Wall Street Takes Another Hit With “Flash Boys”

 Wall Street Takes Another Hit With Flash Boys

THE PR VERDICT: “A” (PR Perfect) for Flash Boys author Michael Lewis.

Hell may freeze over before Wall Street’s PR image improves. From the scandalous decisions that began the financial collapse to legal damages that seem, to the general public, hardly punitive and Martin Scorsese’s excess-laden Wolf of Wall Street, could the image of the financial sector get any worse? Yes, and a lot, thanks to the PR blitz for Michael Lewis’s latest book Flash Boys: A Wall Street Revolt.

Lewis is the author of several bestsellers, including Liar’s Poker and Moneyball: The Art of Winning an Unfair Game. Flash Boys has been boiled down to a single crystal-clear, seismically charged sound byte: The United States stock market is rigged. Thus began segments on 60 Minutes, The Today Show, and a host of other TV shows, newspaper and magazine articles – enough media exposure to sink the stock market all over again.

Naturally, there’s been blowback from Wall Street, though anyone in the stock market is so mistrusted by the public that protests only lend credence to Lewis’s claims. Others in the stock sector have said Lewis is right and are becoming whistleblowers. While Wall Street’s image continues to plummet, Michael Lewis’s stock is on a high.

THE PR VERDICT: “A” (PR Perfect) for author Michael Lewis (and an “F,” Full Fiasco, for Wall Street).

THE PR TAKEAWAY: Harmonic convergences can be planned. A hot topic, a ripe scapegoat, an author with a talent for explaining complex issues simply… Yes, these are all dream situations, but flaks can work their own version of stock market magic. Timing the book’s publication after the release of The Wolf of Wall Street may have been coincidental, but was more likely a skilled PR team working Wolf like a peloton. Lewis’s elevator pitch, as well as his Everyman-friendly explanations, sell themselves – after being honed. A perfect campaign; perhaps Wall Street should hire Lewis’s team.

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

hijabs The PRV Report Card: This Weeks Winners & LosersPR WINNER OF THE WEEK: “A” (PR PERFECT) to the Overland High School girls soccer team in Aurora, CO, for a stirring show of solidarity. Last week, referees barred one Muslim player on the team, Samah Aidah, from playing with a hijab on her head, calling it “dangerous.” Never mind that FIFA, soccer’s international governing body, officially permits the practice – not to mention the US Constitution. For the next game, all of Samah’s teammates and coaches wore the traditional Islamic headscarf in support. A tweet by one of the girls with a picture of team, all in headscarves, sent the matter viral. Young people leading by example, again.

 The PRV Report Card: This Weeks Winners & LosersPR LOSER OF THE WEEK: “F” (FULL FIASCO) TO Lady Gaga, who continues to have a bad hair year. She fired her longtime manager, and her latest album, ARTPOP, hasn’t sold nearly as well as her previous collection, Born This Way. Now, her Born This Way Foundation, which seeks to “foster a more accepting society,” is under fire. Tax reports for 2012 show that BTWF spent $1.85 million in legal fees, salaries, travel, philanthropic consulting, and $808,661 in “other” expenses. Actual donations? A mere $5000. An example of how celebrity foundations aren’t born bad, they’re made that way.

 The PRV Report Card: This Weeks Winners & LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD TO newly annointed Federal Reserve Chief Janet Yellen, who tried (and failed) to avoid rattling financial markets by couching her comments at her first press conference. Oh Janet, have you not studied your predecessors’ previous faux pas? After saying “We will try as hard as we can not to be a source of instability here (regarding communications)”, Yellen promptly gave what investors interpreted as a potential timeframe for interest rate increases, and one earlier than they had expected. Was that the message Yellen meant to convey? Who knows — and it doesn’t matter. Stock markets fell, bond yields rose, and the world carries on. PR tip to the head of the Fed:  When it comes to interest rates, “no comment” is the best comment.

Newsweek Gets Press, and Controversy, With Bitcoin Story

 Newsweek Gets Press, and Controversy, With Bitcoin Story

The PR Verdict: “C” (Distinctly OK) for Newsweek.

Venerable news journal Newsweek returned to the stands on Friday after a 14-month absence. Clearly a big cover story was needed, and they had one: the identity of the founder of Bitcoin, the digital currency with mysterious origins. Apparently, there’s still some mystery – and a lot of controversy over the article.

Newsweek reporter Leah McGrath Goodman said she had proof that Dorian Satoshi Nakamoto was the founder of Bitcoin. Nakamoto, described by the New York Times as “a reclusive train collector,” then gave a two-hour interview to AP denying Newsweek‘s claims. At the heart of the debate is a brief conversation that took place outside Nakamoto’s home; Goodman’s interpretation of his response to questions about Bitcoin was that he was the founder. Nakamoto says he misunderstood her questions.

The magazine issued a statement saying they stand by the story, with well-worded acknowledgement of the online attacks toward Goodman, her reporting, even her character. Others in the media are calling into question Goodman’s proof and journalistic ethics. Given that Bitcoin has recently given investors a tumultuous ride, some speculate the Newsweek article has put Nakamoto in danger, without strong enough proof of association.

THE PR VERDICT: “C” (Distinctly OK) for Newsweek.

THE PR TAKEAWAY: With great risk, there are two outcomes: great rewards, or spectacularly bad problems. Clearly, Newsweek needed a big story after over a year off the stands and many questioning the future of print media. (A few might also scratch their heads as to why the online version gives free access to the entire feature; isn’t the point of magazines to sell magazines, not give the content away?) This explosive story gave Newsweek the media splash they needed, and the negative attention they never wanted. Well, they got people talking. Should their sources be proven wrong, they may wish they’d gone with something slightly quieter.

Apple, Major Corporations Take Stand Against AZ Bill

 Apple, Major Corporations Take Stand Against AZ Bill

THE PR VERDICT: “A” (PR Perfect) to Apple, American Airlines, Marriott, and the NFL.

Taking sides on religious issues was previously considered a bad idea for corporations. Better to remain neutral, lest someone – meaning, potential customers with buying dollars – be offended. Those days are over as of this week, when Apple, American Airlines, the Marriott hotel corporation, and the National Football League sent a message to Arizona Gov. Jan Brewer: Veto Senate Bill 1062 or suffer economic consequences.

The now-infamous bill legalizes the right of business owners to refuse service to gays and lesbians on religious grounds. Gov. Brewer, a conservative, has said she is “undecided” on whether to sign the bill into law.

Her decision may be assisted by threat of corporate boycott. Phoenix, AZ, is host to next year’s SuperBowl, and major corporations are making their non-neutral stance clear. Brewer may want to listen to Apple in particular: the tech giant planned to bring sapphire production to the state, which would have major economic impact – as would its loss. While no official statement came from Apple, Doug Parker, CEO of American Airlines, summed up the new corporate stance when he wrote to Brewer, “Our economy thrives best when the doors of commerce are open to all.”

THE PR VERDICT: “A” (PR Perfect) to Apple, American Airlines, Marriott, the NFL, and corporations that take a stand against discrimination.

THE PR TAKEAWAY: It’s not always about the bottom line, even when it’s about the bottom line. Discrimination is wrong, period; about that, no one can argue. Even three of the senators who voted for SB 1062 are now urging Gov. Brewer to veto it. Companies never want to alienate customers, but at certain points, the only thing to do is take a strong stance. Sure, the lynchpin here is money. But in past times companies might have been content to say they were “gathering information,” or say nothing at all. Some may still be doing that, but the ones that speak up are the ones that stand out.

Venture Capitalist Enters PR Forbidden Zone

tom perkins 2.png Venture Capitalist Enters PR Forbidden Zone

THE PR VERDICT: “F” (Full Fiasco) for Tom Perkins.

Tom Perkins is on a roll – straight downhill. The venture capital icon who founded Kleiner Perkins Caufield & Byers has cemented his reputation among the Obscenely Wealthy Behaving Badly for comments he made last week likening rich techies and other members of the vilified “1 percent” class to victims of the Holocaust.

Perkins, in a weekend letter published in the Wall Street Journal, compared recent protests by affordable housing advocates in San Francisco against Google buses to Nazi targeting of Jews. “I perceive a rising tide of hatred of the successful one percent,” he wrote. Forget the unspoken rule of debate that whoever first invokes Nazis in an argument loses automatically. Perkins later apologized – sort of – for his gaffe, but really, one should expect nothing less from him. He has always been over the top, shockingly, even willfully flouting the concept of noblesse oblige at every turn. Hard to believe that the man Perkins partnered with to start his VC firm in 1972 had himself fled the Nazis.

Perkins cited that relationship in a next-day TV interview, in which he sported a $380,000 watch and lamented how his eponymous firm chose to “throw me under the bus” for his comments. All that privilege and still a victim.

THE PR VERDICT: “F” (Full Fiasco) for Perkins, who is far too rich, and perhaps a bit too daft, to choose his words more carefully.

THE PR TAKEAWAY: To end a losing conversation, stop talking. Of course, this is not Tom Perkins’s way. In his post-comment comments, he sought to explain his choice of words and clarify his point, to little avail. A direct, unqualified apology would have been better, but big egos are rigid and only become more sclerotic with time, incapable of adapting and absorbing new lessons. One of those lessons: Before committing words to paper, and thence to print, have someone else run a soundcheck.

Royals Admit They’re Down to Last Million

 Royals Admit Theyre Down to Last Million

THE PR VERDICT: “C” (Distinctly OK) for the Royal Family.

Public relations for Britain’s Royal Family seems to take one step forward and two giant steps back. For every bit of good news, such as Prince William’s marriage to Kate, there are the photos of topless Kate and bottomless Prince Harry. After England enjoyed the christening of Prince George comes the setback: the Royals are almost broke.

The obvious jokes about all things being relative and selling some of the crown jewels fall flat when the numbers are run. The Household is down to its last £1 million ($1.6 million). This account is meant for travel, staff salaries, and maintenance of the family’s residences, including Buckingham Palace. Replacement of the heating system in the palace alone could cost nearly all the Household has. There’s removal of asbestos, a new roof for Windsor Palace… What happened? The answer is rather commonplace: overspending.

And here the Royal family finds itself at a rather interesting PR juncture. As Royals, they were never meant to be considered “of the people.” However, Princess Diana began a tide of relatability carried on by her sons. Could this low bank account – relative to royals – be a chance to get closer to the people, who are much in the same boat?

THE PR VERDICT: “C” (Distinctly OK) for the Royal Family. The low bank account is embarrassing but puts them in a position of telling their subjects, “We’re just like you.”

THE PR TAKEAWAY: Look for the silver lining. Much of the world is still being affected by the global recession; no one is living high on the proverbial hog. The new Pope is the champion of humble living, making it seem a virtue to live on less. The Royals could use this opportunity to win the hearts of Britain with fiscal solidarity. They might even get a lower estimate on that asbestos removal.

BOfA and Bono Team Up for Charity

 BOfA and Bono Team Up for Charity

THE PR VERDICT: “A” (PR Perfect) for BofA’s brand-building philanthropy.

When was the last time an activist rock star gave a standing ovation to a “too-big-to-fail” bank? That’s just what happened last week when U2 front man Bono extolled the generosity of Bank of America and joined CEO Brian Moynihan at the World Economic Forum in Davos.

Moynihan and U2 frontman Bono announced a $10 million BofA commitment to RED, the AIDS charity co-founded by Bono. In a clever promotional twist, the bank will tie its donation to U2′s newest album release during the upcoming Superbowl. BofA agreed to pay for every download of the album’s song “Invisible” for 24 hours, an investment they will back with expensive Superbowl advertising.

Rarely have Moynihan and his bank basked in such a warm reception. Under the bright Davos sunshine, CNBC and The Financial Times (among other news media) took turns interviewing the Boston-based banker and his rock activist partner. The visual contrast was nearly as noteworthy as Bono complimenting the bank for its “game-changing influence.”

THE PR VERDICT: “A” (PR Perfect) for BofA’s brand-building philanthropy.

THE PR TAKEAWAY: Regain trust by carefully picking your allies. Despite continuing efforts to engage in a public dialogue and foster good will, progress has been incremental over the past five years. In Davos last week, BofA wisely avoided interviews about its business. Instead, it joined a unique global health initiative and happily played back up to a true superstar. Well done, BoFA.

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

 The PRV Report Card: This Weeks Winners & LosersPR WINNER OF THE WEEK: “A” (PR PERFECT) to H&M, the sole clothing retailer set to advertise during the Superbowl. They’re going against heavyweights in the automotive, fast food and alcohol groups, but their $4 million gamble will likely pay off thanks to advance buzz on their commercial. In it, soccer star David Beckham, who has a line of underwear with H&M, will appear either in his briefs or naked (by TV standards) according to fan votes of #covered or #uncovered. This could be the first Superbowl in history with higher female than male ratings.

dimon The PRV Report Card: This Weeks Winners & LosersPR LOSER OF THE WEEK: “F” (Full Fiasco) to Jamie Dimon, CEO of JP Morgan, for telling CNBC that the expensive government legal cases against his bank were “unfair.” In swanky Davos, Switzerland for the World Economic Forum, Dimon said the bank, which paid $13 billion to settle claims over mortgage securities dealings and $7 billion more over hinky derivatives, power trading and overselling of credit card products, faced “two really bad options” between settling or fighting the cases. Going to court “would really hurt this company and that would have been criminal for me to subject our company to those kinds of issues.” Criminal as in, say, fraud? Better not to have picked up this gauntlet.

george zimmerman painting 300x235 The PRV Report Card: This Weeks Winners & LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD to George Zimmerman, acquitted of murder and now trying his hand at  “art.” Last July, Zimmerman was found not guilty of the 2012 murder of Florida teenager Trayvon Martin. With a stack of hefty legal bills and job prospects presumably thin, Zimmerman has miraculously found his inner painter. His first piece, a blue flag with a patriotic verse painted on an 18 x 24-inch canvas, sold for more than $100,000 on eBay. His second work depicts prosecutor Angela Corey holding finger and thumb slightly apart with the caption “I have this much respect for the American judicial system – Angie C.” We fervently hope the art-buying world has even less than that for George.

 

AIG CEO’s Comment Goes (Deep) South

 AIG CEOs Comment Goes (Deep) South

THE PR VERDICT: “F” (Full Fiasco) for AIG’s Robert Benmosche.

Five years ago, when AIG was rescued by the US government, the insurer became the poster child for everything that had gone wrong in the financial services industry – inflated balance sheets, insufficient controls, and corruptive bonuses. The company then embarked on the steep path to restore its financial health and reputation. Led by Robert Benmosche, appointed CEO in 2009, AIG underwent a drastic turnaround, with uncompromising cuts to its balance sheet and work force. As a result, the US government was able to exit its investment with a profit of $22.7 billion and, in August this year, the company announced higher profits as well as its first dividend payment and share buy-back since 2008.

All’s well that ends well? Not quite. Benmosche managed to turn his interview with The Wall Street Journal from a PR opportunity to a disaster by comparing the 2009 outrage over AIG bonuses to racism in the Deep South. The uproar, he said, “was intended to stir public anger, to get everybody out there with the pitchforks and their hangman nooses, and all that – sort of like what we did in the Deep South…and I think it was just as bad and just as wrong.”

AIG’s staff undoubtedly worked hard; without them, the government bailout would have ended in tears for shareholders and tax payers alike. Nevertheless, the public cannot be expected to offer sympathy or gratitude. If Benmosche wanted to make employees feel better, he achieved the opposite. After a long crisis, all they wanted was to get on with their jobs, without battling constant controversy around their employer. Hard luck.

THE PR VERDICT: “F” (Full Fiasco) for AIG’s Robert Benmosche.

THE PR TAKEAWAY: Some fights can never be won. Executive interviews have some absolute “don’ts.” The most important is to never – ever! – compare anything that happened in an industry or in a company to a historic event rife with human suffering. The comparison will always sound deluded and bring out debate that widens the issue not narrows it. Compensation is also better left untouched, especially if it has already been under fire in the past. Executive pay was a PR battle AIG lost years ago. When coming back from a crisis, remember no headline is always preferable over a bad one.

For New Fed Chairman, the Message is the Medium

 For New Fed Chairman, the Message is the Medium

THE PR VERDICT: “B” (Good Show) to Janet Yellen (right; with Larry Summers) for her methodical approach and realistic expectations.

As President Obama prepares to name a new Fed Chairman, he may be well advised to look closely at the communications skills of the candidates. Ben Bernanke dragged the Fed into the modern age of communications and institutionalized commonplace PR strategies to the Fed’s tool kit.

A comparison of the two leading candidates, Larry Summers and Janet Yellen, suggests that both have communications know-how. No doubt Summers is a more practiced communicator, but Yellen has fully embraced today’s communications/transparency paradigm. Under Bernanke, she led a subcommittee on communications and presumably developed the playbook for publicly releasing FOMC minutes, issuing monetary policy “guidance,” as well as establishing a schedule of post-FOMC-meeting press conferences.

But despite Yellen’s studious approach to communications, Bernanke has had trouble staying on message. Bernanke suggested accelerating QE “tapering.” Markets reacted badly, and at his next press conference, Bernanke pushed back. The Fed would “continue to support the recovery,”  but his message was lost in the media glare. One live blogger wrote: “Bernanke seems frustrated that markets and pundits don’t understand the point of policy guidance.”

THE PR VERDICT: “B” (Good Show) to Janet Yellen’s methodical approach and realistic expectations.

THE PR TAKEAWAY: The best communicators focus on long-term objectives. While she has had some bad breaks managing her Chairman’s PR with the financial markets, Yellen believes good communications can support monetary policy and reinforce the Fed’s leadership. As she told journalists in April, “I believe further improvements in the FOMC’s communication are possible, and I expect they will continue.” No PR plan can work flawlessly. The institution you speak for is the message, not how aggressively you handle the media or how articulately a spokesperson expresses a viewpoint.