Wednesday, December 10, 2008

AIG, Detroit Three, V.A. and Berkeley Featured Among Top 2008 PR Blunders

RJ Note: Ah-- what a year it has been.

/PRNewswire/ -- The 14th Annual Top 10 PR Blunders List, compiled by San Francisco's Fineman PR (http://www.finemanpr.com/), features bailed out big shots, political snafus and a clueless Dept. of Veterans Affairs.

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 resort, 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 New 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, Chrysler CEO Robert Nardelli and Ford CEO Alan Mulally -- 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 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. Department of Veterans Affairs says "Shh!" To Veterans' Problems

In this day of digital justice it's surprising that some federal officials still believe their emails are private, as when messages between top officials in the Department of Veterans Affairs indicated secrets were being kept about appallingly high suicide attempt rates among veterans. According to the Associated Press, Dr. Ira Katz, top-ranking VA mental health official, emailed colleagues that "12,000 veterans a year attempt suicide while ... under [Veterans Affairs] treatment." Katz wasn't pushing for reform but hiding data from CBS News, even beginning the email with a "Shh!" Everett A. Chasen, chief communications officer for the VA, wrote that, "I don't want to give CBS any more numbers on veterans [sic] suicides or attempts than they already have -- it will only lead to more questions." Emails get leaked in most organizations, but the true Blunder is the Department's disregard for veterans' well being. Rep. Bob Filner, D-Calif., chair of the House Committee on Veterans' Affairs, told CBS News "this is disgraceful ... a crime against our nation, our nation's veterans. [V.A. officials] do not want to come to grips with the reality, with the truth."

4. Letterman asks McCain, "do you need a ride to the airport?"

Presidential candidate Sen. John McCain canceled what would have been his thirteenth appearance on CBS's Late Night with David Letterman, saying that he was suspending his campaign and "racing to the airport" to tackle the impending financial crisis. Midway through the show, however, Letterman learned that McCain was mere blocks away ... sitting down with CBS stablemate Katie Couric. Letterman obtained a live feed of the interview and, joined by stand-in guest Keith Olbermann of MSNBC, remarked at McCain's expense. McCain's response, when he did make it onto Late Night a couple weeks later, was apt but unapologetic: "I screwed up."

5. 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.

6. 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 & Co. and Schering-Plough Corp. 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."

7. Mark Penn: Spinning Out of Control

Mark Penn found himself dropped from the chief strategist role in Sen. Hillary Clinton's presidential campaign when The Wall Street Journal exposed Penn's work on behalf of the government of Colombia, a client for whom Penn was also involved in arranging passage of a controversial trade bill opposed by, among others, Clinton herself. Penn was removed from the helm, although his polling firm, Penn, Schoen & Berland Associates, continued to provide services to the campaign. He ultimately admitted to an "error in judgment," but how many of those can one person convincingly admit to? Penn's other unbelievable missteps throughout the year, including praising McCain attack ads and demeaning Clinton supporters, calling them "downscale voters," earn him a seat among serial PR blunderers. Jason Linkins of The Huffington Post called Penn "dumber than previously realized" and a "despised, incompetent ... microtrending ninnybot."

8. Senior Obama Campaigner Makes "a Monster" of a Slip

Sometimes a simple goof can be a major gaffe if committed by an insider. For example, Samantha Power, senior foreign policy advisor to presidential candidate Sen. Barack Obama, called Sen. Hillary Clinton "a monster" in a March interview with UK newspaper The Scotsman, then realized her error and immediately tried to withdraw her comment, claiming "that is off the record." However, in the dustup to follow, blogger Michael Goldstein of http://www.mondaymorningmediaquarterback.com/ noted that, "you can't do it. There is no off the record." Many journalists agree, including Gerri Peev, the Scotsman reporter who interviewed Power, who noted that journalists are "not in the business to self-censor ... [they are] in the business to print the truth."

9. "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.

10. Hut, Two, Three, Four, Berkeley Rants Against Our Corps

Berkeley, Calif., has always been known for an anti-establishment atmosphere, one in which free speech and independent thought are held dear. But when the Berkeley City Council denounced local Marine Corps recruiters as "uninvited and unwelcome intruders" and "sales people known to lie to and seduce minors," it incited yet another nationally covered culture clash depicting Berkeley's leadership as hopelessly out of touch. Although individual members of the Council did admit that they may have acted rashly, no apology was ever issued. According to Peter Schrag of the Sacramento Bee, the incident demonstrated "that you can be within shouting distance of one of the world's great educational institutions and still be terminally stupid."

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