The Goldman Sachs Hearings: A Sh**ty Deal For Taxpayers

What more is there to say about this week’s financial hearings? Goldman Sachs executives, including the infamous “Fabulous Fab” Tourre, were grilled, lectured, and scolded by members of a Senate panel in a much-anticipated spectacle this week. But, instead of Watergate redux, the hearings played out more like a group of middle school principals rebuking eighth-graders.

Sure, the Goldman lieutenants were evasive in their answers. Their strategy amounted to trying to run out the clock while pretending to search through huge binders for email printouts. In fact, there’s a funny video mash-up of the stalling and funfering on the Huffington Post. But, to me, the hearings were a PR miss for the panel. The day didn’t damage Goldman’s reputation as much as it embarrassed the Senators who were supposedly in charge.

And not just because it was a master class in political grandstanding. What bothered me was that when Blankfein finally took the hot seat, he actually seemed to know what he was talking about. As smug and defensive as some of his answers were, they pointed up the chasm between his grasp of the issues and that of the panel members. As Senator Jon Tester put it, “It’s like we’re speaking a different language.”

I don’t expect the Senate members to be derivatives experts, even with 18 months to prepare. But, there weren’t many legal or interrogation skills on display either. What does it say about the prospects for real and constructive financial reform that the best our Senators could come up with was used car and casino metaphors and lectures about client service ethics? They seemed out of touch, self-serving, and a bit simple.

Senator John Ensign, currently under investigation for ethics violations himself, was a poor choice for the panel. Senator Carl Levin made a tactical error by endlessly repeating an email description of a “sh**ty deal” the bank was trying to sell a client instead of asking the author of the email to read his own words. The wobbly-voiced Senator Susan Collins chewed up time by chewing out the executives for…well, for chewing up time. Your tax dollars at work.

Perhaps it’s a moot, point, as the Goldman case will almost certainly be settled. And, as entertainment, the hearings gave us a pretty good show. For the legislators, the day may have even helped channel populist outrage into the theatre of democracy. But, unfortunately, good theatre is about all it was. And, that’s a sh**ty deal for the rest of us.

Banned Ads Are A Robust PR Opportunity

It played out like a publicity stunt. Not one as blatant as the annual Super Bowl banned-ad PR-fest. But, at first it seemed a little, well, overblown. The sexy Lane Bryant lingerie commercial featuring curvy model Ashley Graham was rejected by both ABC and Fox for showing “too much cleavage” and being therefore too risque for the family hour. The PR brouhaha and the networks’ response to it gave a new irony to the term “boob tube.”

Seizing the opportunity, Lane Bryant posted a blog entry that accused the networks of having a – you guessed it –  double standard when it comes to how much skin is too much. After all, those skinny Victoria’s Secret models are all over evening  TV, even before primetime. Speaking directly to its customers, the retailer asked why ABC and Fox should “make the decision to define beauty for you.” It even used the “c” word – censorship.

Viewers, bloggers, and media weighed in and piled on. The result? A plus-sized PR win for Lane Bryant and its new Cacique line.  And the sultry ad’s already, uh, racked up over 200,000 views on YouTube.

What I love about this situation is how deftly Lane Bryant took a fat PR opportunity and made it even larger. First, they used social media to mobilize their female customer base and shape the situation as a cultural issue, revealing a bias against women with curves. The initial post positioned Lane Bryant as an advocate for its customers, and the contrast with Victoria Secret was inspired. (Since both are owned by Limited Brands, it’s a win-win.)

It was also a nice move to allow Ashley Graham, who appeared in the spot, to do press interviews. As a gorgeous, highly paid, and successful model, she has more media appeal than a corporate spokesperson. Yet, her success doesn’t undermine her credibility. She’s still a full-figured woman, and her words speak as well as her other “assets,” as she calls them.

The networks’ response also tells you something about who’s PR savvy. ABC issued a defensive and humorless statement accusing Lane Bryant of seeking publicity, and denying that it was treated any differently from any other advertiser. But, Fox, no PR slouch, seemed to realize it was losing middle America. It’s promised to air the uncut ad during this week’s American Idol. Stay tuned.

Web Anonymity And The Future of Reputation

The anonymous Web is like Freud’s id – a seething mass of pure impulse beneath a civil surface, in constant need of tamping down. While I believe wholeheartedly in free speech, it’s pretty clear that our Constitution’s framers didn’t envision ChatRoulette… or even the anonymous online comments section of the average newspaper. The balance between privacy and accountability is a delicate one.

But it may be tipping. Several news organizations, including The New York Times, are backing away from anonymity in online comments. Recently The Washington Post said it will not only require commenters to register, but give greater weight to those who actually post under their own names. The Huffington Post has said it will review and revise its policy to limit those who “hide behind anonymity to make vile or controversial comments.”

Anonymous speech may also have been set back by the The Cleveland Plain Dealer‘s outing last week of an unidentified poster who made defamatory comments on its site. It turned out the commenter’s email address was that of a local judge who’s been the target of scrutiny by the paper.  (The judge denies posting the comments, although her 23-year-old daughter has owned up to making some of them.) But, it’s no wonder that free-speech-loving Netizens are mourning the good old days of  i-nonymity.

Can we handle the truth?

But, a new development may cloud the move towards transparency. A freshly unveiled reputation site has the PR community buzzing. Though still in beta, Unvarnished aims to be a resource of community-contributed professional reviews of people. Theoretically, anyone can weigh in on the competence, workstyle, or character of a peer, boss, subordinate, vendor, or work colleague, without being identified.

Users must register through Facebook Connect, and comments are subject to moderation, but they are fully anonymous. Think LinkedIn without the anodyne recommendations that CNET’s Molly Wood calls “tongue baths.” And without the accountability. Ouch.

Reputation isn’t dead, contrary to some opinions, but it sure is changing. Early reviews indicate that Unvarnished plans sufficient checks and balances, along with reasonable moderation of posts, to avoid a bloodbath. The site aims to be an aggregation of anonymous, yet credible, comments, which, in its way, is a far greater reputational challenge than a Gawker-like snark-fest.

As in the real world, Web comments that are vile, hateful, or unreasonable are dismissed, or at least taken with a bucket of salt. But if both anonymity and credibility are preserved, what you don’t know just might hurt you, and your online reputation. And, today, is there any other kind?

Wall Street’s Apology – So Far, Just PR?

Two former banking executives got another workout last week. So did the “apology PR” movement. This time it was Citibank ex-CEO Charles Prince and former director Robert Rubin. Under the hot glare of cameras – and the even more heated glares from the Financial Crisis Inquiry Commission, each expressed the most sincere-sounding contrition to date on the financial mess.

But, the Wall Street chieftains still have a lot to learn about apology communications. Morgan Stanley’s John Mack offered up a statement of regret in February. Others have released carefully worded apologies, or non-apologies, since most are short on specifics. (An exception is that of former Bear Sterns chief executive James Cayne, who expressed regret and personal responsibility after his firm folded. Losing $900 million of your own cash will do that.)

The bankers might do well to look at JetBlue’s 2007 response to the Valentine’s Day PR storm that nearly grounded the company. Founder and former CEO David Neeleman’s mea culpa might be the perfect corporate apology. It didn’t happen a year later under legal or regulatory duress. It was offered in many forms, from a major media apology tour, to a YouTube video. Most importantly, it was timely, heartfelt, and part of a larger plan to prevent future incidents.

By contrast, the Wall Street apologies are more like the muttered regret of a misbehaving child being dragged through the motions by reproving parents. What I find most amusing is the groupspeak. For an industry known for the healthy egos at the top, there’s an awful lot of royal “we’s” being used. As the Goldman Sachs fraud investigation ripples through world markets, we can expect even more, um, sharing of responsibility, and maybe more creative mea culpas.

Yet, an authentic apology shouldn’t point the finger at subordinates, ratings agencies, interest rates, homeowners, regulators, or anyone else. One of the first rules of crisis PR is to take responsibility. The executive who stops the buck will, paradoxically, see his personal stock go up, liability notwithstanding.

But the most glaring omission here is the eye to the future. That’s what Wall Street really owes Main Street. Not just heartfelt statements of regret. Or admissions of responsibility by top management. Or generous philanthropy. Those amount to nothing if the banking industry continues to oppose basic financial reform measures like, say, those covering derivatives. The buck – and the spin – stops there.

Can ProPublica Save Journalism?

The Pulitzer Prizes were awarded this week. Though most of the winners for journalism were traditional, major-market newspapers, there were some notable exceptions for 2010. ProPublica, the independent, not-for-profit journalism group dedicated to investigative reporting, became the first non-traditional media organization to bring home the prestigious award.

Barely a year old, ProPublica won for “The Deadly Choices at Memorial,” an unflinching piece about the controversial life-and-death decisions made by healthcare workers at a New Orleans medical center during Hurricane Katrina. A well-researched, compelling, and deeply disturbing article, it created a sensation when it was published in the New York Times magazine.

My first reaction to the news was relief. “Watchdog journalism isn’t dead,” proclaimed Prize administrator Sig Gissler. And, it’s true that the number and variety of investigative pieces recognized is very encouraging. But, as esteemed as it is, a Pulitzer doesn’t guarantee commercial viability. Awards don’t pay salaries, lure advertisers, or even compel readers.

What speaks more to the current journalism crisis is the ProPublica financial model. It’s funded largely by the Sandler Foundation, so it’s independent of advertising revenues (and of its own Board of Directors.) Its staff works in partnership with established media outlets like the Times, the Washington Post, CNN, and others. In fact, worthy as it is, I doubt the Katrina piece would have received the attention it did without the credibility and readership of the Times.  The Pulitzer will no doubt encourage further collaboration between online and traditional media.

It will also probably make philanthropists, investors, and media executives take another look at the ProPublica model. In a New York Times op/ed piece published three months ago, David Swensen and Michael Schmidt of Yale argue that the public-private business template is the independent, well-resourced journalism that we have come to take for granted and are in great danger of losing. It’s not a one-size-fits-all solution by any stretch; the authors calculate that a news organization like the New York Times, for example, would require an endowment of $5 billion. That kind of philanthropy doesn’t grow on trees, living or dead.

The Pulitzer doesn’t sell newspapers, as many point out. But, by recognizing the fruits of a new model, it has mandated that we take a hard look at the stakes of continuing along the old journalism path. And, that’s good news.

When Brands Try To Be Cool (Part 2)

Brands trying to be cool is an obsession of mine, and I’ve noticed how they seem to come in clusters. The latest rash of high-stakes rebrandings is in cable and Internet services. In February, Comcast renamed its TV, Internet and phone services as Xfinity. The PR picture wasn’t pretty. Bloggers and branding experts pounced on the name as suggestive of porn, and it’s already landed on several worst name-change lists. I don’t have a problem with the X-factor, except that it means zip. Rebrandings need to come with a rationale, and there’s no real story or substance behind this one.

Though AOL’s declaration of independence last year as Aol. received mixed reviews, the company’s communications did a better job of making the conversion meaningful.  The presentation of the new brand against various images, like the green squiggly, was fresh and interesting. I saw the typeface and “full-stop” dot as a metaphor for the break with the past. Never mind that critics immediately dubbed the new look “LOL.”

But, the toughest branding and PR assignment might be the massive campaign announced this week by AT&T. It’s not a name change, but an attempt to reposition it as a “lifestyle brand.” Reports say the AT&T logo will appear without the company name, in what seems to be swoosh-like aspirational thinking, if not outright grandiosity. The new tagline is “Rethink possible.” Hmmm. Could they have taken a bite out of partner Apple’s iconic “Think different” campaign?

Maybe they’re just polishing Steve Jobs’ ego, but I think Apple envy seeds inspiration among most marketers, particularly those who utter the word “lifestyle.” But, in this case, it plays out as a defensive move. AT&T reportedly wants to elevate its image after the uninspired and unpopular Luke Wilson campaign aimed at archrival Verizon. (Disclosure: Verizon Wireless is a client of my agency. So, don’t take my word for it. Read about it from an objective source here.)

Okay, I’m biased, but something tells me I’ve seen this movie. All service companies have their issues, especially in the cutthroat telecom and wireless categories. But, AT&T has more baggage then most. It’s the brand we love to hate, and its record of innovation falls pretty short of Apple’s fertile history. Without a legitimate story to tell, a brand campaign is just that…a campaign. Unless its network capacity issues are fixed and it reinvents itself as a true innovator, even the most brilliant marketing can’t help AT&T think its way out of this one.

After Sea World and Nestle, How Risky is Social Media?

I once had a client whose CEO was so PR-averse that his response to requests for media interviews was the Zen-like platitude, “The spouting whale gets harpooned.” That unfortunate phrase popped into my head as I read stories like “Shamu Attack Exposes Social Media Risks.” The Orlando Sentinel and others recounted how @Shamu, the Twitter feed set up by Sea World, morphed from a branding platform into a business and marketing liability after the tragic drowning death of a killer whale trainer.

A month later, Nestle’s Facebook page was brandjacked by Greenpeace activists in a well-orchestrated protest against its use of palm oil.  It’s been called a social media fail for Nestle, with plenty of mainstream coverage. The move promises to usher in a new era of online activism. As digital media strategist Jeremiah Owyang blogs, “Facebook page brandjacking is the new form of tree-hugging.”

So, what’s a brand to do? Is social media simply too risky for some categories or companies? My answer is no, for several reasons.

Out of sight is not out of mind. If an organized activist movement is like war, a single protest is like a brushfire. If you tamp it down in one place, it just flares up somewhere else. The anti-deforestation movement didn’t even start on Nestle’s Facebook page. It migrated there only after Nestle removed a Greenpeace protest video from YouTube. Nestle might have been better off engaging with protesters directly or creating its own YouTube channel. But, the learning here is that having no Facebook presence won’t prevent an orchestrated protest.

You need allies. Another reason not to hide from the social media dialogue is that it robs a brand of a natural constituency that might be mobilized in its defense. Olivier Blanchard makes this point in an excellent and thoughtful post on the Nestle response. I’d add that a brand with Nestle’s history of boycotts has even greater reason to engage with its core customers and nurture those relationships. They tend to come in handy when the heat is on.

A brand community is a listening post. A Facebook or Twitter presence is a practical move for a company with vocal detractors. It’s easier to monitor, listen, and respond when the action’s on your own turf. The palm oil-deforestation issue isn’t new. The key here is effective and experienced community management, along with good planning.

It’s a mouthpiece in a crisis. Or, it can be. As seen in the Sea World incident, a sudden, tragic occurence is vastly different from an organized boycott. But controversy around wild animals in captivity – a big part of the online dialogue after the incident – isn’t new. Again, Sea World should be accustomed to protests, and to communicating its position under pressure.

In this case, it showed. Sea World immediately suspended the Shamu Twitter feed after the incident. But, it continued with the dialogue, directing it to the more appropriate (and generic) @SeaWorld_Parks and its moderated blog. It’s still posting both lighthearted updates as well as serious statements about the incident, the measures being taken since February 24th, and the future of  whale Tilikum. Its Facebook page, after being briefly overrun by ghoulish posts and images, was quickly transformed into a forum for mostly civil discussion.

It takes time to build. As all PR professionals know, the most vehement attacks aren’t easily resolved through civil dialogue. But, that’s when a planned and organized response is most needed. Though they usually simmer slowly, most precipitating crisis incidents happen suddenly, and the response window is a matter of hours, not days. You can’t transform inexperienced staffers into battle-seasoned community managers. And, you can’t build a social media following from scratch when you need it most.