Who Were The PR Winners And Losers of 2017?

Yes, 2017 feels like a lifetime ago, given our breakneck news cycle, but there were plenty of public relations lessons over the year for big brands and business categories. Here’s a look at those who came out on top, and others who took a reputation beating last year.

The Winners

2017 was like a charmed year for the digital commerce giant. Digital assistant Alexa won pop-culture status, its Prime expansion was successful, and it made a splashy bet on physical supermarkets. But the real PR coup was the reality-show-like sweepstakes to find a second headquarters. The HQ2 search generated a frenzy of positive media coverage as well as 238 proposals from individual North American cities, and it helped cement Amazon’s status as a desired corporate neighbor and employer.

After “Today” show star Matt Lauer was abruptly fired following allegations of sexual misconduct, it seemed that NBC would take a terrible blow to its reputation. But its swift action and skillful handling of the situation by the remaining on-air talent helped turn things around.  Savannah Guthrie and Hota Kotb announced Lauer’s sudden departure with grace and poignancy – in real time, on live television. That’s harder than it looked, and it was a solid win for the network and its flagship show, whose ratings are up significantly since the change.

For the mainstream media, 2017 was a year of ups and downs. The MSM has been aggressively criticized by the president, and public trust in the press hovers at 41%, according to Gallup. Yet most national outlets posted gains in the ways that matter – ratings and readers. What’s more, trust in journalism has actually increased over 2016. After the election, most news organizations got busy reminding us why they’re needed with a renewed commitment to quality reporting. Cable news – which logically should have experienced a downturn after an election year  – reported a huge boost in viewership. Ditto the national newspapers; both The Washington Post and The New York Times broke subscription records. Best of all, journalism organizations like ProPublica and The Center For Public Integrity are enjoying unprecedented support.

Cryptocurrency had a great year in 2017, breaking through the $10,000 price barrier and throwing off some of its shady reputation. Bitcoin in particular attracted the kind of media coverage that only enhanced its appeal, even when the coverage was skeptical, thanks to the sheer power of blockchain technology. Without a core of innovation, the bitcoin story would be just another fad. But blockchain is seen as “having the potential to reshape the global financial system and possibly other industries,” according to Bloomberg. Despite naysayers, it offered journalists and bloggers the perfect recipe of high-tech and high-risk.

Who could have predicted the speed and ruthlessness of the #metoo movement? There’s a reason why Time magazine gained currency for itself and the movement by naming “the silence-breakers” as its Person of the Year. It swept the country like a virus, and, despite valid concerns about a backlash, the impact is far-reaching.

The Losers

2017 also brought a reckoning of sorts for Facebook. Remember when Mark Zuckerberg was asked about reports that Russia had peddled “fake news” on its platform to influence the election? He called it a ”pretty crazy” idea. Within weeks, however, Facebook would own up to the fact that it sold more than $100,000 in ads to Russian accounts, and that foreign actors used its feed to spread false and divisive stories about candidates and issues. It’s not alone among social media companies, but the brand has suffered from its casual and misleading response to the situation. As The Verge put it, “Facebook’s inconsistent statements, its history of errors in reporting on its own ad platform, and its reluctance to share relevant data about Russian hacking have added to its credibility gap.”

Tired of hearing about Uber? That’s because 2017 brought a pile-up of hits to its reputation. In the first quarter alone it was accused of crossing a picket line after the first travel ban, mistreating drivers, and using a secret app to evade regulators. But the real wreck came when engineer Susan Fowler penned a scathing account of her year working there. Fowler wrote about a toxic culture riven by infighting, gender bias and relentless sexual harassment. Like a lit fuse, her post burned through the tech community and exploded into public consciousness. Yet as often happens, the crisis gave Uber the chance to turn the corner on its troubles by replacing founder and CEO Travis Kalanick. New CEO Dara Khosrowshahi was quickly beset with a fresh crisis, though, when news came out that Uber covered up a 2016 hack. Khosrowshahi’s blog post about the situation is a respectable first step in showing transparency, but he has a long way to go. Here’s hoping for smoother road in 2018.

United Airlines
As the world knows, UA hit turbulence with its disastrous handling of a passenger situation that was caught on video. As images of the bloodied man being dragged from his seat by airport police went viral, the airline made things worse with a series of legalistic and tone-deaf public responses. The cultural impact was huge, yet the United crisis also shows business resilience. Its stock price took a hit, and CEO Oscar Munoz was denied a promised promotion to Chairman. But as the outcry grew, United changed its tack. It launched a more authentic apology tour, quietly reached a settlement with the injured passenger, and pledged that nothing similar would ever happen on its planes. The stock price bounced back in short order. In fact, the more lasting impact will be felt in the form of greater customer-service consciousness across the major industry players.

Unlike United’s experience, the reputation damage from Equifax’s massive privacy breach will haunt it for years. Not only was it negligent in maintaining security, but it waited months before telling customers that their information might be compromised. Although CEO Richard Smith eventually rose to the occasion with a well-crafted apology, it was too little, too late, and he was voted out by the Equifax board. Its stock price plunged 15% after the breach was announced, and the damage was compounded by the news that Equifax insiders sold shares before it was known. Equifax now faces greater regulatory scrutiny, more Congressional hearings, and a class-action suit by shareholders.

The irony of Harvey Weinstein’s fall from grace is that it was so long in coming, yet the collapse was breathtakingly swift. As the dominoes fell in entertainment, journalism, and politics, each company and industry had to grapple with who knew what, and when. The results were often ugly. But the good news is that the awareness of systemic sexual harassment and misbehavior has reached a tipping point, and the cultural and business changes will be profound and in many cases, permanent.

PR Lessons From The Bungled Equifax Crisis

Public relations people like to talk about “getting out in front” of a crisis; in fact, for a taste of real-life preparation, check out this stress-inducing story about a crisis simulation by The New York Times‘ Sapna Maheshwari. Yet it’s a myth to think you can prevent any event that could wreck a company’s reputation. Sometimes it’s a struggle just to mitigate the damage in the days and weeks after a crisis blows up. Still, one goal of all communicators – similar to the physician’s creed of “first, do no harm” – should be to avoid making the situation worse.

Unfortunately, that’s exactly what happened when the news broke that credit-reporting giant Equifax suffered a breach that could compromise the privacy of some 143 million consumers. How did it escalate? And what can we learn from how Equifax handled the crisis?

First, Do No Harm…To  Your Brand Credibility

Take the full measure of the situation

Maybe Equifax believed that the media and public would shrug off the breach. If so, that was a big error in judgment. The situation was unprecedented in its sheer size and the number of people it placed at risk. YouGov BrandIndex, which tries to quantify reputation impact of negative events for brands, compared the Equifax situation unfavorably to the Volkswagen diesel scandal. One difference, however, is that not everyone owns a Volkswagen. As a YouGov spokesperson put it, “Equifax is on a different scale – much wider and more personal.” My personal theory about the company’s failure to assess the situation is that as a largely B2B brand, Equifax underestimated the level of concern and anger on the part of those affected.

Prepare for a negative reaction

Yes, this one’s laughably obvious, especially when a company is lucky enough to be able to control the announcement of the bad news. And Equifax did have that luxury; it disclosed the breach a full six weeks after it occurred, and new information suggests it had experienced a similar intrusion in March of this year. With so much time to prepare, it should have started an internal security investigation, and maybe it did. But it also needed to stage carefully crafted communications with customers, stakeholders, and regulators, as well as a media announcement and full plan for mitigation of harm to those affected. Instead the company seemed unprepared for the response to its disclosure. The site it set up for customer inquiries was quickly overwhelmed, and after the initial statement, the CEO did not formally respond until four days after the announcement.

Let professional communicators lead the way

This is what top PR professionals and crisis experts are paid for. In the wake of the breach Equifax offered free credit monitoring to customers – but the offer required anyone who enrolled to waive their right to sue the company. (Equifax later backpedaled on the waiver.) This is a sign of a classic crisis management mistake — letting lawyers manage the response messaging. An attorney’s goal, of course, is to limit  liability. But this particular move worsened the reputation damage by making Equifax look like it was trying to avoid culpability at the customer’s expense.

Take responsibility

To some extent, Equifax did this, despite the liability it can bring. CEO Richard Smith‘s apology is frank and forthright. “Protecting your data should have  been our highest priority”… his comment in the press release notes. “We let you down, and it’s going to cause enormous pain. For that, I apologize. Obviously, we’re overhauling our security now.”
Yet, plans for the “overhaul” were not explained. And if you look closely at the language in the company press release, it’s – well, weaselly. The headline details a “cybersecurity incident” (not a “breach”) and later refers to “the application vulnerability” – huh? It also apologizes for the “frustration and inconvenience” experienced by consumers, which obscures the graver potential consequences of damage to one’s credit rating or even identity theft. Again, lawyers are crafting the communications, at the expense of clarity and transparency.

Tap a crisis response leader

When things blow up, it truly takes a village – or a skilled team – to cover rapid media response, on-the-record media interviews, social media communications, stakeholder and government outreach, and other aspects of a swift and appropriate crisis response. But there should be a single expert who is empowered to lead the response — a communications professional, not the CEO, and not the on-camera spokesperson. Too often, companies give decision-making power to a group of individuals that may comprise their legal counsel, Board of Directors, and key executives, leading to group paralysis.

Address any questions about the company’s response

Surely one of the senior executives planning the public announcement of the breach noted sales of Equifax shares by insiders just days after the breach was discovered. Those officers included the Chief Financial Officer and the U.S. Information Solutions president, who, along with another senior executive, sold nearly $2 million in company shares. Corporate officers sell stock all the time, and the timing of the transactions may have coincidental, but the optics are terrible. Equifax responded by dismissing the insider sales as “a small percentage” of its shares, emphasizing that the executives weren’t aware of the breach when they sold. That’s not an ideal response, as it sounds far too casual about the transactions, and it raises the question of who did know about the breach, and when they knew it.

Align communications

It may seem a small thing, but the day after it disclosed a cyber-intrusion affecting nearly half the U.S. population, @equifax tweeted, “Happy Friday.” Of course, the tone-deaf tweet was pounced on by critics, with good reason. It’s hard to imagine why the brand’s social media communications weren’t looped in as part of a unified response to the announcement of the breach. Ditto customer relations; those who called the number provided by Equifax and managed to reach someone or receive a return call were told that the call-center company brought in by Equifax had no information to share. Aligning and centralizing communications to respond to a business crisis is simply PR 101.

The good and bad news for brand Equifax is that this situation will drag on for a very long time, as lawsuits mount, an FTC investigation proceeds, and a DOJ inquiry into the insider trading commences. Just yesterday we learned that the Consumer Financial Protection Bureau and 34 state attorneys general have announced inquiries into the attack. And, of course, this is the kind of thing that members of Congress jump on. Smith, the Equifax chief executive, will appear before the House Energy and Commerce Committee in October, and the Senate Finance Committee has requested information about the timeline of events. He may very well lose his job over the breach, and such a move, though traumatic for any such corporation, might help Equifax move past the worst of it.

There’s plenty of time for the brand’s reputation to sink even lower, and yet there’s every opportunity for Equifax to learn from its mistakes and take steps to improve the situation over the longer term. The best thing is can do is to explore the causes and ramifications of the breach so thoroughly, and invest in solutions so heavily, that it becomes a data security poster child for other companies who are vulnerable – and that means everyone.