Bad PR often comprises two components:
- The poorly received action of an organization.
- The poor communication surrounding the action.
These three recent examples of bad PR have this duality in mind.
GROUPON: At one point, Groupon was hailed as “the fastest growing company ever.” The online coupon leader that snubbed Google’s multibillion-dollar acquisition offer could do no wrong–until it started doing wrong. The era of fawning coverage ended during Super Bowl XLV when Groupon aired a satiric TV commercial that appeared to mock the plight of Tibet, a de facto Chinese vassal for a half-century. As controversy grew, founder Andrew Mason issued a statement that was derided as a “non-apology apology.”
Groupon’s corporate errors and communication blunders have continued. The company was criticized for unorthodox accounting practices that many claimed concealed costs and losses. As Groupon prepared for its IPO, Andrew Mason wrote a internal memo extolling the company’s virtues and refuting critics. The memo became public in what many considered a deliberate act and a potential violation of the SEC “quiet period” rules. Groupon’s PR chief of two months, Bradford Williams, left after the memo leak.
An additional PR kiss-of-death has been coverage of Goldman Sachs’ role in boosting Groupon’s early valuation estimates on its way to becoming a lead underwriter for the IPO. A one-time Internet high-flyer, Groupon is now laying low as its initial public offering will comprise only 10% of the company at a total valuation of $12.5 billion, less than half the amount once touted.
BANK OF AMERICA: $5 doesn’t sound like a lot these days but in the words of the Los Angeles Times, it bought Bank of America a great deal of PR woe. As the Occupy Wall Street movement was gathering a sense of permanence, Bank of America announced a $5 monthly fee for using its debit cards to make purchases. It was the type of news that sends politicians straight to their soapboxes, as President Obama and Vice President Biden both showed in their prompt criticism.
It was up to Bank of America CEO Brian Moynihan to explain the bank’s action and assuage the public. Mr. Moynihan’s soundbite in a CNBC interview: “…we have a right to make a profit.” No word yet if former BP CEO Tony Hayward sent Moynihan a thank-you bottle of Dom Pérignon for making everyone forget his “I would like my life back” during the 2010 Gulf of Mexico oil spill.
The smallness of the $5 fee actually amplified its significance, contrary to any internal counsel at Bank of America that might have predicted minimal PR impact. It appeared petty, an attempt to make extra money off people’s expected interaction with the company, similar to the airline baggage fee controversy. The card fee only adds to BofA’s grilling in the court of public opinion, precipitated largely by mortgage problems inherited with its Countrywide acquisition.
THE CATHOLIC CHURCH: In mid-October, Bishop Robert Finn and the Catholic Diocese of Kansas City-St. Joseph were indicted for failure to report child abuse. The action arose from the case of the Rev. Shawn Ratigan, a priest facing child pornography charges. During 2010, the parish elementary school principal wrote church leaders with concerns that Fr. Ratigan fit the profile of a child predator. An archive of disturbing photos of children, including children in the parish, was discovered on Ratigan’s laptop in December 2010. The diocese did not report the matter to law enforcement or parents until May 2011.
Bishop Finn is the highest ranking U.S. church official to be charged in the ongoing sex abuse scandal. He participated his diocese’s 2008 multimillion-dollar settlement to abuse victims, during which he promised law enforcement to immediately report any suspicions of abuse by clergy.
Despite the gravity of this case, Time reports that the Vatican has stayed largely silent. In one statement barely more illuminating than a censoring “no comment,” a spokesman for the Holy See said: “There is a legal procedure under way. Any intervention could be interpreted as interference.”
The Catholic Church has suffered denunciation, jailed clergy, lawsuits, bankrupt dioceses and settlements with sex abuse victims exceeding $ 1 billion in America. A study commissioned by the U.S. Catholic Church cites the permissiveness of the 1960s as a contributing factor in the abuse perpetrated by priests, a conclusion roundly dismissed by critics as an attempt to absolve abusive clergy and the hierarchy that concealed their acts. While the church’s non-response to the Kansas City indictment may be better than the combative, defensive tone it has taken in the past regarding sexual abuse reports, it is yet another PR misstep amid a crisis that has endured for years.
POSTSCRIPT 1: As outcry continues and other banks shy away from similar charges, Bank of America announces ways that customers can avoid the $5 debit card fee through maintaining minimum deposits and engaging certain services with the bank.
POSTSCRIPT 2: Bank of America rescinds the $5 fee for using debit cards for purchases. An online petition by 22-year-old Molly Katchpole, a part-time nanny, is credited with starting the consumer revolt against the fee. Watch this action become textbook content on viral marketing, social media and the importance of public relations.