PR blunders of 2008: A Whitman's sampler
Some things are just too dang fun to ignore. Like this selection of PR blunders of 2008 -- the 14th Annual Top 10 PR Blunders List -- compiled by San Francisco's Fineman PR. Selections are limited to avoidable acts or omissions that caused adverse publicity; image damage done to self, company, society or others; and acts that were widely reported in 2008.
Here are five of the 10 just to whet your appetite:
1. AIG All-Expense-Paid Retreats ... Paid By YOU: Mere days after receiving an $85-billion federal bailout package, American International Group Inc. dropped nearly half a million dollars on an executive retreat to the posh St. Regis Monarch Resort (shown in photo), complete with "spa treatments, banquets and golf outings," according to the Associated Press. Public reaction, as many watched 401(k) and other investments deflate, was heated. Ousted AIG CEO Robert Willumstad condemned the fete as "very inappropriate" when questioned by Congress, and presidential candidate Sen. Barack Obama said participating executives "should be fired" during a debate with Sen. John McCain. AIG compounded the damage when it proceeded with an $86,000 England hunting retreat. New York Attorney General Andrew Cuomo promptly launched a fraud probe, saying "our message to AIG today is simple: The party is over."
2. AP to Detroit Three: "old way of doing business just won't fly." Already reeling from the $700 billion Wall Street bailout, consumers, taxpayers and legislators were deeply offended when the leaders of the nation's Big Three automakers -- General Motors CEO Richard Wagoner (far left in photo, next to UAW's Ron Gettelfinger), Ford CEO Alan Mulally (second from right) and Chrysler CEO Robert Nardelli (right) -- flew to Washington in separate corporate jets to ask Congress for $25-billion ... without a turnaround plan. PR Week reported that "it made the Big Three appear out of touch, and evoked memories of the AIG retreat (see No. 1 above) controversy." The Los Angeles Times reported that, "their first attempt was a lemon." So when the execs made their second foray to Washington to further plead their case, they drove there in hybrid vehicles ... and made sure everyone knew it. But Meredith Vieira on Today was unimpressed. "They should have carpooled," she said.
3. Nike Just Blew It: When self-described "good, solid" marathoner and elementary school teacher Arien O'Connell unexpectedly clocked the fastest time in October's San Francisco Women's Marathon, besting her personal record by over 12 minutes, race sponsor Nike had a golden opportunity to support those who "just do it." However, Nike only checked times of those in the allegedly "elite" front-running pack. By the time O'Connell realized she had been fastest, all places had been awarded and Nike would not recognize her victory. Later that week, pressured Nike recanted its initial stance, declaring O'Connell "a winner" but not the winner. C.W. Nevius of the San Francisco Chronicle lamented the tepid ending to "what could have been a lovely Cinderella story." Only after competitor Reebok stepped up to award O'Connell free shoes for a year and a $2,500 donation for her classroom did O'Connell receive her "first place overall" trophy. (Photo of Nike's new Zoom Kobe athletic shoe.)
4. Merck & Co. and Schering-Plough Corp.: Profits with Side Effects. Prescription for a Blunder: market cholesterol drugs Vytorin and Zetia with a memorable $100-million plus advertising campaign. Withhold study results showing that the combo doesn't work as claimed ... for 21 months. Watch the drugs pull $5.2-billion in revenue in 2007 alone. Side effects, though, may include widespread consumer backlash, around 140 civil class-action lawsuits, and the unwelcome attentions of Congress, the U.S. Department of Justice and a coalition of 35 state attorneys general, according to the Associated Press. Makers Merck and Schering-Plough allegedly didn't release the results due to internal scientific concerns. Matthew Herper of Forbes reported there were "reasons to doubt the result [of the study]." Under pressure, Merck and Schering-Plough pulled their quirky "Food and Family" ads, but dwindling investor confidence still pushed Merck stock down to Vioxx-era levels. Martha Rosenberg of AlterNet.com opined, "Merck is repeating its mistakes ... It's getting tough to find any Merck drug that can hold up to scrutiny."
5. "Absolut Mistake," says PR Week: Swedish vodka-maker Absolut is famed for its clever, well-executed advertising campaigns, but the company hasn't realized it's a small world after all. According to PR Week, ads for the Mexican market from the company's "Absolut World" campaign showing the western U.S. as Mexican territory "courted animosity" and "stirred up negative sentiment from ... [those] who complain about the porous U.S. border" after appearing on U.S. blogs. Absolut pulled the offending ads and proffered a public apology on its corporate blogs, but competitor Skyy Vodka capitalized on the situation. According to Ken Wheaton's Advertising Age blog, Skyy did "what a marketer should do in a situation like this, [taking] advantage of a competitor's headache" by distributing a humorous press release in which it touts Skyy's U.S. origins and production. Smart opportunistic marketing ... with a twist.
-- Robert Trigaux, Times Business Columnist