Economic Crisis – PR Best Practices
Tuesday, May 26th, 2009
The current U.S. economic environment is certainly a trying time for most businesses but eventually this period will end giving rise to unique business opportunities for firms that are correctly positioned. Biz360 was asked a novel business question by a top-tier firm in Silicon Valley to help them in formulating their “break-away” strategies. Specifically: are there any key learning experiences, including positive and negative ones, in managing a firm’s communications during an economic crisis?
Biz360 analysts looked at over 18,000 news stories related to the current economic crisis from a September 2008 through March 2009 timeframe for GM, Chrysler, Citigroup, AIG, Merrill Lynch and Sun Microsystems and how they managed the public’s perceptions of their brands. Metrics included Coverage, MediaSignal, a measurement of audience reach based on the circulation / viewership of media coverage tempered by how prominently a brand was mentioned in the article, and Tone, a measurement of how positive, neutral and negative a particular article was concerning a particular business.
GM and Chrysler were top newsmakers in coverage related to the economic crisis. Primary coverage drivers for the automakers included 1) Lack of Planning 2) Layoffs 3) Viability 4) Earnings and 5) Financial Responsibility.
Financial firms Citigroup and Merrill Lynch and Insurance conglomerate AIG garnered next highest media visibility in stories that mentioned 1) Earnings Losses 2) Federal Bailout Burden on Taxpayers 3) Questionable Business Practices and 4) Planning for the Future and 5) Executive Compensation.
Summary of Key Media Issues
Auto Makers
- Planning for the future – basic business effectiveness
- Lay-offs – sticking it to the ‘little man’
- Viability
- Earnings
- Financial responsibility
Financial Firms
- Earnings
- Taxpayer burden
- Business practices
- Planning for the future
- Executive compensation
Overall
§ Auto makers were chastised more for basic business competency whereas Financial firms were pilloried more for moral / ethical issues
§ Neither outcome was pre-planned
§ Issues differ for different market verticals
PR Opportunities That Eluded GM – An Example
- GM is an excellent example of “missed opportunities”
- GM is now effectively characterized as a incompetent business, uncaring of its employees, a non-innovator, and which may no longer even be viable
- Did you know:
– A Buick won the 2009 Best Car of the Year award (Money Magazine)
– The ZR 1 won the 2009 Automotive Excellence Aware for Performance (Popular Mechanics)
– Cadillac won the 2009 Best Resale Value Award (KBB)
Conclusions
- Both the finance and automotive brands were not proactively aware of the issues, nor their details, confronting them
- No effective response strategy was in place
- No public awareness of steps being taken, or other positive factors, which could lessen the impact of the stories that grew to dominate their brands
- The finance brands were among the most positively perceived global brands nine months ago and are now arguably the most vilified brands
- The automotive brands have been suffering from a longer-term brand erosion – and we know many of the specific issues as to why that exists within today’s media – issues that could be addressed at least to some extent
- In the time that a major brand becomes initially aware that something can, or will, be an issue and the time that everyone is fully aware that it has now become a major PR issue is small
- GM and AIG are not necessarily managed by complete incompetents, yet these mission critical media issues escaped management’s early warning systems and now threaten these companies’ continued survival
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