The PRV Report Card: This Week’s Winners and Losers

May 24, 2013 by Leave a Comment

Screen Shot 2013 05 23 at 5.15.34 PM 150x150 The PRV Report Card: This Week’s Winners and LosersPR Winner: “A” (PR Perfect) to Tim Cook, CEO of Apple, who was asked to testify on Capital Hill following a recent report that excoriated Apple as a tax dodger, parking profits offshore and not owning up to its domestic tax obligations. Tim Cook was just humble and conciliatory enough while pressing the larger point that the present tax code needs urgent reform to wipe out gaping loopholes. This was bait and switch at its best. Before anyone could reboot his or her iPad he had the Senate’s Permanent Committee on Investigation eating out of his hand. “I love Apple,” exclaimed one enthusiastic member as the hearing wore on. Tim Cook and Apple’s senior management presumably slept soundly that night.

Screen Shot 2013 05 22 at 8.03.19 AM The PRV Report Card: This Week’s Winners and LosersPR Loser: “F” (Full Fiasco) to Lois Lerner who pleaded the Fifth Amendment against self-incrimination at the recent hearing on the ongoing IRS fracas. Leading the IRS’s division on tax- exempt organizations she arrived for what was always going to be a hostile and partisan hearing.  Lerner began by protesting her innocence saying she had “done nothing wrong,”  (fair enough) but then after delivering what seemed like an opening statement pleaded the Fifth Amendment and refrained from further comment. Is it really okay for a paid government employee to refuse to answer questions from Congress? It’s muddy water certainly, but making your case and then pleading the Fifth sounds rather like having your cake and eating it. Bon Apetit.


Screen Shot 2013 05 23 at 5.20.36 PM 150x150 The PRV Report Card: This Week’s Winners and LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD TO: Kim Kardashian and the ongoing coverage of her problematic relationship with singer Kanye West. This week In Touch featured heavily pregnant Kim on its cover claiming she is humiliated by rumors that her baby’s father has a secret boyfriend in Paris (with supporting photograph). Is Kanye West gay asked the article? This is apparently Kim’s “greatest fear.”  In Touch had a picture of the rumored French boyfriend while OK Magazine went 180 degrees and broke news in the opposite direction. Describing itself as the only magazine “with the real story,” it insisted in breathless detail that Kim and Kanye are “happier then ever” and plan to elope to Paris. No doubt about it, claims OK Magazine. At this point either Kim or Kanye’s PR should set the record straight.

 

Filed Under: Branding, Celebrity, Companies & Markets, Crisis Communictions, Featured News Stories, Legal, Politics/Government, PR Takeaway, Society/ trends

Will Yahoo Un-Coolify Tumblr?

May 22, 2013 by Leave a Comment

Screen Shot 2013 05 21 at 4.09.09 PM Will Yahoo Un Coolify Tumblr?“We promise not to screw it up,” Yahoo CEO Marissa Mayer wrote, tongue-in-cheek, on the Tumblr blog she launched Monday, the day Yahoo announced its $1.1 billion acquisition of the popular micro-blogging site that is all the rage with the cool kids. If only Tumblr’s users could trust that. Judging from their online comments, many of them view Yahoo’s purchase of the anything goes blogging platform as a nervous teenager might watch Dad try out her skateboard. (“Be careful – and don’t break it.”)

Tumblr is Mayer’s seventh acquisition since she took the helm last year of once-dominant Yahoo, which is struggling to find relevance and its footing against rivals like Google and Facebook. The acquisition makes sense for Yahoo, analysts agreed, as it seeks to find cache with the vital, but famously fickle 18-to-24-year-old market segment. Tumblr, home to 109 million blogs and 51 billion posts, made just $13 million last year. Yahoo is looking to integrate and monetize it gently and slowly  and will let founder David Karp continue to run it more-or-less independently. (He also told users not to worry.

Only time will tell if buying Tumblr will make Yahoo “cool” or work in reverse, driving away the exact group of habit-forming users Yahoo hopes to capture. Mayer’s “screw it up” comment is an awkward and nervous acknowledgement of that possibility, but it is also a mea culpa reference to Yahoo’s record of game-changing acquisitions that tanked. Better that she call it out herself.

The PR Verdict: “C” (Distinctly OK) for Yahoo and its CEO, for making a stiff new pair of cool shoes seem to fit.

The PR Takeaway: What principals say at M&A time has to resonate with a lot of audiences – investors, competitors, existing and new customers. Managing change means setting expectations and allaying fears. On the latter point, humor, even if hokey, can help – in Yahoo’s case, a shot of the self-deprecating sarcasm especially favored by the younger crowd. Pitch-perfect messaging is essential: While you walk the walk, you still must talk the talk. But always make sure to give your sound bites the smell test.

Filed Under: Branding, Companies & Markets, Society/ trends, Tech Sector

Three Steps FWD, Two Steps Back?

May 15, 2013 by Leave a Comment

Screen Shot 2013 05 13 at 7.37.31 PM 150x60 Three Steps FWD, Two Steps Back?Political advocacy group FWD.us was launched last month by Facebook’s Mark Zuckerberg and so far it has run up an impressively depressing string of PR gaffes. As a tax-exempt “social welfare organization” (a la Citizens United), it can raise and spend money to promote political and legislative aims virtually unchecked. But the group’s missteps have made it the story instead of its cause and FWD.us now runs the risk of having little influence or gravitas.

Its initial focus was clear: comprehensive immigration reform. As a cause this made perfect sense. It is near and dear to talent-hungry tech firms and backed by deep-pocketed Silicon Valley luminaries including Eric Schmidt, Marissa Mayer and Bill Gates. The launch augured an auspicious foray into muscle-flexing issues advocacy in Washington.

But things went pear-shaped from the start. An embarrassing leak spoiled its launch, disclosing a seemingly unseemly strategy to promote its agenda via “avenues of distribution” dominated by member companies like Facebook and Yahoo. The leak forced president Joe Green (Zuck’s roommate at Harvard) to apologize. Then, it alienated supporters with a confusing advertising campaign that veered way off-topic, advocating for controversial projects like the Keystone XL pipeline and against Obamacare. FWD.us said the ads sought to create “political cover” for supporters of immigration reform in Congress, but its move prompted progressive organizations to pull ads from Facebook in protest, and two key Silicon Valley entrepreneurs to later withdraw from the group.

The PR Verdict: “F” (Full fiasco) to date for Zuckerberg’s FWD.us, for bungling what should have been a sure-footed start. 

The PR Takeaway: Opening baby steps need to be unambiguous and unassailable. Opening gaffes can sink a new venture, and one misstep can lead to and/or magnify others. Move cautiously and deliberately. Leaks happen, so be mindful of how even internal communications might play in public. If something leaks, get back on message fast – with actions, not words, that spell out your group’s mission and galvanize supporters. This isn’t that hard. If Zuckerberg’s other business had stumbled as much at the outset, he might still be at Harvard studying for finals.

Filed Under: Companies & Markets, Marketing and PR, Politics/Government, Silicon Valley, Tech Sector Tagged With: , , , , , , , , , ,

How to Take On A Media Giant

May 14, 2013 by Leave a Comment

How to Take On A Media Giant A golden rule of corporate PR? Threatening to sue a newspaper or media outlet is a waste of time. Even trying to intimidate through an endless volley of legal letters usually backfires. Unless you can call out a media outlet on its polices and procedures, complaining about perceived unfairness usually falls on deaf and everlastingly hostile ears. Which is why Bloomberg’s recent misstep with Goldman Sachs makes interesting reading.

Bloomberg, a robust news organization, prides itself on high standards and journalist integrity, but is now wiping egg from its face following the admission and subsequent apology that its journalists had access to certain client information from its terminals ubiquitous on every trading floor. This included user’s login information and other general details including help desk inquiries. Bloomberg issued a quick apology and swiftly announced changes in procedure. It has since stressed that at no time did reporters have access to trading and monitoring systems or to clients’ messages to one another (the stuff that really matters).

When Goldman Sachs, routinely held accountable in the public eye, discovered that its employees were being monitored by Bloomberg journalists with access to private data, a formal complaint was made. This must have the been the gotcha moment. No news organization likes to be accused of an ethical breach and this was one case where Goldman could flex its own muscle and claim the moral high ground.

The PR Verdict:  “A” for Goldman Sachs for scoring a public and ethical win.

The PR Takeaway:  Integrity is the Achilles’ heel. No doubt Goldman Sachs has previously had its fair share of battles with Bloomberg but complaining to news organizations about bias and unfairness rarely works. This time it was different. A bruised eye for a leading news organization and a PR point for Goldman Sachs for starting a news cycle debate about journalist integrity.  When there is a breach of procedure any PR is on firm ground to go ahead and complain. Choose your battles wisely.

 

Filed Under: Companies & Markets, Finance, Legal, Media Tagged With: , , , , , ,

The Mean Girls of Retail: Abercrombie & Fitch

May 13, 2013 by Leave a Comment

blog 2 photo 150x150 The Mean Girls of Retail: Abercrombie & FitchGotta love Mike Jeffries, the surgically altered (in a big way) CEO of teenage clothing retailer Abercrombie & Fitch. He has grabbed the headlines yet again for his “mean girl” management philosophy. He doesn’t like uncool people and he dislikes ugly people. As for people who are fat? They have no place in the world of Abercrombie.

The Internet went wild last week as the media reported on a new book called The New Rules of Retail co-written by Robin Lewis. Lewis told the media that Mike Jeffries, “…doesn’t want larger people shopping in his store, he wants thin and beautiful people.” The basis of the comments come from an interview Jeffries did with Salon.com in 2006. Jeffries explained his mean girl philosophy then as follows: “In every school there are the cool and popular kids, and then there are the not-so-cool kids. Candidly, we go after the cool kids.” He went on to say, “A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely.”

Refusing to make any concessions, the retailer stops at a size ten for women. As the outrage over his recently unearthed comments continued, Jeffries and A&F were unavailable for comment. Jeffries is simply going to sit this controversy out.

The PR Verdict: “D” (PR Problematic) for Abercrombie & Fitch. Could this become one of the most disliked brands in America?

The PR Takeaway: Be careful of whom you offend. Given that the comments date back some seven years there was an opportunity for Jeffries to revise his views, but he is not giving in. Fine to stick to his guns but with nearly 40 percent of American women considered overweight, and many controlling the purse strings of their teenagers, A&F may come to regret its no comment policy. One of the lessons from high school is that the world is a fickle place. It doesn’t take much to switch from being the popular kid at school to suddenly being the unpopular one.

Filed Under: Branding, Companies & Markets, Marketing and PR Tagged With: , , , ,

Is Apple’s PR Bruised?

April 25, 2013 by Leave a Comment

Is Apples PR Bruised?What to think of Apple? To hear stock analysts and business anchors talk, one would think Goliath had just taken a severe hit to the head. Apple has been the undisputed giant of tech for so long that the slightest waver on its feet has everyone talking about how the mighty may soon be falling.

True, profits are down – about 18 percent this quarter, and the first decline for Apple in a decade. Speculation that the company might slope downward following the demise of leader Steve Jobs didn’t come to pass immediately, but the birth of competitive, and cheaper, products are starting to pose a threat. And there are no new products coming from Apple, which is bad news for a company that caters to consumers mad for the latest in tech devices.

Another first for Apple is having to borrow money. The explanation? Rather than face taxes on bringing in offshore assets, Apple will take a loan to pay $100 billion to shareholders by 2015, which pleases some, but perplexes others. Bottom line: should Apple be in crisis mode or business as usual?

THE PR VERDICT: “C” (Distinctly OK) for Apple. The news isn’t good, but then again it isn’t all rotten.

THE PR TAKEAWAY: A company’s reputation can precede, and quiet, speculation. Apple may be wavering in its long-held number one slot, but one of the company’s priorities has been building a brand. People don’t speak of phones; they talk about iPhones and lead iLives. Consumers still see Apple products as cool and a cut above the rest despite their ubiquity.  While cheaper products may come around, it will take far more than that to put a dent in Apple’s brand loyalty. Apple’s PR should continue to polish its image and brand and let the stock price see-saw of its own accord. Apple’s upward unrelating share price climb had to come to an end at some point. Best thing is to pause and catch a PR breath.

Filed Under: Advertising and PR, Branding, Companies & Markets, Marketing and PR, Media Tagged With: , , , , , , , , , , , , ,

J.C. Penney: Everything Old is New Again

April 10, 2013 by 1 Comment
J.C. Penney: Everything Old is New Again

THE PR VERDICT: “F” (Full Fiasco) for the board of J.C. Penney.
(Pictured: ousted CEO Ron Johnson.)

Shareholders may be asking the board of J.C. Penney “Penny for your thoughts?” Or perhaps demanding it, after the startling news of a CEO switcheroo this past Monday. That CEO Ron Johnson was ousted is not a surprise. The real surprise came when the board announced Johnson’s replacement: his predecessor, Myron Ullman, who was fired by that same board in 2011.

When Johnson arrived he moved forward with a radical makeover for Penney: boutique stores under one roof. This idea included securing Martha Stewart, who assured Johnson she could step out of her exclusive contract with Macy’s. That plan blew up like a bad soufflé, with Johnson in court admitting he’d never read the fine print of Stewart’s contract with Macy’s, and thousands of Martha’s products being court-barred from shelves.

Now comes news that Johnson is being replaced by the very predecessor he took over from, ostensibly because the man wasn’t doing a bang-up job to begin with. JCP’s price tumbled 10.3 percent after a brief spike when Johnson’s termination was announced. Shareholders aren’t just calling for a replacement for him, but for the entire board. This is practically a textbook example of PR “dont’s.”

THE PR VERDICT: “F” (Full Fiasco) for the board of J.C. Penney.

THE PR TAKEAWAY: When playing poker, keep your hand facing in – no need to show all cards to the other players. A new CEO, a drastic new plan; where were the checkpoints along the way? With only one of the ten J.C. Penney board members having retail experience, no wonder the organization is in trouble. The board clearly realized that it needed to oust Johnson to stem the falling revenues and bad publicity, but the answer is rarely to go back in time. As Plan B is nothing more than a return to former issues, then it may be worth delaying until a more palatable alternative is found. If the board insists on reuniting with a former CEO, then coach the ill-chosen replacement not to admit that he was re-hired only last weekend and has no plan to speak of. Showing the losing hand is always a losing tactic and in this case, likely to cost JCP a pretty penny.

Filed Under: Advertising and PR, Branding, Companies & Markets, Marketing and PR Tagged With: , , , , , , , , , , , , , ,

JP Morgan: It May Take Two

April 8, 2013 by 1 Comment
JP Morgan: It May Take Two

THE PR VERDICT: “D” (PR Problematic) for JP Morgan. (Pictured: JP Morgan CEO Jamie Dimon.)

Megabank JP Morgan hit the headlines over the weekend with news that it was mobilizing its senior management to defeat a shareholder vote on corporate governance. In advance of a vote at next month’s annual meeting, board members are planning to sit down with some of the bank’s biggest shareholders, encouraging them to block a motion to separate the role of CEO and Chairman.

Momentum for the proposal has gathered steam following the losses from the London Whale trading episode and JPM’s nearly $6 billion in losses. Fairly or unfairly, questions about the CEO have been raised, and whether or not it is possible to manage a firm of JP Morgan’s size. Following some recent ugly congressional hearings, the new catch cry is not only too big to fail abut also too big to manage. This recent suggestion, to split the current Chairman/CEO role into two is an attempt, so say its proponents, to get another set of eyes overseeing day-to-day management.

The Board of JP Morgan isn’t in favor of the change, while press reports have CEO Jamie Dimon being alternatively sanguine about the proposal or threatening to leave, if the motion is approved. To avoid ongoing external scrutiny and to appease fierce critics in Washington and elsewhere, this may be one battle not worth fighting.

THE PR VERDICT: “D” (PR Problematic) for JP Morgan and its decision to oppose suggested governance reforms.

THE PR TAKEAWAY: Give an inch to keep a mile. It’s not really clear what JP Morgan’s objections are to splitting the role of CEO and Chairman. It is, after all, a structure that is already in place in many companies around the world, and splitting the roles is generally perceived as a desirable safeguard. For a firm that has been dragged through acres of tough media coverage about its internal management controls, this might have been one relatively painless and not unreasonable concession to make. Another financial loss or management failure around the corner, and JP Morgan may rue the day it so vociferously opposed such a modest reform.

Filed Under: Companies & Markets, Finance, Lowest Graded, Regulatory Matters Tagged With: , , , , , , , ,

A Sweeter Apple?

April 4, 2013 by Leave a Comment
A Sweeter Apple?

THE PR VERDICT: “C” (Distinctly OK) for Apple’s apology to Chinese customers.

What a difference a CEO makes. The change in Apple Inc.’s executive suite was evident this week when the company posted a fulsome apology from CEO Tim Cook on the Apple China web site. Apple, it seems, was not properly responding to complaints about its warranty and repair programs, prompting the Chinese government and state-run media to launch a fortnight of blistering criticism. In Cook’s mea culpa, which ran 12,000 Chinese characters (about 800 words), he apologized for appearing arrogant and outlined several changes the company will be making in China.

This is the second time in recent months that Cook has taken the higher road. Last September, he acknowledged the failure of Apple Maps, a cartographic catastrophe so inaccurate it stranded several iPhone users in an Australian desert wasteland with no food or water for more than 24 hours.

The softer approach is a departure from that of Apple co-founder and longtime leader Steve Jobs, who was called egotistical as often as brilliant. When customers complained in 2010 that holding the iPhone at a certain angle obliterated reception, Jobs snapped “Just avoid holding it that way” before eventually, begrudgingly, apologizing and giving away free cases.

Apple’s most recent apology seems to be smart. China is Apple’s second biggest market today and, as Cook told state-run Xinhua news agency in January, he believes it will become its first. All the more reason to keep customers extremely happy.

THE PR VERDICT:  “C” (Distinctly OK) for Apple. While the apology was the right move, it came two weeks into a negative PR blitz. It will be interesting to see if Apple sales in China have been affected.

THE PR TAKEAWAY: Markets change, and so must marketing strategies. Part of Apple’s early allure was that its groundbreaking technologies and higher pricetags created an air of exclusivity; the attitude that occasionally exuded from leadership contributed to the appeal. Today, however, the competitive landscape is much more crowded, and Apple can’t afford to alienate buyers in such fertile ground as China. An apology today helps pave the way for a bigger footprint tomorrow.

Filed Under: Advertising and PR, Branding, Companies & Markets, International News, Marketing and PR, Media Tagged With: , , , , , , , , , , ,

SAC May Be Too Calm As It Carries On

April 2, 2013 by Leave a Comment
SAC May Be Too Calm As It Carries On

THE PR VERDICT: “C” (Distinctly OK) for SAC capital and its business as usual PR tactic.

Keep calm and carry on. In the world of crisis PR, that British wartime slogan is the standard mantra, but Steve Cohen, founder of beleaguered hedge fund SAC Capital, seems to be taking it to heart. The hedge fund, center of a long-running investigation into insider-trading, was in the headlines again last week when one of Cohen’s key lieutenants was arrested. The news capped a week of astonishing headlines.

As arrests mount and a $600 million penalty to settle some civil claims is in the works, founder Cohen’s PR response has been to carry on as normal. But what is normal for one of the world’s largest and most successful hedge funds? A spending spree to change the mood.

Three items made the news: the purchases of a Picasso painting for a cool $155 million, and of oceanfront property in East Hampton for $60 Million. Then throw in the sale of a Manhattan condo for $115 million and it’s clear that at SAC, the recent headlines are not putting the firm into crisis. They’re distracting, yes, but apparently, the show must go on.

THE PR VERDICT: “C” (Distinctly OK) for SAC capital and its business-as-usual PR tactic.

THE PR TAKEAWAY: Chutzpah has its merits – until it strays into willful arrogance. There is some wisdom in brazenly continuing with a business-as-usual approach while others might describe the sky as falling. Keeping calm and carrying on reassures investors, clients, and above all employees that this too will pass. In this case, however, SAC’s actions seem akin to thumbing their proverbial nose at authority. In a fight over potentially criminal allegations, SAC has less leverage than it thinks. This might be the moment to lay a little lower and not inflame prosecutors wanting their day in the sun.

Filed Under: Companies & Markets, Finance, Legal, Regulatory Matters Tagged With: , , , , , , , , ,
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