The inevitable Results of ‘leaking’ all over your established Press

The inevitable Results of ‘leaking’ all over your established Press: Editors are moving away from NDAs as a result.

Or

Embargo and Embellishment

Or

Obligations and openness
By Rachael Dalton-Taggart

The CAD press had a moment of outrage last week when it was found that various CAD blogs had leaked all over the upcoming AutoCAD 2006 upgrade. Worse! Their ‘little accident’ occured before the embargo, signed by all the CAD press, had expired.

In brief: it seems that certain Autodesk employees as well as some beta testers of the software were given permission by Autodesk to publish features of AutoCAD 2006. The CAD press, who signed embargoes back in December of 2004, had agreed to reveal no details until March 15th 2005 - more than a week after the bloggers had their say. AECnews editor, Randall Newton, did a particularly good job of outlining not only what occurred, but also the likely results of this. I strongly recommend you read this at: (http://aecnews.com/articles/973.aspx)

Autodesk’s response was to cancel the embargo immediately and then send an email out from Tracey Stout, VP of Worldwide Marketing at Autodesk, to all press on Friday March 11 2005. It reads as follows:

“On behalf of Autodesk, I would like to convey our sincerest apologies about the unexpected blog coverage of our 2006 products.
I want to assure you that we value our relationships with the media greatly. We have worked hard over many years to develop those relationships, and would never do something intentionally that would strain those relationships.
Last week, some well-intentioned members of our marketing team, without consulting Autodesk Public Relations, invited AutoCAD 2006 beta sites to blog about their experience with the products. They hoped the publicity would help their marketing efforts. Unfortunately, these individuals did not consider the broader effects of their actions on the reporters we had asked to adhere to a non-disclosure agreement prior to launch date. Simply stated, the leaking of information was a mistake. Regardless of how it happened, we recognize these events placed all of you in an extremely difficult position and understand your displeasure at the situation.

I want you to understand that the invitation issued to all of our AutoCAD 2006 beta customers was not, in any way, intended to undermine the role of the press as independent and fair reporters on our company or its products. Autodesk did not guide these customers to post only positive comments. Indeed, we believe firmly that blogs are intended for honest, open communication.

As proud as we are about the products we produce, we recognize and welcome candid reactions to them. We have learned from this incident and will be implementing better internal communications processes, to prevent a repeat of this situation. And I will work personally with the entire company to do everything we can to restore an atmosphere of trust between Autodesk and the press.”

Screw up or what?

The questions are many: did Autodesk PR know about this, and maybe even orchestrate it? Or did Product Marketing do an end run around the PR department? Will this practice continue and perhaps become prevalent in the industry and what will the outcome be? Who did the end run?

Martyn Day, editor of MCAD and AEC magazines (www.cadserver.co.uk), and whose opinion I respect greatly, believes Autodesk PR was in the dark. He comments that the sound of shock when he spoke directly to the PR people could not have been faked. Martyn, who never hesitates to be highly and vocally critical of Autodesk, is surprisingly sympathetic to this situation. A couple of other editors have backed up this opinion.

So if the Product Marketing Department made an end-run around the PR department, my question is; how this could have been allowed to occur in a publicly-traded and respected organization? There’s enough experience in Product Marketing to understand how this could upset the press, and even if you attribute it to some overzealous individuals, skirting around standard process should never have occurred.

Another more dangerous possibility is that these actions could be viewed as Autodesk skirting somewhat ungracefuly around the SEC’s Reg FD (Regulation Fair Disclosure) which addresses selective disclosure of material information. Is a product release ‘material information’?

It can be argued both ways, but Investor Words (http://www.investorwords.com/3011/material_information.html) describes it as follows: “Information which would be likely to affect a stock's price once it becomes known to the public. Examples include a takeover, a divestiture, significant management changes, and new product introductions. Also called material news.”

In Autodesk’s defence, they immediately lifted the embargo for the rest of the press – within the 24-hour Reg FD requirements – so that the material information could become appropriately widespread.

The flexible truth

Although it appears that Autodesk PR has been dropped ‘right in it’ by the product marketing department, they are apparently still not above bending the truth a little to suit an advantage.

Here goes: Shaaun Hurley and the others who blogged the features all indicated that ‘selected’ bloggers were given permission to publish. In the second-from-last paragraph of the Friday 11th email, Stout says that the invitation was issued to all 2006 beta customers. Why say this? I assume it is to try and protect the integrity of the positive comments made by the bloggers. All the CAD press I have spoken to have said that they are impressed with the new product itself and most of the comments are on the mark, but at the same time that should be no reason for Autodesk PR to risk getting itself caught in a public fib.

The timing of the release of information is also interesting: by the time the bloggers revealed AutoCAD 2006 information, any print publication working within the embargo would already be at the printers…i.e. while the editors might be pissed, there would be little they could do. Only the online-only publications would be able to react in any material way, and they are still not in the majority in the industry. Was this deliberate timing? We can only speculate.

What is the outcome of all this?

It seems obvious that the evolution of blogging is changing the accepted landscape: the presence of bright people with ears (who therefore hear things) is inevitably going to lead to more widespread (and sometimes inadvertent) leaks of information and probably the devaluation of the press embargo. Several articles in business publications are indicating that while credited editors tend to follow embargoes, people who are not party to those embargoes and yet obtain information have no hesitation revealing it – whether the disclosure was deliberate or not by the ‘owner’ of that information. This is an avenue that can – and already is – being exploited by the information-savvy (as demonstrated during the US primaries and presidential elections) but can also really drop a company in the slime: If a release of information is not closely controlled, inadvertent releases of information can affect the perception of a company as well as the share price…and will really make the Investor Relations guy grow grey hair.

Please note, though, that the bloggers involved in this debacle already have iron-clad non disclosure agreements with Autodesk – either as employees or as beta testers. These people are well trained (as in the ‘sit’ and ‘stay’ variety of training) and I believe that they would do nothing without Autodesk’s direct instruction. If Product Marketing allowed this to happen, I believe they did it deliberately and in full knowledge of the consequences (even while they kept PR in the dark.)

Blogged down?

Had Autodesk not lifted the embargo immediately, several editors say that they would have considered it null and void at that point anyway. According to emails I have received, CAD editors are indicating the following things for the future:

First, they will be very very wary of signing future NDAs with Autodesk…and with other vendors. The general movement with editors is against NDAs and embargoes anyway, and this simply provides more foundation for avoiding them.

Second: In short the press are pissed – at Autodesk for this one. While they will still be publishing information about AutoCAD 2006, the chances are that the editorials will be shorter for the online publications (but not print as raised earlier). Editors, though, often have a way of gaining subtle revenge – perhaps shorter editorial and reviews in the future, more blatant criticism that perhaps would not have been brought to the forefront in prior years. “Autodesk are ‘on probation’ in my mind,” says Randall Newton in reference to this issue. The future We will all end up exploiting blogging to our, hopeful, advantage. In my mind this is a given. But maybe we can observe and learn from the mistakes that will be made – and evidently have been!

My thoughts:

1) Do not reveal information a week before a binding NDA contract is about to expire. In fact, if you know you can’t keep your mouths shut, don’t have an NDA but simply reveal the information to all parties when the time is right.

2) Remember that if your employees and your beta testers are going to reveal information early, that readers may just consider that there may be a bias

3) Remember your obligations to the SEC (if you are a public company) and ensure that your employees are scared witless about the possibilities of jail ensuing from revealing information of a material nature.

4) Don’t let the Product Marketing team perform a neat end-run around Public Relations. Talk about making a company look inept and Autodesk seem to have achieved that in the eyes of the press!
Another member of the press who will remain nameless attributes this to Tracy Stout’s aggressive handling of Autodesk’s Marketing and PR in the last 12 months or so. His take is that Stout has little or no understanding of PR and prefers it that way.

Comments

[Racer X]

Either Stout is a genious at getting much press for nothing and marketing-pr types are suckers for falling into this trap.

OR

Stout is an idiot.