sometimes the only option is to limit the number of people involved.  A more developed, “self-publishing” approach to communications could include things like a Fed broadcast center or newsroom that employs former journalists.

As many major PR firms have stated, self-publishing is a growing trend among corporate America and one that the Fed may want to explore itself.  At the end of the day, what is clear is that balancing the need for market fairness and accurate reporting is a complicated and relentless battle for the Fed’s communications leaders.

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Frankie Flack: The little engine of building reputation

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Last week, I happened to be listening to “Mike & Mike,” a morning ESPN Radio show where the hosts discuss the major sports news of the day.  That day they were discussing news how Ryan Braun, a player for the Milwaukee Brewers who has been accused of steroid use and suspended from baseball, was personally calling season ticket holders to apologize for his mistakes.

The hosts were debating the merits of Braun’s recent apology, wondering if it were a classy move or a shameless part of a PR stunt.  Furthermore, the host who thought this was a simple PR stunt was also convinced fans would not want to have a cordial conversation with Braun, but rather hang up on him or yell at him for being a poor role model to children.

The two sides of the debate were so sharply drawn, it struck me as the classic media debate over any troubled business (or business executive) and the difficult nature of rebuilding reputation once it is lost.

While I am in no way involved with Braun or his team of advisors, I do think he’s getting some good advice.  Well, at least he’s getting some decent PR advice right now.  That is because he is focused on the long, arduous and thankless task of actually building a reputation again with the people that matter.

As is so often said, a reputation takes a lifetime to build but is lost in a second.  I like to think that building reputation is akin to the little engine that could, it requires slow, steady and consistent performance over time.  No one action can give a company a good reputation.  Even donating $1 billion to cancer research, while admirable and positive, cannot give a company a sterling reputation in one move (though it certainly would be a big step in the right direction).

So if getting that little engine up the hill the first time was hard, getting back to the peak after faltering is near impossible.

What PR professionals all too often forget though is that good press did not get the little engine to the top of the hill in the first place and can do even less the second time around.  All the media does in building reputation is to help underscore performance, merely informing the world of an accomplishment, not creating one itself.

Which brings me back to the ESPN Radio piece.  The calls to season ticket holders was not something Braun was doing to make a big show of it, he was simply moving along the tracks toward recovering something of his reputation.  The vigorous debate only showed just how far he still has to go.

These same principles apply to rebuilding a business’ reputation.  Quiet actions move you down the track.  PR people who find themselves actively touting a battered companies image all the time also will continue to run into skeptical reporters that will only make that climb back to the top harder.

Let the business perform, and the media story will follow.

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Frankie Flack: The trouble with broadcast business news

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I’m a big fan of business news in all forms, print, online, radio and television.

However, I have to admit that, for me, business news is just better in print.  This is really fundamentally driven by the different business models of print and broadcast news that forces them to go after consumers in different ways.  One thing that broadcast media does tend to do better is foster debate among experts and demonstrate intangible qualities of business leaders.

But this isn’t a lesson on business models in the media world.

The result is that at the end of the day this creates a different dynamic between PR professionals and the anchors, producers and bookers involved in creating business broadcast news.  While there are slightly different dynamics with those three audiences, there are some general principles to keep in mind when working with broadcast journalists.

The first is that speed is paramount.  This applies to any interaction with media, but is enhanced even further with broadcast.  News stories are only a matter of minutes long, leaving little room to capture all the nuance of complicated issues.

When working with bookers, PR professionals should focus on understanding the segment being discussed and not necessarily balancing out the story with backgrounding, etc.  It is important to understand if the segment is one-on-one, who the anchor/s will be, where it will be held, when the guest needs to be present, etc.  The more the PR person knows about the segment the better they can prepare their guest to manage any issues.

Things change a bit when working with a producer, who has more editorial control over exactly how the segment will be positioned.  Here PR professionals should work much in the same way they do with print reporters, offering background information, answering questions on background and generally helping to shape the story.

In the typically rare instance of working directly with the anchor, the PR professional should quickly deliver a top line message but also (if relevant) push the anchor to ask key questions of the competition.

Most of all, PR professionals must always keep in mind that broadcast journalists are going to be incredibly quick and must keep the most salient one to two key points top of mind.  This is not necessarily the same key message for print, but the one message you would want to seen on the screen.

While my humble opinion puts print above broadcast, it is undeniable that broadcast news creates a dynamic that tests business executives in ways print simply cannot.

This is a critical dynamic that PR professionals have to carefully consider in all their interactions with broadcast journalists.

 

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Frankie Flack: Help biz reporters understand what they’re writing

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Writing business news is unquestionably an increasingly difficult task.  Each year its seems that the financial markets become more sophisticated and faster moving as companies become larger and more complex.

It is not an enviable task then to be the lonely reporter, who likely got into journalism due to some aversion to numbers, finance or business in general, to understand what is going on and then put it in terms their readership can understand.

No, this column is not going to be a big love letter to business reporters.  The point here is that the complexity of the financial markets and business universe creates a nearly impossible task for many business reporters.  I would argue that the decimation of local business sections around the world can be attributed to this fact, among others.  Conversely, it has also created many news outlets that do possess the skills to really dive into business news, but the resulting product is mostly unintelligible for the average citizen.

While I think there are serious problems with this structure from a macro-perspective, I am not going to use this column as an outlet to critique something so broad as media’s duty to its readership.

Consider the coverage of Goldman’s aluminum warehouses.  Some outlets dove into the nuances of commodities trading, LME rules and market imbalances while others focused on the basic functionality of shipping aluminum.  Unfortunately, the best story lies somewhere in between these two approaches.

What the divergence in readership knowledge means that PR people need to be ever conscious of both the background of the reporter and his or her outlet.  For example, the beat reporter at Bloomberg News will likely focus on different issues within a company then say the New York Post or even NBC News.

This tends to be a pretty easy issue to navigate, but it can become tricky when a company makes a move so complex that even the most sophisticated journalists need assistance in unpacking the news.  In this case, the PR person needs to be shrewd in helping journalists understand the issue and selective in choosing areas to underscore the nuance of key facts.

What I mean by this is that in a fast-moving situation where a good amount of confusion about the basic functionality of the announcement appears, a good PR person should not get bogged down in making sure reporters understand every little nuance involved.

This is something that many executives will insist on, but is often a fruitless effort that only incrementally helps the resulting coverage.

Typically, I will walk through the basics upfront, even if the reporter professes to be an expert in this area.  Many times I have found that this exercise of focusing on the simple functionality of the announcement allows both PR and reporter to level-set and makes it much easier to address questions.  Additionally, this exercise helps me keep everything straight in my head.

For example, in a litigation issue I would walk through what type of suit was initiated, where it was filed and what the court allows to happen next and then run through the main arguments of the case.

This way many of my answers will likely refer back to something I’ve already said.

 

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Frankie Flack: Reporters don’t have a team in a business fight

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A good friend of mine once told me that when it comes to business competition most senior executives would offer their first born child to gain one point of market share from a competitor.

While this is certainly an overstatement of biblical proportions, it is instructive to remember that while public relations tend to focus on the positive aspects of corporate existence (emphasizing a friendly working environment, respectful competition, new business wins, etc.) business is still business.  In that I mean businesses only truly succeed when they are growing and that reality creates fierce competitions.

Most of us in the public relations industry do our best to downplay direct competition with other organizations because (simplistically) customers — the most critical audience of all — almost never want to support a “bully.”

However, there are times when the day-to-day battle between sales people spills over into the media world, and a PR person has to fight it out in the press.

For example, when major brand name A sues major brand name B there is typically a lot of emotion internally and a lot of media attention externally.  First of all, for most companies getting all the way to fighting a battle in court is a big step and likely has put a fair amount of money on the line to do so.  Therefore, both sides have a lot invested in winning and want to win every battle, including the one going on in the press.

As a PR person, the first goal should be to support the business strategy.  Most often, press coverage of a court battle doesn’t do much for either side so it’s likely the recommendation is to not go out and pitch new articles.  However, that doesn’t mean the coverage and related reporter inquiries can be ignored either.

The PR person’s role is to engage with the media to ensure that your company’s side of the story is told fairly.  In certain cases, this may mean drawing attention to issues not yet covered but support your company’s overall argument.

For example, press coverage may not immediately pick up on the fact that Company A has a history of filing lawsuits and rarely wins these suits.  This is an important factual point that Company B’s PR person may want to draw attention to in conversations with press.

What often is lost in fighting a press battle though is that the reporters aren’t in on the fight.  Many times PR people will see an article that seemingly takes a side in the fight and yell at the reporter for being incompetent, etc.  This happens a lot, and typically there are good reasons for why the coverage appears slanted.

Some reasons might include being misinformed, a differing reading of the facts or (in some cases) the reporter has more facts than the PR person.  PR people should get corrections where warranted, push for proper context of key points but read all coverage from an objective point of view.

The point is that the reporter is simply the conduit to reaching a broader audience.  While internally executives could be ranting and raving about the press, it’s critical the PR person keeps a level head.  Remaining calm and focusing on having productive conversations with reporters, even reasoned arguments over a few key points, can go a long way to getting fair coverage.

When businesses battle in the press, victories are often won on the margins where saner heads tend to prevail.