In my blog of February 10, I was both intrigued and skeptical about the“ Pepsi Refresh” initiative. Intrigued, because it represented everything that an ideal interactive campaign can be – “creative, innovative, highly engaging and very popular, while building on the brand in a fun and social way.” Skeptical, because Pepsi was to grant large sums of money ($5,000 to $250,000) to charities (within selected categories) based on a populous vote of “friends and peers.” Critical thought as to urgency or evaluation of need, did not come into play.

Still, my skepticism faded rather rapidly as Pepsi came up with another angle within its campaign — its “Do Good for the Gulf” Refresh campaign, which has awarded 32 grants each month worth $1.3 million. Now Pepsi has invited consumers to submit ideas that could “refresh the communities of the Gulf states,” through July 16 and has pledged another $1.3 million. Starting August 2, consumers can vote on the ideas they like best. Finalists will be announced on September 2, and grants will be awarded on September 22.

For big brands to spend money on major causes is not new. Nor is it new for big brands or companies to get behind a disaster and offer funds and equipment as needed. If it is also somewhat self-serving, and is based on an ulterior marketing motive, so be it. Still, marketers would do well to note how well the Pepsi’s Refresh campaign worked in that it has empowered the consumer and rallied the public-at-large to come up with ideas in support of a disaster, in this case, the Gulf Oil disaster.

It’s a fine line to cross, however, and can be seen as opportunistic.

In this case, Pepsi has gained recognition for outstanding corporate social responsibility (CSR). It has earned it in a substantive way, for the Refresh Project has given more than $7 million in the first five months of the year and expects to invest at least $20 million in worthy causes.

And it has raised a populous conscientiousness as to charities. How does that get rewarded?

Special guest post by James Flanigan. James Flanigan is a business columnist for The New York Times, The Los Angeles Times and other publications and has covered national and international business and economics for 46 years. James’ blog and information about his current book can by found at: http://jamesflanigan.com/.

For almost half a century, I’ve experienced public relations from the other side of the table, as a business journalist. So I’m going to tell a few stories, parables if you will, with points about PR in each one.

I’ll begin with a public relations man who did his job well and helped me at the same time. I broke in as a business reporter with the New York Herald Tribune, assigned to cover the oil, chemical, pharmaceutical and tobacco industries. Jack Gillespie was public relations for Socony Mobil, as the company was then called, and he figured it would be good if a reporter covering the industry also understood it. So he set up interviews not with top executives but with working oil men who were on temporary assignment in Mobil’s New York offices. Typically, a crusty fellow, uncomfortable behind a desk, would explain the economics of exploration, say, or how natural gas occurs along with oil and can be recovered.

Gillespie didn’t gild the lily; there was seldom a direct connection to a story about Mobil, but there was an indirect one in that industry stories were at least knowledgeable. In any event, no story comes from a single source and critical comment is always available–in those days it was from upstarts like Occidental Petroleum or ENI, the Italian state oil company, which were shaking up the solid front of the major oil corporations.      A contrast is a story about British Petroleum, which has run into horrendous public relations trouble currently. In the late 1990s, after BP had acquired Amoco and was preparing to buy Arco, I interviewed its chief executive John Browne, later Lord Browne. Browne, to be sure, had intelligent perspective about the industry, but he was already preaching the company’s “beyond petroleum” environmental message.  I wrote a column in the Los Angeles Times after that interview but in subsequent meetings it seemed to a skeptical reporter that image building grew into hype. I didn’t write and declined later offers of interviews because reporting is not stenography and interviews, even with CEOs, do not necessarily a story make. The point is that business is a human story and the most important quality a company can convey in any PR campaign is integrity.

So, I’ll tell one more story about an executive and the late, great business editor James W. Michaels of Forbes Magazine. Each year at Forbes, staff writers had to contact CEOs to compile information for the Jan. 1 industrial rankings. It was tedious work, often to get a boilerplate quote from the CEO. But I called Nathan Cummings, the founder of Consolidated Foods (later Sara Lee Corp.) and he was delightful and informative about the industry and the company. So I asked Michaels why if this guy is so informative, are others dull and evasive? And Jim explained: “Nate owns the company” (which was nonetheless public). “The other people are just hired hands, afraid if they say something in Forbes, they’ll lose their job or be in hot water at the country club.” In PR terms, that tells you not only what you want in a client but what to understand about editors.

Following is the next video in a series celebrating The Pollack PR Marketing Group’s 25th Anniversary:

Treasure the journalists, for as former WSJ.com reporter Jason Fry recently commentated, digital media may very well be the end of  journalism as we know it today.

Whereas that may sound somewhat dramatic, you have only to look at the digital media site that Fry mentions, Demand Media, as well as other similar ones like Associated Content or AOL’s Seed — the so called “content mills” or “content farms” — so nicknamed for the large volume of content that they churn out, based on a set of algorithms of popular search queries.

On such sites, topics are usually selected by low-paid freelancers who, because the economics of these sites’ business model that don’t allow time for several rounds of edits, fact-checking or further investigative reporting, write in a one-draft style, written with the intent to lure, as well as satisfy advertisers.

And now comes another entry in this arena, Yahoo’s new blog dubbed The Upshot.  In an interview with The New York Times, James A. Pitaro, vice president of Yahoo Media, said that their newly launched news blog, will create content “in response to audience insight” aggregated from Yahoo search and popular search queries, to guide its reporting and writing on national affairs, politics and the media.

Where is the validity of the news if  subjects are only selected to attract eyeballs and sell ads?

In contrast, journalism, to date, has been about not just informing readers and listeners, but also about illuminating something for readers, giving them a perspective that might trigger new thoughts and opinions.  I am speaking about the professional journalist — the ones who are passionate in the pursuit of a story who, by the very nature of their profession, understand how to research a story, are relentless in their hunt for facts and substance and who are able to organize their thoughts in a way that actual “tells” the story in a comprehensible way.

Demand Media has issued strong protest about being called a “content farm” and bristles at criticism of their editorial content.

Maybe both sides deserve consideration.   Maybe the word that is new and arbitrary here is “content,” which gets confused with news, but is not news.  And the “farm” or “mill” parts refer to mass content, or quantity versus “investigating reporting” quality.  Maybe digital media is about advertorials without a new labeling system.

So, for now, “content mill or farm” may fit, until new terms are found and adopted to separate digital media from journalism as we know it.

Look, advertising has always been the life blood of most news generating publishers, online or not, but the traditional wall erected to separate editorial and advertising has got to keep standing to allow for independent reporting.

But in light of digital media sites being so hot and rich, (Demand Media generated more than $200 million in revenue in 2009, and is now planning an initial public offering) that wall may very well come “a-tumbling down.”

Special guest post by Chris Paine. Chris directed “Who Killed the Electric Car?” His next film, “Revenge of the Electric Car” is set for release 2011.  Currently, he is working on two projects related to the oil disaster in the Gulf of Mexico. http://www.facebook.com/revengeoftheelectriccar http://www.facebook.com/chris.paine

Exxon Valdez veteran marine toxicologist and author Riki Ott (“Not One Drop”) laid out some disturbing comparisons of the two oil disasters during our recent shoot in Louisiana.

BP is using the same playbook Exxon used on us in Alaska.  It’s all about minimizing liability and damages in court. So right off the bat, BP is underestimating how much is spilling, understating harm to the environment, claiming  dispersants are “safe” and “not toxic” to marine life, and putting workers at risk because BP doesn’t want to supply respirators. BP says it will pay all “legitimate” claims, but what this means is ‘see you in court.’ Same old story with Exxon.

Here are a few examples:

1). Broken Promises:  The oil industry makes false promises to get permits:

-Exxon: Promise: Double hull tankers and advanced vessel tracking so ‘not one drop’ of oil would spill in Alaska.  Actuality: Single hull tanker grounds, destroying pristine ecosystem and fishing industry for decades.

-BP:  Promise: State of the art drilling platforms with fail-safe safety procedures. Actuality: Multiple reckless decisions lead to massive oil spill threatening wide destruction of Gulf ecosystem, fishing  and tourism.

2). Manipulate Government Regulations

-Exxon:  Manipulate government regulatory bodies to receive multiple exemptions. Examples: A) Take advantage of OSHA exemptions for colds and flus to mask chemical poisonings of cleanup workers  B) Convince EPA and Coast Guard to rubber stamp contingency plans like using low grade “mill pond” buoys instead of “ocean grade” buoys. C)   Circumvent vastly variable effectiveness  of dispersants for different oil grades by persuading EPA to create one “compromise” effectiveness rating D) Convince EPA to sign off on toxicologist reports for dispersants that have only  been tested on older animals, not juveniles.

-BP: Examples A-D above still apply.

3). Spiller in Charge

The oil polluter becomes a ‘super state’ in charge of running response and cleanup. America leaves spiller in charge of cleanup. The Coast Guard sides with industry.

-Exxon:  USCG signed off on “miles of beaches” treated. USCG backed up Exxon’s control of images.

-BP: Signs of similar activity.

4). Under-Reporting Spill:

-Exxon:   In Alaska, Exxon reported up to 3 times less oil spilt then estimated by independent experts.

-BP:  IN Gulf, BP at first estimated  its spill at 1000 barrels of crude oil per day, then increased it to 5000 once researchers said it was at least this much. Now independent researchers using satellite images estimate as much as  70,000 barrels a day.

5). Under-Reporting  Cleanup

-Exxon: Said that it recovered 10 to 12% of oil on beaches in Prince William Sound but this was based on its own underreported spill size. When you take actual spill size into account, Exxon actually only cleaned up about 4%.   Eyewitnesses reported as much of 80% of recovered “oil” as being water in the last of three tankers that off-loaded “oil” from the stricken Exxon Valdez.

-BP:  Initially claimed to be recovering 20% of spill with its first siphon but this was based on inaccurate flow meter data . Later estimates for recovered oil per day are considerably lower

6).  Minimize public perception of impact

- Exxon: immediately put a flight restriction over area to prevent photography. It also required cleanup crews and workers not to talk to media or take photographs

-BP:  Many reports of similar measures. Dispersants used to prevent visible oil slick. Massive messaging effort to minimize public and government reaction.

7). Sick wildlife

-Exxon.  Ecosystem collapsed 4 years after Exxon Valdez spill.  Pink Salmon eventually recovered but Herring fishery utterly collapsed and 15 of 24 species have not recovered 21 years later

-BP:  Effect of oil and dispersants still unknown — and NOAA has not yet initiated comprehensive ecosystem studies despite vast extent of oiled estuaries and marshes.

8). Sick Communities

-Exxon.   Medical and social trauma caused by collapse of fishing industry never anticipated or compensated.   Domestic violence, divorce, suicide, drugs, and depression rates due to financial stress and cultural dislocation were at historic highs for 20 years with PTSD as high as 99% increases.

-BP.  Hospitalized oil clean up workers.  Already signs of severe financial stress amongst unemployed fisherman just recovering from Hurricanes Katrina/Rita.  Cleanup workers facing illness without proper protection.

9). Minimize liability, Write off legal costs

-Exxon.   Exxon appeals $5 billion punitive fine for 20 years until claim to reduced to $507 million – about 10% of original claims. Legal fees become a business expense, written off against revenue from taxpayers.

BP: ‘We will pay all legitimate claims’.  “Translation?” says Ott, “See you in court.”