Pile On Groupon

Groupon: time for a lot of PR and a new ad

The “fastest growing company ever” owns today’s fastest spreading controversy. Groupon has triggered outrage with Super Bowl ads that appear to mock serious issues, primarily China’s occupation of Tibet. Oscar-winner Timothy Hutton begins the key commercial by acknowledging Tibet’s woes only to segue into the virtues of fish curry from a Tibetan restaurant purchased at a discount thanks to Groupon. The ad’s tagline is “save the money.”

On the face of it, the ad appears to be a sophomoric satire linking a company’s everyday offerings with a global crisis, a la Kenneth Cole’s widely criticized tweets about the Egyptian uprising. Only later has it been explained that Save the Money is a legitimate cause-based program, not an iteration of Groupon’s discounting premise. The ad is meant to simultaneously spoof celebrity sanctimony and Groupon’s viral bargains. The problem is that Groupon is too clever for us. Its CEO, Andrew Mason, confirms as much in a next-day blog response that The Wall Street Journal calls a “non-apology apology.”

Groupon seems to be joining other web ventures that proved their clout with a Super Bowl sponsorship, although turning down Google’s $6 billion buyout is a much cooler demonstration. Amending a media mix (television now in addition to online) entails reaching out to new audiences as well as re-connecting with current ones. It calls for a basic message, not an obscure one made under the assumption that everyone already grasps the company. It can have humor–a Super Bowl advertising staple–but it must use that multimillion-dollar window to display the brand. So beyond their controversy, Groupon’s ads miss the mark as effective communications. Articles on the ads have cited the agency, Crispin Porter + Bogusky, as being known for edgy work. This invokes Al and Laura Ries’ warnings in The Fall of Advertising & The Rise of PR about shops that are more focused on artistic expression than marketing fundamentals.

Groupon has deepened its self-inflicted wounds with CEO Mason’s off-putting response on his company blog. He insists that the ads support real social causes (impossible to tell at first glance). He then points fingers at other offensive Super Bowl ads, primarily those that objectify women. He defends his ad agency, citing their precedent for irreverence with their commercials for Hulu.com. In short, Mason acts upset that people are upset with his company. He is going to need a lot more PR, an infusion of contrition, and a new ad:

SCRIPT: GROUPON “WE’RE SORRY”AD

A “backstage” setting with lights and cables visible. A clapperboard fills the screen, scrawled on its face: GROUPON “WE’RE SORRY” AD.

Clapper Loader (off screen): Groupon, take two!

The clapperboard claps and is pulled out of the shot, revealing CEO Andrew Mason sitting in a tall director’s chair. Standing around him are actors Timothy Hutton, Cuba Gooding Jr., and Elizabeth Hurley.

Mason: Hello, I’m Andrew Mason, CEO of Groupon. By now, you’ve probably heard about our Super Bowl ads that offended many people who thought we were making fun of important social issues such as human rights in Tibet.

We’re sorry. The ads were confusing and sent the wrong message. The right message is that Save the Money-dot-org is a real program soliciting donations and building awareness for worthy causes around the world. Groupon supports this program because while we’re working to save you money locally, we’re also thinking globally. Please visit Save the Money-dot-org to learn more and to give. Thank you for your understanding.

Timothy Hutton nervously leans toward Mason.

Hutton: Do you want us to say anything?

Mason (pleasant): No.

Hutton straightens back up. The foursome smiles and waves at the camera.

FADE IN: Groupon logo with titles beneath: www.savethemoney.org

FADE TO BLACK

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POSTSCRIPT 1: Groupon CEO Andrew Mason blogs a straight-forward apology on Thursday, Feb. 10, and pulls the ads.

POSTSCRIPT 2: Groupon fires Crispin, Porter + Bogusky with CEO Andrew Mason saying they placed “too much trust” in the ad agency. CP+B says it was simply end of project work and wishes Groupon well.

McChrystal and The Year of Bad Public Relations

In my last post, I deemed 2010 “the year of bad public relations.” Not profound or poetic, but sadly accurate. The latest proof: General Stanley McChrystal, recently ousted from his Afghanistan command due to comments by him and his staff in a Rolling Stone article entitled “The Runaway General.”

Last September, I blogged about Gen. McChrystal and his “Commander’s Initial Assessment,” praising the plan’s communications component. At that point, Gen. McChrystal was demonstrating a grasp of media and message since dissolved with his military career.

The Washington Post reports the conclusion among Pentagon officials that Rolling Stone “betrayed” Gen. McChrystal by printing off-the-record remarks. The low drone you’re now hearing is not the vuvuzela section at the World Cup; it’s the groaning chorus of PR professionals. NOTHING is off-the-record (my old boss Susan Tellem is particularly good at making this point with clients–woe if you don’t heed her). That does not mean there aren’t journalists who abide by the “off-the-record” request. It means you can’t count on the protection. It means never say anything you don’t want converted into global content.

This is not a call for “no comment,” tight scripting, puff pieces or similar banes of good public relations. It’s a reminder that common sense is the foundation of any PR action. Common sense would question a Rolling Stone exclusive with the General, given its historic anti-establishment bent (this is the publication that gave Goldman Sachs its now iconic “vampire squid” description). Again, I’m not advocating puff pieces with staunchly sympathetic media, but the pitfalls of this choice should have been obvious.

Duncan Boothby, Gen. McChrystal’s civilian press aide, was the first to fall on his sword when the story–and the story about the story–broke. His counsel to the General before greenlighting the interview should have been:

• Which key audiences are we reaching with this media? Are there other/superior media options to reach these audiences?
• What messages will we convey with this media?
• How will the eventual piece support our communication objectives and overall strategic goals?

And of course the $64 question:

• What’s the worst that can happen?

Perhaps Mr. Boothby went through the above protocol. Perhaps the conclusions were solid for proceeding with Rolling Stone. Perhaps the problem was solely in execution, a lack of common sense from the General and his staff. The reports are damning of the officers’ prolonged, alcohol-fueled sessions with journalist Michael Hastings. There is nothing a public relations professional can do in such cases. Even if he/she could eject the media and lock the liquor cabinet, the damage would be irreversible.

In the end, this is a severe personal failure by Gen. Stanley McChrystal, particularly disappointing considering his past communications competency. When untested and largely unknown leaders stagger in the spotlight–BP’s Tony Hayward and Goldman Sachs’ Lloyd Blankfein chief among them–we can cite their ignorance and indifference regarding public relations. Gen. McChrystal had no such excuse, which is why he had no choice but to resign. Leadership does not give you the right to say whatever you want. It only increases the weight of your words.

More Lawsuits Than Brand X!

The New York Times reports a growing phenomenon in the marketing world: companies suing their rivals for claims made in attack ads–or comparative advertising, if one opts for the gentler term. Pantene vs. Dove, Iams vs. Science Diet, AT&T vs. Verizon, and Campbell Soup vs. Progresso are listed as examples of ad wars that have prompted legal action.

Aggrieved companies’ recourses range from complaints to the National Advertising Division of the Council of Better Business Bureaus to lawsuits under 1946’s Lanham Act for false advertising. Verizon’s red and blue map comparing its nationwide 3G coverage to AT&T’s is one of most notable recent cases. AT&T has sued, claiming that Verizon’s graphic of patchy coverage implies that it has no cellphone service whatsoever in the map’s blank expanses.

Admittedly, I enjoyed the Verizon commercial with a dejected AT&T smartphone arriving at the Island of Misfit Toys from 1964’s “Rudolph, the Red Nose Reindeer.” I didn’t run out and buy a new phone; I’m just a child of the ’60s who got the joke.

The real issue: at a time when all advertising is being questioned for its effectiveness, measurability and ROI, how much significance do attack/comparison ads have? Going a step further, do the ads actually diminish the brand’s reputation and dignity? (Now there’s some serious ROI.)

In The Journal of Economics and Management Strategy, three European academicians assert that comparative advertising signals “quality” when a market entrant takes on an incumbent brand. They conclude that the known threat of lawsuits lends credence to the entrant’s comparisons for the very fact that they are being made under such litigious conditions.

In contrast, AdWeek columnist Barbara Lippert takes a dim view of side-by-side comparison ads. She lambasts Dove for an ad that equates “soap” with “scum” and deems such product comparisons a throwback to the advertising of 50 years ago.

Are the complaints and lawsuits ultimately counterproductive when they produce negative publicity? (And they do.) The NYT article presents expert conclusions that the Campbell/Progresso legal battle ended up driving away customers for the entire ready-to-eat soup market.

Inevitably, the issuer of an attack/comparison ad is acknowledging that the rival brand is #1. It is always a position of weakness. Witness Buick’s campaign for the LaCrosse that morphs its vehicle with the Lexus 350. Blatant and desperate. Barbara Lippert points out two campaigns where also-rans at least showed creativity and humor: Avis’ “We Try Harder” and Apple’s “Get a Mac.” But did Avis ever beat Hertz? No. Have Macs outsold PCs? No, but their overall sales are up; however, some attribute this not to the ads but to a halo effect from the iPod along with Microsoft’s self-inflicted wounds from Vista.

I work across the marketing mix, but the PR guy in me trumps the ad man on this issue. Attack/comparison ads inherently reinforce perceptions of inferiority and can stir even greater negativity with counter-claims and lawsuits. At the end of the NYT article, James P. Othmer sums up the shortfalls of the attack ad mentality: “they’re not thinking about what consumers want to hear — they’re just talking at conference tables about how to strike back…”

What do consumers want to hear? Nasty ads and subsequent reports of lawsuits don’t top the list.

POSTSCRIPT: Enfamil maker Mead Johnson loses in a lawsuit brought by private-label baby formula maker PBM. The federal court ruled that Enfamil ads constitued false advertising by suggesting that cheaper baby formula could impair babies’ health and development. The judgement: $13.5 million.

PR, Stat–Part II

In an earlier post, I reviewed PR efforts on both sides of the Obama Administration’s healthcare reform plan. Since then, the public relations war has escalated. Town halls held by pro-administration politicians have taken on the appearance of a WWE tour with heckling, shouting and scuffles…and plenty of media attention on the confrontations.

Other developments of note:

Sarah Palin has refused to go quietly from public life as she took ownership of the soundbite “Death Panels,” used as a synonym for a House provision to have Medicare cover end-of-life counseling. And per the social media era, she has used Facebook as her communications platform on the subject.

Wendall Potter, former corporate communications VP for major insurer Cigna, claims that the insurance industry is engaging in aggressive public relations tactics including use of buzzwords to “get people upset.” Now a member of the watchdog “Center for Media and Democracy,” Potter is knowledgeable and passionate about healthcare reform, but his “revelations” about the insurance industry’s PR maneuvers are far from explosive.

AARP is spending millions on ads promoting healthcare reform. But the lobbying group is facing unaccustomed opposition from its own constituents, manifested in protests and membership cancellations.

President Obama is pledging a new PR push of his own, including attending the type of town hall meetings where protesters have assailed Democratic representatives and senators. And to prove that Sarah Palin does not have the corner on Web savvy, the White House is updating its “Reality Check” site to counter claims against its initiatives.

Still, the tide is turning against the Administration. President Obama’s poll numbers are slipping, and a plurality is opposed to his healthcare reform measures. The Senate is dropping the end-of-life counseling provision, deeming it “confusing.”  The White House is backing away from a government-run health insurance option, saying now it is “not the essential element” of healthcare reform.

The last point underscores the Administration’s problem–just what is healthcare reform? If a government-run option–for better or worse–is taken off the table, how do President Obama and his allies define their program? The opposition has far less trouble creating word pictures–death panels, socialized medicine, Big Brother, boondoggle. Granted these terms are clichéd and simplistic, but they convey concepts quickly. The Administration has the more difficult role in the court of public opinion, that of the prosecutor who must make a case beyond reasonable doubt. It may not be fair that the White House is at such a disadvantage, but that’s its true Reality Check.

PR, Stat!

As the Obama administration ramps up its health care reform agenda, the keyword “public relations” is also ramping up in news about campaigns for and against the President’s efforts. Officially, any sweeping changes in our health care system will be debated and decided in Washington. The real battle will take place in the roughly 3.5 million square miles of American territory outside the Beltway.

Reuters is unstinting in its assessment of PR’s importance to the Administration’s health care overhaul when it describes a “public relations disaster” for the President and his allies: the release of a Congressional Budget Office report which concludes the Obama plan “would cost $1 trillion over 10 years but only provide coverage for 16 million of the estimated 50 million Americans who are uninsured.” The report’s findings are based on the submission of an incomplete Senate bill, a misstep that some attribute to the absence of Sen. Ted Kennedy, a decades-long champion of health care reform and political pro who would have never allowed such a “strategic blunder.”

A new group is communicating opposition to the President’s plan and presenting a double-edged PR sword in the process: Conservatives for Patients’ Rights(CPR), founded by Rick Scott, one of the backers of the Swift Boat ads. The presence of Scott and the firm that created the attack ads against John Kerry, CRC Public Relations, constitutes a new, vast right-wing conspiracy to supporters of the Obama plan. Scott is not lying low; he speaks directly to the media, is prominently featured on the group’s Web site, and touts his background as a hospital chief executive.  CPR is using a “facts and testimonials” approach in its commercials and infomercials. This is in contrast to the folksy “Harry and Louise” ads of the 1990s, when actors portraying an everycouple voiced concerns about the Clintons’ health care program.

Big bucks and big personalities (none bigger than communicator-in-chief Barack Obama) are taking sides in the health care debate. However, regional efforts may have more impact as lower-key, more trusted figures bring to the case to constituents and neighbors. One example is an association of state politicians, doctors and business owners in Washington state speaking in support of the President’s plan. Granted this group is part of a national coalition and includes members of the state’s congressional delegation, but their advocacy at the local level–one Rotary lunch or one e-mail response at a time–will enjoy immediacy and interactivity.

The outcome of this today’s health care debate will depend heavily on public relations. Honest, consistent information must be exchanged between all stakeholders. Experts preaching from on high have never been more out of vogue. The real experts: anyone who’s taken a child to the emergency room at 3 in the morning, anyone who’s held a spouse who just received a life-threatening diagnosis, anyone who’s had to cut workers because of insurance costs, anyone who regrets a career in health care because of the roadblocks to administering or receiving healing. In 2009, we don’t need Harry and Louise to speak for us. We will do it for ourselves.

Hearts and Minds, 2009

General David Petraeus

Agence France-Presse reports the United States and its allies will step up the “information war” in Afghanistan.

 “US and NATO officials increasingly see public relations as crucial to turning the tide against the militants who have successfully spread their message through radio, the Internet and mobile phones,” according to the story.

The battle for “hearts and minds,” per Lyndon Johnson’s quote about where ultimate victory in Vietnam was to be won, is genuine. It is not glorified spin or soundbites. It is not the Nazi propaganda machine’s descecration of news and history. I wrote an article for AdWeek about the need for a cabinet-level department devoted to communications, as we had faced a century of adversaries who understood the power of “the message.” 

Duties for a “Department of Communications” would include:

• Understand audiences domestic and foreign, interpreting their motivations, cultures and needs.
• Utilize communications channels from grassroots to global, comprehending the effect each has on a target audience.
• Receive input from key audiences since effective organizational communications is always bi-directional.
• Advise the president in a forthright manner, establishing a source of counsel as unvarnished and valuable as a secretary of state reporting on sensitive international negotiations or a secretary of defense assessing troop readiness.

America’s escalation in the Afghan info war is essential to victory, and military leaders such as General David Petraeus are describing a methodology similar to the steps I list above. The Taliban are adept communicators, shown by their mix of channels to exhort and intimidate: leaflets, radio, the Web, mobile phone images.

Imagine how Goebbels would have delighted in the Taliban’s most modern tools–beaming photos of slaughtered civilians to handhelds in the Blitzkrieg’s path. Imagine if the Nazis had dominated the depiction of the Battle of Britain in an isolationist America. Instead, we seized the technological and informational advantage as Edward R. Murrow reported on live radio “This…is London,” describing a heroic people under bombardment, strengthening our resolve for the fight to come.

When the truth spreads, populations reject the Taliban’s barbarous presence. Disillusioned Pakistanis in the Swat Valley who have lived under Taliban occupation are assisting government forces in retaking the region. A cellphone video of a Taliban commander flogging a young woman has become a rallying symbol.

Whether they are in cubicles or a battlefield, people must give and receive information. Failure to uphold this communication mandate leads to failure, period. Companies collapse. Wars are lost. President Obama has pledged a renewed commitment to Afghanistan with changes in military leadership and techniques. Taking it to the enemy in the information war will prove that commitment.

Everything Old is New Again

Commentary on the demise of old media and old marketing is at a crescendo, with the motif “everything has changed.” Not so. Technological and economic developments have merely verified what many have espoused for years: no one can afford or tolerate the waste inherent in the traditional marketing process. Seth Godin wrote Permission Marketing 10 years ago, insisting we only spend time on people who want to hear from us (and talk back to us). Al and Laura Ries have built a dynasty of thought on Positioning, published three decades ago, urging companies to stop trying to be all things to all people.

Advertising has been taking its lumps for being unidirectional and indiscriminate. PR has been suffering related criticism, downright sobering for those of us who proudly reference the Ries’ The Fall of Advertising & the Rise of PR. Tom Foremski blogs the “old rules” of PR are going by the wayside due largely to media transformation. Carpetbombing the world with press releases is out. (He’s right in his doubts about traditional mass-distribution of releases, but I disagree with his assertion that they are obsolete as a communications format.) His guest blogger, Kathleen Mazzocco, describes the future of PR resting with every company considering itself a media company. This correct analysis echoes David Meerman Scott and his excellent book, The New Rules of Marketing & PR.

In my previous post, “Remembering Real Estate,” I invoke the phrase “you have to earn your business, not buy it.” As a Realtor®  in the 1990s, that meant connecting with the people most likely to select me their agent, not plastering my face on every shopping cart in town and hoping someone would call. The “earning” approach took research, sweat, follow-up and creativity (I had to make sure prospects remembered me after I had chatted with them or delivered sales data in the pre-Zillow days).

The Internet is not abolishing marketing maxims; it’s proving them out (per Godin, Ries, Scott et al.). Big, sloppy, bet-hedging and expensive won’t cut it in any marketing discipline. Properly engaged, people will come to us, demanding to be our customers and unpaid sales force. Know who they are. Put your eggs in those baskets. Earn that business.

Sounds Like a Villain to Me

An item from Associated Press: a husband-and-wife real estate team is suing a writer-producer on the TV show “CSI” for naming “two shady characters” after them, supposedly in revenge for a real-life home transaction that went sour. The couple is seeking $6 million in damages for defamation, invasion of privacy, and loss of income.

Plaintiffs Melinda and Scott Tamkin cite an episode of CSI featuring a character named “Melinda,” a real estate agent who dies under questionable circumstances, and a second character “Scott,” “Melinda’s” booze-swilling, porn-gazing, mortgage-brokering husband, who is named as prime suspect. In their complaint, the Tamkins say that the original surname of the characters was Tamkin (changed to Tucker in the shooting script) and that actors who physically resembled them were auditioned for the roles.

In speculating on his clients’ loss of income, the Tamkins’ attorney Anthony Glassman says, “In this business, you never know why the phone doesn’t ring,” as in MAYBE that CSI episode has something to do with it. Glassman claims that certain online postings about the episode have used the original characters’ surname “Tamkin,” which he contends could have created negative impressions during Web searches for the actual Tamkins.

I was a real estate agent for five years so I’m also qualified to speculate the reasons behind the Tamkins’ dormant phone. Perhaps it’s because of the shell-shocked housing market. Perhaps the Tamkins are spending more time suing people than prospecting. Or maybe, that CSI episode really did hurt Melinda and Scott’s reputation…”Did you know Melinda was murdered? Scott was the prime suspect. I saw the whole thing on CSI. Well, I’m not listing my house with them!”

But we’re missing the true tort here. The writer-producer-defendant from CSI is Sarah Goldfinger. No word yet if Ms. Goldfinger is suing the estate of Ian Fleming for naming James Bond’s most nefarious adversary after her.