2016-09-28T08:29:20.949-04:00Wells Fargo bank already lost its reputation over consumer fraud in its community banking division. Now it is looking ugly with the news that it punished whistleblowers who would not establish fake accounts. Clawbacks of unvested equity won't repair the bank's reputation, much less the CEO's. It is clear now that the bank was running an old-fashioned boiler room, flogging sales at the expense of consumers. Many years will pass before the bank lives this incident down, and it might never. The question remains of how the division got so far out of control. Clearly its managers were in on the scheme and executives above the division weren't asking questions. Pro forma attempts to stop manufacturing fraudulent accounts weren't followed up by discipline that made the bank's point clear and firm. High goals weren't relaxed to remove excessive pressure from employees. It was a text book management disaster for which Wells Fargo will be paying for years.
2016-09-27T08:18:37.044-04:00Google's engineers are readying YouTube to go after another billion viewers in Asia. That might not sound like much but from a marketing perspective, it is breathtaking. Companies that serve a billion or more people are but a handful, yet Silicon Valley thinks in these huge numbers regularly. It is no accident that media, such as YouTube and Facebook, are the vehicles reaching such large numbers. Communications are at the core of human experience. And, both media make room for individual contributions to the conversation whether it is cat videos or celebrations of someone's birthday. They encompass a universe of interests from which marketers and PR practitioners can segment those they want to reach. Social media have become the well from which the rest of the world draws.
2016-09-26T09:41:44.264-04:00The media are hyping tonight's debate between the two presidential candidates. It is unlikely to be the greatest political show on earth. Some media are predicting a viewership that will rival the Superbowl. Maybe so, but it is unlikely that most will last through to the end of the talk-fest. Both sides are going to spin victory out of the affair no matter who emerges as a front-runner. That is the nature of political debates. They are free publicity for the candidates whether or not they influence voting. That the media are flacking the debates is amusing. Usually that is a role left for the candidates' publicists. The real impact will be afterward in the polls, and we will have several days before those settle down. Meanwhile, get used to the heavy breathing from the pundits.
2016-09-23T07:41:01.243-04:00Yahoo has revealed that it was the subject of what is said to be the largest security breach ever -- loss of data on 500 million customers. Unfortunately for the teetering company, the break-in occurred in 2014, two years ago, and the public is learning about it now. Will that queer the deal of selling itself to Verizon? It is too early to say, but already, politicians are weighing in on the failure. Yahoo claims that the invader was "state sponsored", which means China or Russia. But that doesn't assuage the pain of the 500 million people who now must change passwords and hope their data is not used against them in some way. The incident raises a legitimate question about the quality of Yahoo's security and what Verizon is supposedly buying. The breach might be a death sentence to the deal and to Yahoo.
2016-09-22T11:16:08.392-04:00It is hard to prevent this when incidents like this occur. The narrative of blacks being shot by police officers is deep and bitter for the African-American community. Even when it is justified, the black community is suspicious and will rise in anger. Who knows the exact circumstances in Charlotte? Was the victim carrying a book or a gun? The police maintain it was a weapon. His family says it was a book that he was reading while waiting for a family member. A full-scale investigation by a neutral third-party is in order. Even then, it is unlikely to be accepted as the truth. What is obvious is that police are using their guns too quickly in these confrontations. The pistol should be the last resort and not the first. One can understand the fear that an officer feels when caught in a situation that could spin out of control, but they should be trained to control that emotion and to act more reasonably. In fact, they are but the schooling might not have taken as it should. Blue on black is a major PR crisis that needs swift resolution for the good of the country.
2016-09-21T08:29:17.565-04:00As this story discusses, algorithms are becoming a public relations issue. It seems Amazon is favoring products it distributes rather than giving customers the lowest possible price for products available through another store selling through Amazon. There is no good reason for the company to do that except revenue maximization at the expense of customers. The company ought to know better than to gouge, but it looks as if it is playing games with consumers over the hundreds of thousands of products it sells. The consumer, not knowing better, pays and moves on until an enterprising journalist reveals the duplicity. Amazon got its start as the lowest cost provider of books then other merchandise. If it has now changed its algorithms to favor itself at the expense of consumers, it should say so. The worst thing that can happen to the company is abandonment by consumers because they perceive the firm as dishonest.
2016-09-20T08:06:29.447-04:00The Federal government has announced guidelines for self-driving cars. The rules are voluntary but auto and tech companies are expected to follow them. This has created a balancing act -- how to spur development of safe self-driving cars while protecting passengers and others. There is no rulebook for doing this. Autonomous autos are a new phenomenon although they have been tested for years. The guidelines are an implicit recognition that the technology is here to stay and developers are near the final stages of building mass market offerings of vehicles that will steer, accelerate and brake themselves. This could be a public relations triumph or disaster depending on the quality of technology. We have seen already that Tesla's self-driving software is faulty. At the same time, Google's self-driving machines have traveled millions of miles with only a fender-bender or two when humans in other cars disobeyed rules and common sense. Self-driving autos not only have to look out for themselves but also for the other person be that individual a pedestrian or drunk driver. It is a huge technology challenge and a public relations question mark.
2016-09-19T11:09:45.127-04:00If there is one salient feature of Trump's campaign for president, it is his and his people's tendency to make up facts. We're used to politicians lying. It comes with the occupation, but Trump's claims are breathtaking. In the face of hundreds of reports, he will assert that he didn't do or believe something. That is the case with Obama's birth certificate, an issue he rode for five years up to and including the present presidential campaign. Kudos to the media for not letting him or his people to get away with it. This has been a rough time for the media because they are not trusted to report well, but they can and should state the facts. The facts are that Donald Trump gave interviews, press conferences and statements pushing the issue and now he denies that he ever did and he blames Clinton for the start of the questioning. Failure to own up to one's error is disgraceful, but nothing seems to bother Trump when it comes to truth.
2016-09-16T07:58:04.732-04:00Samsung is trying to recall 2.5 million Note 7 phones because of exploding batteries, but the way the company is going about it is a self-inflicted wound to its reputation and brand. The problem is confusing and missing information in instructions to the public for replacing their phones. What Samsung needs to do is to make the exchange as simple as possible. Turn off your phone, hand it to Samsung, and we will give you a replacement. Instead, Samsung is hedging its recall pending an official decision by the Consumer Product Safety Commission. It has also issued a software fix that limits the Note 7 to a 60 percent charge, but it hasn't made that generally available. Finally, Samsung says it needs more time to study the cause of the explosions. Leaving the device in the hands of consumers while one tries to figure out the problem is equivalent to pulling a pin on a grenade and handing it to a customer. There is no doubt Samsung's recall is massive and complex, but it needs to protect consumers first and by so doing, guard its brand. It doesn't work the other way around.
2016-09-15T08:05:03.913-04:00One urgent concern for PR practitioners is computer security. It seems anyone with a tad of recognition is being hacked. Colin Powell, Olympic athletes, the Democratic Party and on have all been invaded and their jewels of information released to the public. A question PR practitioners should be asking clients is whether they have anything in e-mail or on their computers that could compromise them. If so, PR needs to put into place a crisis plan against the day that the data is released by a hacker. The practitioner also needs to get the information off of the system if possible. There is little security in changing passwords, even if the words are difficult to decipher. Hackers use human engineering to trick people into giving away their protection. Look for more information releases in the future and more PR crises. It will take time to get ahead of hackers and the only way to do so is through strict computer discipline. Never write what you don't want the world to see.
2016-09-14T08:33:24.204-04:00It is easy sport to dump on North Korea and its leader, but sometimes the country's propaganda is too ludicrous to let slip. Consider this. It is likely the supreme leader, Kim Jong Un, can barely tell corn from beans. To say he is providing field guidance is a cruel joke on North Korea's hungry citizens. Note too that each ear of corn, including the one in his hand is perfect and without normal variation. Either the farmers hand-selected ears or there is a good deal of Photoshop in the frame. The hard-to-believe propaganda continues for two more photos and captions, neither of which has a shred of credibility. Also note that the Supreme Leader is surrounded by military men. Even in an innocuous exercise such as this, he has to project power, for that is all that keeps him in his rotten office. Propaganda has an effect when it is close to reality, which these photos and captions are not. One wonders how many more decades North Korea's citizens will tolerate such evil.
2016-09-13T09:16:46.899-04:00Apple computer is facing a consumer trust issue. Its product purchasers are asking, "What have you done for me lately?" They are looking for another breakthrough Apple product or service and so far, they haven't seen one. Call it post-Jobs letdown or the way things work, but the truth is that innovation is not a constant in any company. There are times when a firm can fundamentally change the course of industries as Apple has done, but they tend to be few and far between incremental improvements. Tim Cook surely must be aware of this, but the pressure is on him to amaze Apple's customers once again. That it isn't happening fast enough has Apple fans worrying that the era of radical innovation is over. It is a PR issue for the company and one that is becoming urgent to solve.
2016-09-12T07:45:00.759-04:00What does it say about a bank that it cannot control its employees better than this? Wells Fargo, one of the leading and some say the leading, bank in the US has fired more than 5,000 employees for fraudulent credit card dealings. The bank is paying a steep fine, and that is the least of its bad PR. It needs to redo its incentive compensation plan, the source of the fraud, and it needs better supervision over its credit card operations. One wonders how more than two million phony debit and credit card accounts could have been opened without that bank being aware of it. Clearly, there was a management breakdown of major proportions. Wells Fargo had a good reputation before this incident. Now it has to work hard to get back to where it was.
2016-09-09T08:29:08.450-04:00One PR tactic practitioners often condemn is silence -- making no effort to address an issue or to explain oneself. But, silence can and has worked, especially when the public supports individuals and organizations. Consider the National Football League. Concussions, child abuse, domestic scandals have all rolled off the back of the commissioner who has maintained a steadfast policy of non-engagement. He can get away with this because football is still the most watched game in America. Soccer pales by comparison as does baseball, basketball and hockey. Will it always be this way? No, but for the time being, the NFL is in a privileged position. It can do no wrong in the public's eyes. Come the day that the public tires of two teams competing on stripes, the NFL will have to be more transparent than it is today, but that might be years away. Meanwhile, it can exploit its popularity by refusing to comment on issues affecting the league.
2016-09-08T07:35:23.847-04:00Google has a plan for disrupting ISIS online recruiting efforts. The question is, will it work? The idea is that any time someone searches for ISIS propaganda online, Google will automatically serve advertising and links to sites that are contra ISIS. On the surface, that might not seem like much, but it is better than letting the terrorist sites stand as is. It is good PR on the part of Google to make the effort. Even if only one individual changes his mind as a result of the counter-information, that is far better than the lives at risk from the person's actions of suicide bombing or warfare. Google is of the size and power to be able to pull this kind of action off. Kudos to the company for being a responsible citizen.
2016-09-07T09:28:02.657-04:00ITT vocational schools closed suddenly and left 45,000 students in limbo. The closure came after the government barred federal financial aid and Pell Grants to its attendees. That happened because the for-profit institution had a bad reputation for poorly educating students and preparing them for real jobs once they are done. This is yet another example of how one's actions in the marketplace are viewed positively or negatively by consumers and the government. The only question is why ITT wasn't penalized sooner. Its former students are now left to scramble to complete their educations and in some cases to pay off their loans. Neither will be easy.
2016-09-06T07:47:41.197-04:00Samsung has taken the right action by recalling all of its latest cell phones even though the cost to the company will likely be between $1 billion to $5 billion. The company has lost its momentary advantage over Apple, but it doesn't want to take chances of exploding batteries in its phones. One asks how this could have happened and a partial answer is that the company was rushing to beat Apple to market. There also is the possibility of an unknown defect in the batteries it is using that has caused the meltdowns. Either way, the company has acted responsibly by getting the phone off the market until the problem is solved. It is good PR and it saves the company millions in possible tort costs from victims of the exploding phones. Tesla can learn a lesson here with its refusal to turn off autopilot in its cars even though it has caused at least one death.
2016-08-29T07:54:05.373-04:00One thing communicators should never be is smug -- convinced they and their clients are safe. There is no protection from events imagined and not yet thought of. This was brought home to me on Friday when I received a call informing me that my oldest brother had been in a bicycle accident and is on life support. He had pedaled thousands of miles without incident, but suddenly he plowed into the back of a truck. There is no way of knowing why such a thing could happen. It did. Now his wife and daughter must prepare to live without him and those of us who depended on his leadership will have to make our own ways. It is no use complaining about the unfairness of it all. Life is not a matter of even-handed justice. The good and bad both leave this earth and the only thing left of them are memories of what they did. Recollections of my brother will be fond and vigorous for he was that kind of person.
2016-08-26T07:53:28.474-04:00The science news is discovery of a planet 4.25 light years away. Little is known about it other than it is in the "goldilocks" zone suitable for life. The media went crazy with this news but it shouldn't have. It is clear the planet is so far away, any probe traveling less than the speed of light would take tens of thousands of years to get there. Further, there is no way to tell yet whether the planet has water or oxygen suitable for life as we know it. All we know is that it rotates a red dwarf star every 11 days and the only reason it is potentially habitable is that its sun is cooler than ours. It may take years if not decades of astronomical work to flesh out the details of the planet and some might remain hidden given its distance from earth. Why did the media play up the story? The scientists did and the media obliged. Secondly, the media probably didn't understand how far away the planet is, how many trillion miles go into a light year. Third, how would we communicate to a satellite at such vast distances? Each message would need to travel for 4.25 years to reach the instrument and another 4.25 years for a response. This is science hype at its worst.
2016-08-25T07:53:10.822-04:00There is little doubt pharmaceutical companies are sparking self-induced crises in their drug pricing policies. The latest uproar is over the EpiPen used by people with peanut and other severe allergies. The ingredients in the pen cost $10 but Mylan is selling the pens in packs of two for $600. The company has tried to justify its huge pricing differential but no one is listening. It has brought this PR disaster on itself, and it will be pilloried until it lowers its price. Mylan is not alone, however. New drugs coming on the market are costing $100,000 or more, and there is no way for consumers to pay for them without health insurance. Health insurers in turn are fighting back but to no avail. There are no generic drugs for some of these medicines at the current time. Pharmaceutical companies are getting a bad name because of this aggressive pricing -- and they deserve it.
2016-08-24T08:32:54.416-04:00The Nigerian government is claiming it has killed the terrorist leader of Boko Haram. The problem is that it has made that pronouncement several times before and each time Abubakar Shekau has reappeared in good health. To say the Nigerian government has no credibility in the issue is an understatement. In order for it to be believed, it needs to produce a body and other evidence that the bandit has indeed been slain this time. It doesn't look like it can given the nature of the attack -- an air strike in the jungle where the terrorists can easily disappear. Why does the government risk becoming a laughingstock with its multiple communications that it has killed the leader? It might be a twisted sense of PR -- providing hope to families whose lives have been destroyed by the group and whose girls have been kidnapped. A false sense of security, however, doesn't help anyone and none can be blamed for being cynical about Nigeria's leaders.
2016-08-23T08:08:49.424-04:00In a usual election year, this kind of negative PR would be enough to sink a candidate. Not this year. Hillary Clinton should thank the Republican party for putting up a candidate with more negatives than she has. Although it is early, it is looking now like Clinton will sweep most of the states in her march to the White House. Trump, although getting better, is so far behind that it would take a herculean effort to turn around his slide. Add to that, his lack of organization. Hillary has a campaign machine working behind her constantly. Trump has a skeleton staff and he has barely advertised his candidacy. Even though a judge has ordered the release of 18,000 new Clinton e-mails before the election, it doesn't look like this would hurt her much. The Republican Party's collapse this election year is a case study of bad PR. One can only hope that the party can revitalize itself before future elections.
2016-08-19T07:48:22.312-04:00It is a strange marketing and PR choice to ignore one's best customers yet Volkswagen is doing it in the diesel engine scandal that has overtaken the company. The conglomerate has spent billions settling claims for cheating on its smaller motors, but it has yet to take any action on its larger power plants that went into its Porsche and Audi brands. Porsche owners, particularly, are in a dudgeon over the lack of action on their high-priced vehicles, which are now devalued well below their selling points. Why has Volkswagen not addressed the problem? Probably because handling the fallout of cheating on its smaller engines is taking the company's entire time. However. ignoring one's best customers is never a good idea, especially if one wants to enhance the luxury brands. Volkswagen doesn't have much time left to rectify the situation. Lawsuits are pending and the corporation is not in a good position to defend against them.
2016-08-18T08:31:07.054-04:00This video opinion piece explains why American train travel is so bad. Amtrak is caught in a bind not of its own making. Were it free to operate, it might cut back on money-losing long haul routes and concentrate on three-hour trips between major cities. This means it would be primarily an East Coast service since there are few cities outside the East Coast that are interstate, close enough to serve and with sufficient passenger traffic. One can think of Chicago-Milwaukee, Chicago-St.Louis or Los Angeles-San Diego but the question remains whether there are enough business commuters between those cities. The challenge for Amtrak lies in Congress. Whenever Amtrak tries to remove a route, a Senator or Congressman will protest and force Amtrak to keep it alive. Amtrak doesn't have the lobbying power it needs to circumvent Congress, and it might never have. Hence, it is like the US Postal service -- another money losing entity. It knows what it should do but it can't get there. It is a major public relations challenge and one that Amtrak will be struggling with for years to come.
2016-08-17T08:46:25.188-04:00It seems this political season fact checkers have come to the fore and everyone is busy looking into the details of what candidates say. This is good but for one point. Who will check the fact checkers to make sure they are doing their jobs correctly.? It is easy for a fact checker to slip opinion into data being vetted, even if the checker is rigorous about the work. Facts are slippery. One person's body of facts are another's set of lies. One has to abstract himself from the noise and judge as objectively as possible what the truth of the matter is. There are obvious errors such as claiming President Obama was the founder of ISIS. There are subtle mistakes such as forecasting what the GDP might be under one's fiscal plan. It is with these latter kinds of errors that a fact checker can go wrong. Fact checking on the whole is good. The media should be doing much more of it but with caution.