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Anyone who follows current events sees images of Israel that suggest a country defined by conflict and violence. Yet Israel has also made substantial contributions to the global marketplace in such industries as technology and medicine. The challenge for Israel going forward is to make the world more aware of its hospitable business environment. Marketing professor Yoram (Jerry) Wind and David Pottruck, former CEO of Charles Schwab & Co., and now chairman and CEO of Red Eagle Ventures, talked with Knowledge@Wharton about steps Israel can take to improve its image.
An edited transcript of the conversation appears below.
Knowledge@Wharton: Our guests today are David Pottruck, chairman and CEO of Red Eagle Adventures, and Wharton marketing professor Jerry Wind. David, Jerry, thank you so much for joining us today.
The topic we want to talk about is Israel’s marketing challenge. We are looking at it on two different levels. The first is, what do you think is the challenge that Israel faces as a country in marketing itself to world opinion? Very often people tend to think about Israel as a region of conflict. What implication does this have for the business environment?
David Pottruck: I think that if you look at news stories written about Israel, they are almost entirely about violence and conflict. There’s almost nothing [positive], let’s say in America, that the average person gets to read about Israel. So when you have this overwhelming amount of information, which is about one topic — violence and conflict — that becomes your brand. That’s what you’re known for…. I think Israel needs to tell a different story, but that’s not an easy thing to do given the amount of news that comes out about the violence and conflict. So it’s got to be a really active, thoughtful, committed campaign if they are going to move their image beyond that.
Knowledge@Wharton: Jerry, what’s your take on the challenge that Israel faces?
Jerry Wind: I fully agree with Dave, and there’s a consequence of this. A survey a few years ago done among 28,000 respondents in 28 countries by the BBC found that Israel was the number one country with the most negative attitudes toward it in terms of promoting negative influence on the world, which is quite shocking. The only kind of good news about this, if one can look at it as such, is that the U.S. was [number] three. So we’re in good company. Unfortunately, Iran was number two. But it’s quite shocking that the outcome of this media coverage that Dave is talking about has led to these types of very negative perceptions of Israel and also led to boycott efforts in the UK — for example [boycotting] cultural exchanges and university exchanges with Israel. So I think it has huge implications and it has to be changed.
Pottruck: Let me give you an example. My wife was selected to be in an opinion survey a few years ago. The topic was: Is there a bias in reporting, between the Israeli point of view and the Palestinian point of view, in The San Francisco Chronicle, which is [the newspaper] where we live. They showed pictures, photographs and stories going back for several months to a theoretically objective audience. What you had was an overwhelming amount of photo coverage of slain Palestinians, with no photo coverage of slain Israelis. There are lots of [slain] Israelis, but the Israelis don’t publicize, don’t show photos of, the carnage that [results] from rockets coming out of Palestinian positions such as Gaza. So although I understand why Israel takes that approach, we need to be realistic about the nature of the coverage and the photojournalism that shows these horrible photographs of the damage caused by Israeli military retaliation. It’s almost always retaliation, but that doesn’t matter. It’s not the visual that appears in newspapers around the world.
Knowledge@Wharton: Based on what you both have said, it’s clear that there are negative perceptions about Israel as a country. This brings us to the second question, which is what kind of marketing challenges does this create for Israeli companies that are trying to market their goods and services to the world, [given that] Israel has such a small domestic market.
Pottruck: I’ll give you an example. I’m on the board of Intel. We are one of the major employers in Israel. A few years ago, I went to Israel to visit our factories, meet with our people, and meet with the venture capital community there that we support. I hadn’t been to Israel in 30 years…. I expected to see a state that was in a military lock-down because this was a few years ago when there was a lot of conflict going on. What I found was a country that felt like the United States. I mean, I thought I was in New Jersey. It was just same old, same old stuff. A little more security in some of the hotels that you went into, but it wasn’t in a state of lock-down or violence or people afraid to walk the streets, which is what you would think from the newspapers that you read. Therefore, I believe that when companies who don’t know better are thinking of doing business in Israel with Israeli companies, they worry about the security of the company. They worry about the security of their employees going to Israel. They start with a very big misconception of what it’s like for people to do business with Israel. This is a big burden — a huge burden.
Wind: I fully agree with Dave. Actually, you can even think about not only investing in Israel, but also about tourism and about what universities do. It’s quite often that universities follow the State Department requirement for restrictions in travel. Then suddenly students cannot travel to Israel. This is a major problem. The other aspect of the question is what does it do in terms of the ability of an Israeli company to market around the world? Here, the question is what type of industry and what type of markets are you dealing with? I have not done a study on this, but I would hypothesize that in the high-tech area, there won’t be much of a problem because of the reputation and the innovation of Israel in this [field] and also in the medical area. When you move to consumer packaged goods and others where you require acceptance by wider audiences, an Israeli company will face problems in countries where the image of Israel is very bad — especially if they are the kind of people who start seeing “Made in Israel” and then suddenly they have all the [negative] images they saw on TV. There may also be problems in areas [that involve] government purchases. If the government has a negative attitude, this definitely could affect the Israeli industries that are trying to sell to these countries.
Knowledge@Wharton: Jerry, what kind of efforts has Israel made to change this image, and to what extent have those efforts worked?
Wind: There are scattered efforts. There is an office within the foreign ministry office in Israel that is focusing on brand Israel. They have had a few initiatives. Typically they are centered on some major population centers. They had some ads in New York. They are scattered. They are not organized. And they never had the impact that’s required. We have tried over the years, especially through my involvement with the Interdisciplinary Center in Herziliyya, to initiate … more advanced approaches — especially when you start thinking today in terms of social networking and how you get started influencing masses of people by having a major presence on social networks and the like. But the receptivity has been mixed.
Knowledge@Wharton: What would be some of the reasons for that, David? What are the obstacles that Israel faces in improving its public image and how can they be overcome? Because as you were saying earlier, companies like Intel have actually been pretty successful at the kind of work they have done in Israel.
Pottruck: I think Israel has to have a clear sense of what the story is we are trying to tell. I recently saw an ad I think was for tourism in Israel and showed people running around the beaches and that kind of thing. I think that’s a gigantic waste of money. I can’t imagine that’s going to work. We need to mount an educational campaign. We need to leverage public relations. There needs to be stories told to reporters that are substantive stories about Israel, about what Israel is doing, about the good things Israel does. Israel even does good things in the Arab world. We sell and lend and support technology transfer to Arab countries. There are a lot of things going on in the more enlightened Arab community to partner with Israel. These are the stories that need to be told. There needs to be a thoughtful effort whose foundation is much more public relations than advertising. If anything, the advertising should follow the stories and reinforce the stories. But this notion that we’re going to run ads about the beaches of Israel and show people having fun vacationing is not well thought through.
Knowledge@Wharton: So what would be some of the strengths that Israel and Israeli companies should be talking about in this kind of campaign? Jerry?
Wind: I agree with Dave that advertising is not the solution, especially the type of ads they’ve been running. I would add to the P.R. focus the need to engage, to create platforms, to engage more people, to engage the companies, to engage the Israeli citizens. What’s interesting about the Israeli students in the U.S. is that it’s a huge number. If you engage all of them and start communicating with friends and others using social networking techniques today, I think it can have a huge impact. The problem, unfortunately, is that there is very little credibility for the government when they come [out] with statements. So you need to start showing the impact of what Israel is doing. If you can start showing how Israel has changed itself — if you think about the enormous development there — if you can see the impact it has had on other markets, including the Arab countries and others — if you can tell about the impact on medicine, which would be different without Israeli innovation in this area. Think about high-tech. Talk about Intel and the impact it has on every single person who uses computers today. Start focusing on the impact.
It reminds me. There was a great marketing campaign recently — the “Whopper Freakout.” There are two kids. The store is Burger King. And when people came and asked for a Whopper, [the store] said there’s no more Whopper. They videotaped the reaction of people to the Whopper.
What would happen if Israel did a day without Israel? How will the world look without the impact of Israel in high-tech … medicine or literature? Just think about the number of Nobel Prize winners who are Jewish and related to Israel over the years. Start emphasizing the good things. Move away from the current kind of absurd publicity that’s there. At the same time, we cannot ignore the issue of the Palestinians so we have to address it. We have to address it fast and effectively.
Pottruck: Picking up on what Jerry said, in a sense what’s needed is two efforts. One is the positive storytelling. If you think about Israel as the model democracy in the Middle East and as a place that’s exporting ideas and innovation to the world, you could build upon that as an example, as a foundation, to tell the story of Israel. [It’s the] model democracy of the Middle East. Everybody votes there — not just the Jewish population. The parliament — the Knesset — has representation from every part of society. They all get together. They talk about what’s good for everybody. The minority counts in that kind of a system. That story needs to be told.
But the other part that also needs to exist is coming out of a political campaign. Every political campaign now has its sort of five-minute turnaround of news. If there’s a bad news story, there is an immediate reaction. Bill Clinton really built this in his early campaign, [with] a war room to deal with negative stories, put out their side of the story, change the spin. Israel doesn’t do that. Israel needs to have a P.R. focus to defuse the negative stories and try to get its side of the story told. They … talk to themselves. They’re not sensitive to the importance of world opinion. So they have positions that are popular within Israel and there’s no thinking about how the rest of the world sees some of this stuff.
Wind: This war room has to be in every country. You cannot have it just centralized in Israel. It has to be in every country, in the local language, responding immediately and with visuals. Israel should have the war room in Israel the same way it provides the military side, the communication side. Israel has been losing the communication war.
Pottruck: The Israeli government has to understand how important this is. For the cost of one jet, they could do all this. And it’s almost as important, because we are definitely losing the world opinion war and it’s getting worse and worse. Israel is getting more and more isolated and that’s very sad to see.
Knowledge@Wharton: Some countries that have had problems with world opinion — say for example, India or China — have successfully leveraged platforms like the World Economic Forum in Davos to help change the perceptions of world opinion. Has Israel tried such tactics and to what extent? What has been the outcome?
Wind: I’m not familiar with any serious focused effort in Davos. I know a lot of Israeli politicians and a few business people who come to Davos, but it’s not with a focus on trying to do that. We can go actually closer to home. Look at the problem of the U.S. in terms of the U.S. image around the world. There is a group that I’m kind of on their advisory board — the Business for Diplomatic Action — that’s really trying to mobilize business to try to improve the U.S. image around the world. There is no such group in Israel. So definitely, more can be done, but I think it has to be done by everyone. The government has to obviously provide the information, the visuals, so we can provide the ammunition that you need. Businesses have to do it. Citizens have to do it. Students have to do it. We need a massive effort to try to change the current perception.
Knowledge@Wharton: David, you referred earlier to telling positive stories. As far as companies go, what are some of the experiences that international companies doing business in Israel have had? How have they leveraged Israel as part of their global strategies?
Pottruck: I think Israel is an incredible center of innovation, especially in technology and medicine. Companies that are in those businesses know that you would be simply foolish not to reach out and figure out whether Israel has something that you can leverage in your [area]. There’s a lot of B2B selling. Most of the products coming out of Israel are business-to-business. They become components or pieces, or they get repped by other companies. I think if you talk to venture capitalists and high-tech companies where I live in Silicon Valley, they would all tell you that they’re going to Israel on a regular basis. They are meeting with the business community there trying to establish relationships to see what kind of business opportunities there are. Knowledgeable people in the world of high technology and medicine know that you would be foolish to avoid Israel because their thinking and their innovations are breakthrough and [they lead] the world. So that story is told. That already happens today, and I don’t think Israeli companies selling business-to-business are really suffering very much because their reputation is that strong.
Knowledge@Wharton: What was Intel’s experience like in Israel?
Pottruck: Twenty-something years ago, [CEO] Andy Grove went to Israel and hired four people to become a development lab for Intel. Today I think we have somewhere between 6,000 and 8,000 employees. Our most high-tech products often come from Israel. Our head of technology is an Israeli who is now living in California. We have three or four factories scattered around Israel, so it is a very, very important part of our infrastructure at Intel.
Knowledge@Wharton: Jerry, any other examples of successful Israeli companies that have done a good job of marketing themselves that other companies could learn from?
Wind: I can’t think of any Israeli company that will serve as a role model for marketing, but I can definitely think about numerous companies that, as Dave said, benefit from Israel technology. Microsoft. Almost all major high-tech companies have a presence in Israel today. As we see increasing focus on open innovation, especially among U.S. companies but also other companies around the world, Israel is definitely part of the open innovation strategy. So I don’t think that this is going to dramatically change the topic we started with, which is the poor image of Israel as a country. But I think we can leverage this in terms of getting to the masses, getting to the people who are currently influenced only by the stories they see on TV, if they [come to] know more about the impact of this high technology innovation and medical innovation. But in the marketing itself, I cannot think [of] too many Israeli companies that are setting the pace.
Knowledge@Wharton: That may be a part of the challenge. I have one final question for each of you. Let’s assume that there is a fourth seat at this table and that Mr. Benjamin Netanyahu is sitting here. What advice would you give him about improving the marketing of Israel? David?
Pottruck: I think that the Israeli leadership is pretty consumed with talking to themselves. They almost feel to me tone deaf in terms of how they portray themselves to the world. I wouldn’t say this about every one of the leaders, [and] perhaps the political climate there is so difficult and the coalitions that are formed are so difficult. But it feels to me like there’s not enough concern about world opinion. It’s sort of, “This is who we are. Take us or leave us. We’re pretty wonderful. You should like us.” That’s not good enough. So my advice would be the things we’ve talked about today. Pay attention to world opinion. Believe that you can influence world opinion. And spend the time and money to accomplish that. It’s worth it. It will make a difference. That would be my advice.
Wind: I think Dave’s advice is terrific. I would suggest that [Netanyahu] basically do three things. One, the government should appoint a czar, or a champion, who will try to coordinate and provide the war room of communication that will provide almost instantaneous information — especially visual — all over the world to anyone who wants to use it to try to counter the attacks on Israel. Two, to use his incredible skills to encourage everyone in Israel to engage in communicating. I don’t think just the government alone can solve the problem. So you have to encourage everyone. Encourage the students who are everywhere around the world. Encourage companies. Encourage tourists who are coming to Israel. Encourage everyone to start carrying the positive stories that Dave was talking about. Hopefully there’ll be a link between the two initiatives because they provide the material, the information, they need for doing it. And, third, I think he should first of all allocate some resources for this. Taking the price of one jet is a great starting point. And perhaps even establish the prime minister award for the best efforts in improving the image of Israel.