It is a judgment with relevance for the rating industry, namely the judgment of the Frankfurt am Main Higher Regional Court on unfair camouflaged advertising when considering paid product reviews within the overall rating result of a product.
If the overall evaluation result for products offered on a sales platform also includes reviews for which the reviewer is paid a fee, albeit a small one, this constitutes unfair disguised advertising if the consideration of these paid reviews is not indicated.
With its decision announced June 9, 2022, the Frankfurt am Main Higher Regional Court (OLG) has confirmed the cease-and-desist obligation imposed by the regional court.
The plaintiff offers the paid mediation of customer reviews on the Internet. The plaintiff’s customers are exclusively dealers on online sales platforms.
The defendant operates the sales platform amazon.de.
The products are rated there using an overall star rating system.
The defendant also provides its sales partners with customer reviews for a fee as part of the so-called Early Reviewer Program (current version: ERP). These are reviews by foreign reviewers for a fee or vouchers for products that were previously purchased on the US, UK or Japan marketplace. These ratings are also displayed to German buyers and are included in the overall rating result.
The plaintiff objects to the publication of ERP reviews if they become part of the overall rating result and it is not pointed out that the reviews were paid for and how many of these reviews are part of the overall rating result.
The defendant’s appeal against the cease-and-desist obligation pronounced by the regional court was unsuccessful before the OLG. The Higher Regional Court confirmed that there was unfair, camouflaged advertising.
Publishing ERP reviews without indicating that the reviews were paid for and how many reviews are part of the overall rating is unfair. The fact that these ERP reviews were taken into account – and therefore not their share either – was not indicated by the defendant and also does not result from the circumstances.
Whether Internet users expect that reviews that are not factually justified will always be included in an overall rating result can remain open. In any case, this should not “be a license to use influenced reviews,” the Higher Regional Court clarified.
The consideration of ERP reviews also has business relevance here:
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Just a few years ago, a cereal was linguistically associated with Kellogg’s. Anyone who spoke of Kellogg’s in Germany thought of cornflakes and vice versa, anyone who thought of cornflakes would also think of Kellogg’s.
In the meantime, discount chains – from Germany for example – such as Aldi and Lidl have revolutionized the world of brands. Lidl in particular attacked the big brand names directly in a spectacular advertising campaign. In 2016, Lidl began to directly compare famous branded products with its own brands and explicitly give the customer the choice of choosing the more expensive branded product or a much cheaper comparable product. The customers have made the choice, some branded products are still around today, others have completely disappeared from the shelves.
Perhaps unnoticed by many, a brand name that had been known for decades in almost every American household and even worldwide – at least among bond issuers and professional investors – disappeared. The curious thing about this story is that the brand is still being talked about even though it no longer exists. Anyone looking for this company has to use an intelligent search engine that remembers the story and therefore directs to the right page. If you search under the old name among the official registrations, you will no longer find what you are looking for. The valuable brand name appears in a footnote at best.
For the company of a rating agency, the most valuable thing is its history. The ability to correctly forecast the solvency of companies and other bond issuers can only be demonstrated over a long period of time. Trust in a rating agency develops very slowly; in the case of the leading agencies, it developed over a century. Trust in the rating agency is inextricably linked to its name. Analysts and computer models can also be quickly bought by other agencies and put on the greenfield. However, the history and corporate culture of a credit rating agency cannot simply be reproduced and is therefore a valuable asset.
For supervisory authorities such as the European Securities and Markets Authority (ESMA) as well as for the European Central Bank (ECB), the history of a rating agency is of decisive importance for the recognition, be it as a registered or a certified credit rating agency. Renaming in the agency does not play a role for the purely legal recognition. However, expectations of market participants and users of credit ratings are associated with the age of the name.
If a rating agency abandons its name, it can continue to protect the abandoned trademark if necessary. From a purely legal point of view, the old brand name may still be protected, but economically it has been given away.
2016 was also a memorable year for the US rating agency Standard & Poor’s
Standard & Poor’s Corporation was an internationally known credit rating agency. It was created in 1941 from the merger of the American companies H.V. & H.W. Poor Co. and Standard Statistics Bureau. As an abbreviation, S&P quickly caught on. Until the 1970s, the agency’s business activities could be compared to a publishing house rather than to the research and credit departments of banks.
In the 1990s, almost all of the agency’s products were also offered on paper and not primarily electronically. A parent company like McGraw-Hill, which is itself a publishing group, fits such a “publishing company”. McGraw-Hill was an American publisher founded in 1909 and based in New York City, known for textbooks and school books and financial information services.
In 1959 they had sales of $ 100 million. In 1961 they took over F. W. Dodge Corporation (which had its focus on the construction industry) and in 1963 the Webster Publishing Company, with which they entered the market for textbooks for elementary schools and high schools, which they expanded in 1965 with the takeover of the California Test Bureau. With the takeover of Shepherd’s Citations in 1966, they moved into the field of legal books and with the takeover of Standard & Poor’s in the same year in the field of financial information services. In 2011 it was split into S&P Global and McGraw-Hill Education (taken over by Apollo Global Management in 2012).
5 years after the break-up of the group, the famous brand name finally came to an end. S&P Global had hired a global brand transformation company to develop a unified branding strategy: Landor, founded in 1941 by Walter Landor, who pioneered some research, design, and consulting methods that the branding industry still uses. Landor has also advised Coca-Cola and Kellogs.
Landor belongs to the WPP group of companies: WPP plc is a British multinational communications, advertising, public relations, technology, and commerce holding company headquartered in London, England. WPP’s brand consultancies Landor and FITCH have now grouped under one entity named “Landor & FITCH”. Since January 2019, FITCH has been part of the Landor family under new stewardship. FITCH should not be confused with rating agency Fitch Ratings.
While the consultancy itself kept its 1940s name, they recommended Standard & Poor’s to abandon the 1940s name. Landor was founded 1941, Standard & Poor’s formed in 1941. In 2016, the year in which the discounters started their massive attacks on the established brand names, the brand name Standard & Poor’s was abandoned, while Landor continued to use his famous name. The renaming took place at a time when the defense of brand names was particularly important.
The addition “global” is particularly old-fashioned and out of date: As early as the turn of the millennium, the internet economy made it clear that practically every company can claim to be globally active. Even the information that is held by the smallest companies is accessed worldwide, as the example of RATING EVIDENCE GmbH from Frankfurt am Main, Germany, shows. The map traces the countries from which the website was able to record visitors (as of September 4, 2021):
As the following retrieval from September 4, 2021 shows, the name “Standard & Poor’s” can no longer be found on the agency’s website itself in all documents since 2016. If you search for the old company name, you will find documents from 2015 or older:
The famous name of the rating agency is no longer written out anywhere. If the old documents are deleted one day, the name will even disappear entirely from their own website. Anyone looking for the name “Standard & Poor’s” will one day no longer find what they are looking for at the agency.
Although the internet has grown exponentially in the last 5 years and the number of information offers and bloggers has increased significantly, there are still many more sites that speak of “Standard & Poor’s” and not of “S&P Global Ratings”.
An estimate of how many pages the term “S&P Global Ratings” is used on can be determined using the Google search engine. In terms of search results, it must be taken into account that tens of thousands of pages have already been published by the rating agency itself and may be part of these search results.
Despite the dramatic growth of the Internet in the last few years, there are still more pages quoting “Standard & Poor’s” than “S&P Global Ratings”. Anyone who thinks that these are just old pages that have not yet been updated can be convinced of the opposite:
The agency is also still listed under its old name in the popular Internet reference works:
Google Scholar provides a simple way to broadly search for scholarly literature. Search across a wide variety of disciplines and sources: articles, theses, books and so on. Students and scientists from all over the world use this database. Here, too, it becomes very clear how the attempt to establish the new brand name has failed:
Standard & Poor’s is one of the few companies that has made a name for itself in school textbooks. Anyone who studies investment and finance at one of the business schools will sooner or later hear from the credit rating agencies and, among them, in particular from the two market leaders Moody’s Investors Service and Standard & Poor’s. In the United States, the CFA Institute is one of the most important educational institutions beyond the business schools. The CFA Institute plays a role similar to that of the German Association for Financial Analysis and Asset Management in Germany. The CFA Institute is a leading organization for the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society. There can hardly be a greater honor for a rating agency than being a name that is part of the examination knowledge for professionals, the knowledge relevant to the exam for professional competence.
Even this important institution did not get the name change. All documents on the website can only be found under the old name “Standard & Poor’s”, but not under the new name “S&P Global Ratings”:
All of this leads to a sober balance: the rebranding has not been successful in the last 5 years. As has already been shown earlier, there is no mention of the new name even in specialist circles. For companies like Apple or Coca-Cola it is clear that the brand name is a valuable part of the company.
Who would think of renaming Coca-Cola to “CC Global Drink”?
The following world map of “Google Trends” shows in which countries Standard and Poor’s was searched for for the last 12 months up to September 4, 2021. Such a map can only be displayed on Google Trends if a sufficiently high number of search queries have been registered. The world map speaks a clear language, because it shows that many Internet users still make the effort to type in the long company name “Standard & Poor’s” into the search engine in order to find the rating agency. Judging by the number of search queries, the renaming does not seem to have arrived in these countries in particular: Germany, Sweden, Portugal, Switzerland, and United Kingdom.
A famous and traditional brand name became a senseless combination of letters and words. If the name “Standard & Poor’s” is no longer used anywhere and is not cultivated as a brand, it is completely forgotten where the name came from. With the renaming without history, the memories of the story also end. In this credit rating business in particular, it is all about showing off many years of experience and expertise.
The credit rating agencies have gone through many ups and downs over the decades of their activity. In the dot-com bubble, promises made by companies that promised new markets and “a new economy” were lightly believed. In the global financial crises, rating agencies were blamed for overly optimistic ratings. All of these events left deep wounds that have long healed. Hence there is no need to give up a good name for a “letter salad”.
The rating agency “Standard & Poor’s” had demonstrated that it could learn from mistakes and draw conclusions. The undesirable developments were cracked down on. The rating agencies were subjected to even stricter regulation in the USA and comprehensive legal control in Europe. Laws have also been passed in Africa and Asia which give rating agencies a special status in many countries.
The services of a rating agency are not like an app from an “AppStore” that was only invented a few years ago, in 2007. In the dynamic environment of apps and webs, name changes may correspond to changed user needs in quick succession. The strength of the leading agencies lies in the fact that they have used comparable rating symbols and scales for decades, which promise comparability and continuity. The renaming of the agency did not reflect the nature of the agency’s activities.
“Four businesses unite as one financial powerhouse“: The renaming appears to follow from a disregard for the meaning of names. A name always stands for visions and demands on the future. If you chop up the name beyond recognition, you also violate the identity of the company. The names “S&P Global Market Intelligence”, “S&P Global Ratings”, “S&P Dow Jones Indices” and “S&P Global Platts” suggest a comparability of the diverse activities, which is not given in reality. On the one hand there are companies that provide factual market information, on the other hand there is a rating agency that draws up analysts’ opinions.
Again questions arise about the brand names
Recent corporate development events raise the question of how the corporate group’s branding should be structured. The experiences from the unsuccessful relaunch of 2016 must be taken into account. Brand names alone can be worth billions. To destroy a brand name means to destroy value for the owners. The owners of the brand names do not sit in the consulting firms, but in the general meetings of the shareholders.
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“Landor announced that it has provided brand strategy and design services to McGraw Hill Financial for the company’s bold new brand identity as S&P Global. Landor partnered with the company to create a new name and design system that confidently marks S&P Global as the leader in delivering essential intelligence to companies, governments, and individuals.” The press release of May 3, 2016 introduced the text about the rebranding. What about the acceptance of the new brand name five years later?
Despite owning Standard & Poor’s, the S&P 500, the Dow Jones Index, and Platts – some of the most iconic benchmarks and market intelligence brands in the world – McGraw Hill Financial (MHFI) was commonly perceived as a textbook publisher. With a clearly established business strategy, Landor helped MHFI “define its true value and claim its unique position in the market. As S&P Global, the brand tells a new story and opens an auspicious chapter in its impressive history.”
Founded by Walter Landor in 1941 and today a global leader in brand consulting and design, Landor helps clients create agile brands that thrive in today’s dynamic, disruptive marketplace. Their work shall enable top brands—from Barclays to BMW and Tide to Taj – “to stand for something while never standing still”.
Benchmarks and essential intelligence form the backbone of the financial ecosystem, with credit ratings and indices constantly referenced to bring context and clarity to investment decisions. Landor focused the new brand on the pivotal role S&P Global plays as the common denominator in the world of finance, providing this essential intelligence to investors.
There was a sophisticated argument behind the renaming of the group of companies. In practice, however, the new company name is still a long way from establishing itself. For the credit rating agency in particular, S&P is still struggling globally to enforce the new name, even though it is actually to be used in a legally binding manner. The rating agency is regulated in many jurisdictions around the globe.
Ratings and rating agencies are quoted by many issuers and named on their websites. Here are some examples of how the agency’s new name is still ignored after half a decade (access to all of the websites below from September 3, 2021):
The selection of these issuers was purely random, regarding the question of how S&P Global Ratings is presented. In the sample, none of the issuers gave correct information about the agencies by which they were assessed. All of them used the old name and not the new brand identity developed by Landor.
Revenue Grid, a Mountainview, California-based revenue platform, raised $20 million in Series A funding. “800,000 sales pros use Revenue Grid to win faster and with more confidence”, says the website. The company is proud to have Moody’s as a customer.
W3 Capital led the round and was joined by investors including ICU Ventures.W3 Capital is a family owned Private Equity investor seeking partnerships with other founder and family owned companies, facilitating ownership transition and enabling management teams to lead their businesses into the future. W3Capital seeks control investments.
Revenue Signals are contextual, actionable notifications that tell a whole sales org what is going well or poorly throughout the whole sales process. These alerts and notifications are called “Signals”, because they are designed to signal the sales team about the next best step they should take now, or about anything that doesn’t go according to plan in the pipeline, process, or performance. They are the driving force behind guided selling because they give sales teams an instrument to remove guesswork, control each point in the sales process, and set a unified sales approach.
Pipeline visibility provides understanding into the actual state of the sales pipeline at any particular moment. For sales leadership, it means being able to track key deals, numbers, and thresholds in real time, and understanding why the situation is the way it is and where to move to get to the numbers a company needs.
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Donations are resources. Who donates invests. Therefore, every donor is interested in how likely it is that the goals of the donation will be achieved. Assessing and classifying this probability of reaching the aims of a donation is the subject of a charity rating.
What do donors want to donate? Donor priorities change with circumstances and people’s perceptions. If flood disasters occur or earthquakes shake the cities, donors focus on those affected. Charity organizations also use the pictures of refugees to collect donations. What were the motives for people in the USA to donate in 2020? An indication of the goals pursued with donations results from the search queries on the search engines. This is how Google Trends lists the most frequent search queries.
Protection against infection by the corona pandemic reached the top ten most popular donation motives in the USA. Americans were particularly often looking for ways to donate protective masks.
The list shows what US donors searched for on Google
N95 respirators and surgical masks are examples of personal protective equipment that are used to protect the wearer from airborne particles and from liquid contaminating the face. The US Centers for Disease Control and Prevention (CDC) does not recommend that the general public wear N95 respirators to protect themselves from respiratory diseases, including coronavirus (COVID-19). Those are critical supplies that must continue to be reserved for health care workers and other medical first responders, as recommended by current CDC guidance. The persistent shortage of masks in the US is limiting the ability of many Americans to protect themselves adequately.
The situation is different in Germany, where companies have set up factories since the outbreak of the pandemic and then started producing face masks. However, many people in Germany cannot afford high-quality masks for everyday use because the masks should be changed every day. The expenditures for low-income sections of the population, especially for retirees with low retirement benefits, add up to considerable sums.
Therefore, more and more donors are looking for ways to donate high quality masks. There is a European standard. The EN 149 standard defines performance requirements for three classes of particle-filtering half masks: FFP1, FFP2 and FFP3. FFP1 defines the least filtering mask of the three, since aerosol filtration percentage is only 80% minimum, the internal leak rate has a maximum 22%. Such a mask is mainly used as a dust mask (for example for DIY jobs). Dust can cause lung diseases, such as silicosis, anthracosis, siderosis and asbestosis (in particular dust from silica, coal, iron ore, zinc, aluminium or even cement).
Much better protection is guaranteed by FFP2 masks, which is similar to the N95 mask in the USA. FFP2 masks have an aerosol filtration percentage of not less than 94% and an internal leak rate with a maximum of 8%. This mask offers protection in various areas such as the glass industry, foundry, construction, pharmaceutical industry and agriculture. It effectively stops powdered chemicals. This mask can also serve as protection against respiratory viruses such as avian influenza, COVID-19 or severe acute respiratory syndrome associated with the coronavirus (SARS), as well as against the bacteria of pneumonic plague and tuberculosis.
Donors who value the effect of their donations therefore concentrate on the most effective masks, such as those offered in the STOLFIG.SHOP.
For companies in which employees cannot always keep a safe distance from another, the infection of individual employees and the consequential officially ordered quarantine measures can result in major economic losses.
Companies can effectively counteract this by using FFP2 masks, because FFP2 masks, in contrast to normal mouth and nose protection, also protect the wearer of the mask effectively. A filter performance of more than 94% is required here.
For companies, investing in high-quality masks has the effect of an insurance premium for all employees, with which financial relief can be achieved in the event of danger. The use of masks that employees like to wear limits operational risks and therefore tends to have a positive effect on the company rating.
EPG PausaGmbH from Eichelhardt aims to meet this requirement with its range of FFP2 masks. “Our special offer for our customers is the possibility to have their masks manufactured with their logo, an exclusive embossing. The logo can be used on an area of max. 30 x 20 mm where it can be embossed,” says Wei Hong, managing director of the German company.
However, color representations of the logo are not possible. But embossing the masks is even more worthwhile when larger quantities are required. “This special service costs € 300 plus VAT for a purchase of up to 3,000 masks. This service is free of charge when you purchase larger quantities. We can already offer the masks in white, black, red and blue. “
“We are assuming,” said the managing director, “that we will complete the certification process in December 2020 and then be able to offer certified FFP2 masks. But even now you can purchase our masks in the same quality. However, we must expressly point out that these masks are then neither medical products nor personal protective equipment. Our delivery time for your personalized masks is currently 10 working days after receipt of the order and the template for the logo with a max. production volume of 10,000 personalized masks per day. “
“In addition to the masks we produce, we can currently also offer fully certified FFP2 masks – although not from our own production,” reports the managing director.