Goldman Sachs best marketing move would be to shut up

Some hugely successful companies are never going to be loved or even liked. Top of that list: Oil companies and banks. The smart move would be to take their billions in profits and be happy with that. For some reason, though, that’s not enough.

Thus we get

Goldman Sachs is considering a corporate branding campaign in a bid to improve its battered reputation, and has even discussed placing Chief Executive Officer Lloyd Blankfein on the “The Oprah Show.”

The oil industry tried something similar a few years ago. Here’s what I wrote then and it stands up: The oil industry should just give a gag order to itself. Yes, they are making a helluva a lot of money — the biggest challenge they face is choosing between "obscene" and "pornographic" when describing their profits. They feel compelled to defend their earnings because … well, I don’t know why. Because some PR person said they have to? The only explanation that anyone would believe — "Because we can" — is apparently not an acceptable sound bite.

The oil companies’ profits don’t depend on the public’s goodwill. They make the overwhelming majority of their money on wholesale, not retail. For them it’s all about price and reliability. As BP has proven all you really have to do is keep your head down and your environmental disasters in Africa or other places the major media don’t cover.

True, Goldman et al. do depend slightly on public goodwill. The fact that they’re being investigated by everyone except the commissioner of baseball has made some public groups suspend their relations with Goldman. But a PR campaign about what alleged good Goldman does is exactly the wrong move. All it will do is keep the issues alive in the public eye. The public isn’t going to believe a damn thing Goldman says anyway. I mean I don’t even believe their justification for the campaign:

Fiona Laffan, Goldman Sach’s head of media relations in Europe, Middle East and Africa, told a communications industry event here that mistrust and hatred of bankers, not just those at Goldman Sachs, remained near an all-time high and that the bank, as an industry leader, needed to do a better job of explaining what it did and how.

Please. We all know what you do and how and we were all in favor of it until you nearly cost us the economy. You’re just scared about how we’ll respond if someone can prove you were betting on the failure of companies you were giving financial advice to. Look, just sit still and shut up and we’ll forget all about it. The US public has the attention span of a mayfly on crystal meth. Just wait and let BP’s decision to roast turtles work in your favor.

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10 Worst Marketing Blunders of 2009

1) NBC GOES ALL LENO ALL THE TIME

Edsel … New Coke … Lenovision.

NBC has joined the immortals of marketing stupidity. This year the molting peacock network and president Jeff “Have They Fired Me Yet?” Zucker decided to turn five of the primest pieces of prime-time real estate — the hour between 10 and 11 PM from Monday through Friday — into the Jay Leno hour.

The result? A 28% drop in viewership (through mid-November). This has not only killed network revenues but done in affiliates who have no lead-in for their late news casts.

Despite this, Jeff “10% Of Americans Are Unemployed and I’m Not?” Zucker recently said that all is going according to plan. “Right now, in terms of its performance on the television network, at NBC, in terms of ratings it’s doing exactly what we thought it would do.” Comcast recently bought NBC in what must have been an attempt to copy the government’s cash for clunkers program. Comcast shareholders can now only hope they are being lied to. The worst case scenario is that Mr. Z believes what he is saying.

On the plus side:

  1. It is now possible to buy every ad slot during the Leno show for less than the cost of a house in Detroit.
  2. The federal witness protection program is using guest slots to hide people.

2) TIGER, TIGER BURNING BRIGHT

(Originally #9 — Who knew?)

Because I have a really limited imagination I thought the big celeb marketing mishap story of the year would be Michael Vick’s failed attempt to become a spokesperson for PETA. Then along came Tiger who prefers women with bad nose jobs to the Swedish bikini model he is actually married to. The story broke on Nov. 27th, when Mrs. Woods apparently decided to prove her own golfing expertise. This was unfortunate for Accenture which two days earlier had kicked off its annual Tiger campaign. A print ad which ran in the Nov. 30th Wall Street Journal featured Tiger Woods walking in the rough under the headline: “The road to high performance isn’t always paved.” And watch out for the trees and fire hydrants. Accenture has since declawed its Tiger connection.

UPDATE: File this under “Pull the other one, it’s made of wood.”

“We decided several months ago to discontinue Gatorade Tiger Focus, along with some other products to make room for our planned series of innovative products in 2010,” Gatorade spokeswoman Jennifer Schmit said in an e-mailed statement.

3) BANKERS CUT BONUSES, INCREASE SALARY & BLAME JESUS

First the banking industry made a big show of cutting the obscene bonuses it was paying itself for going on the dole. Meanwhile they hoped no one would notice the allegedly eliminated bonuses were now being paid as plain old salary.

But wait … that’s not all!

Apparently still feeling that their efforts to destroys the economy were still underappreciated, bankers started claiming Jesus wanted them to do it.

“The injunc­tion of Jesus to love others as our­selves is an endorse­ment of self-​interest,” Goldman’s [inter­na­tional adviser Brian] Grif­fiths said Oct. 20, his voice echo­ing around the gold-​mosaic walls of St. Paul’s Cathe­dral, whose 365-feet-high dome towers over the City, London’s finan­cial dis­trict. “We have to tol­er­ate the inequal­ity as a way to achiev­ing greater pros­per­ity and oppor­tu­nity for all.”

How much LSD do you have to take to interpret Scripture this way? However much it is, it is certainly being passed out at all the best financial institutions. Two weeks later, Barclays CEO John Varley spoke at the venerable St. Martin-in-the-Fields and tried to wrap the Bible around his bonus.

“There is no conflict between doing business in an ethical and responsible way and making money. We make our biggest contribution to society by being good at what we do. Profit is not satanic.”

I guess it all depends on who gets to determine how we define ethical and responsible. Perhaps Varley could have gotten away with this specious argument had he not added this gloss to the text after the service: “Is Christianity and banking compatible? Yes. And is Christianity and fair reward compatible? Yes.” (Not a good sign when a banker can’t even get his verb and subject numbers to add up.) Hey John, can we parse the word “fair” for a moment?

I believe the renowned 20th century theologian Ray Price put it best when he asked, “Would Jesus wear a Rolex on His television show?”

4: GM EXPLAINS AWAY ITS “LITTLE PROBLEM”

In the face of the greatest single corporate collapse in the history of the world, GM rolled out an ad that inadvertently explains the company’s failure.

It is a veritable symphony of weasel words.

Let’s be completely honest, no company wants to go through this.

By the end of that first sentence it is clear this ad has no intention whatsoever of living up to that initial clause. You can tell because the final pronoun is never made specific. That “this” covers billions of sins. It implies we all know what has happened without saying what that was. It is everything to everyone and thus means nothing. Is “this” an utter failure of leadership? Or is it an inability to have even the vaguest understanding of the needs of the marketplace? Sadly, I suspect “this” is “an economic calamity no one could have foreseen” – the preferred phrase of everyone from Alan Greenspan to, well, the Detroit-based car makers. There is no taking responsibility anywhere in this ad just as there has been no taking responsibility at GM for decades. (Read more here)

5) VOGUE: BLACKFACE IS THE NEW BLACK

Vogue The October issue of French Vogue had a photo spread of the very Caucasian Lara Stone painted head to toe in dark make-up. Vogue went with the old “I’m sorry if you found my words insulting” defense and told the Daily Mail “it was unaware it had caused offence, but said it could not give any further comment.” (Worth noting: Italian Vogue’s issue for the same month was filled with actual Black women.) In a keeping up with the KKK move inflight magazine EasyJet ran a photo spread featuring brooding generic models dressed in black POSING IN FRONT OF BERLIN’S HOLOCAUST MONUMENT.

Fortunately for me marketers just can’t seem to figure out that Nazi = Bad. This years examples:

LATE BREAKING STUPIDITY UPDATE: NYT runs gift guide with special section devoted to:

“Somali fashion, do-it-yourself henna kits, children’s books that draw inspiration from the lives of Barack Obama and Sonia Sotomayor: it’s not hard to find gifts created for and by people of color this holiday season.” (emphasis added)

Why it’s almost like they’re real people!

6) CHOCOLATES SHAPED LIKE PRESIDENT OBAMA & MORE

CandyExpress said its commemorative Barack Obama heads would only be available for a limited time, unfortunately it wasn’t limited enough. Off the top of my head I would say there are three things Mr. Obama should not be used to advertise: Chocolate, fried chicken (a German company did it), watermelon (that’s a yet). However, the Russians came up with a bunch of things I’d never thought of. They used our President to advertise a tanning salon, a dental clinic and pre-packaged ice cream with the slogan “Everyone’s talking about it: dark inside white!” The bars have a chocolate-flavored center embedded in a layer of vanilla.

Obama Daughters DollsHowever these are just idiocy, the sheer stupidity award goes to Beanie Baby maker Ty. First they decided to sell two new dolls named Sweet Sasha and Marvelous Malia. Then they tried to deny they were named after America’s First Kids.

“[We] chose the dolls’ names because “they are beautiful names,” not because of any resemblance to President Obama’s daughters, said spokeswoman Tania Lundeen. “There’s nothing on the dolls that refers to the Obama girls,” Lundeen said. “It would not be fair to say they are exact replications of these girls. They are not.”

Sorry dear, but in order to get away with a lie like that you have to be a bank.

7) STUPIDITY? THERE’S AN APP FOR THAT

The word of the year really should have been app. The ubiquitous iPhone has spawned an industry of companies trying to market their wares by providing allegedly useful and/or humorous apps. To paraphrase Pogo, this confronted Pepsi with an insurmountable opportunity. The company released an app called Before You Score for its Mountain Dew AMP brand. The app gives you 24 different types of women (sorority girl, etc.) and offers “appropriate” pick-up lines for each type and other similar information.

Not to be outdone, LawFirms.com, a legal referral site, decided to get attention with a campaign featuring the (fictitious) app iCoyote. It “packs all of the features of a real immigrant smuggler into the iPhone. Using GPS, navigate through the patrol packed desert without worrying about that pesky Border Patrol.”

The app included a variety of features such as:

  • iWife. It “will take care of finding marriage prospects for you. Aggregating and analyzing data from a variety of online sources [to] match you up with only the most promising US Citizen candidates.”
  • iLawyer. “Homeland Security is Cracking down. Not to worry. With iLawyer, you can find an attorney to convince the immigration court to grant Asylum Protection. A Green Card is a finger swipe away.”
  • Weather Monitors. “The desert can get hot, and trying to cross it when it’s 120 degrees is not fun. Get up-to-date weather forecasts to pick the right time and ensure your trip to the US is comfortable and fun-packed.”
  • City Statistics. “San Antonio? Albuquerque? Tucson? San Diego? Not sure which is best? Get unemployment statistics, current average wages, cost of living expenses and more. Get the job you want, at the right wage, tax free!”

8 AMERICAN GIRL SELLS “HOMELESS GIRL” DOLL

Your child can learn that the homeless are just like real people once you spend $95 to buy her a “less fortunate” playmate for her other American Girl doll(s). The latest addition to the American Girl line of how-do-you-justify-it-ly expensive dolls is Gwen Thompson. Ms. Thompson

wheelchair and her mother Janine fell on hard times when her father lost his job; they later lost the house as they were unable to keep up payments. Soon after, Gwen’s father left them and they became homeless the fall before the start of the book’s events. Initially, Gwen’s mother has them live in their car until the winter comes; she then takes them to Sunrise House, a place for homeless women and children. Sunrise House helps them get on their feet and eventually get a new apartment.

And should you also want to teach the kid that the disabled are people too, American Girl also sells a wheelchair for $30.

9) KFC UNDERESTIMATES OPRAH’S POPULARITY

Why would you pay to have Oprah endorse your product if you didn’t know what the result be? In May the chain formerly known as Kentucky Fried Chicken paid Ms. Winfrey to discuss its new grilled chicken on her show. (This is part of an ongoing effort to rebrand KFC as someplace that serves something besides FC. By the time it’s over KFC will be Rhode Island Clam Shack. But I digress.) In addition to giving product to her audience — and how pissed were they? Other folks got a new car and they get a food experiment – viewers could go to a website and download a coupon for up to four free two-piece chicken meals with two sides and a biscuit. If there’s one thing the US loves more than Oprah, it’s Oprah and free food.

You’ll never guess what happened. OK, so maybe you will.

Several bajillion people downloaded the coupon and sprinted to the nearest KFC. Well, the food disappeared faster than a dollar bill on the floor of the Senate. As a result somefranchisees started refusing to accept the coupon, some told people the promotion was over for the day, some quickly pointed to the “while supplies last” clause, the more creative said that coupons with barcode numbers ending in “1234” are not valid. Look closely at the barcode below to see what that meant.

All this brought new meaning to the chain’s horrible new tagline: “Unthink What You Thought About KFC.”

Another chain, El Pollo Loco, moved smart and fast and sent out a twitter saying they’d accept the coupons on Mother’s Day. Soon Oprah was having to apologize for the stupidity and KFC issued rain checks to the disgruntled.

All of which goes to prove that whatever you have to pay Oprah, the ROI is REAL!

10) (tie) BLACKWATER, NIGERIA & SWINE INDUSTRY LAUNCH REBRANDING EFFORTS

  • In an attempt to change all the nasty connotations that go along with being mercenaries, Blackwater Worldwide changed its name to Xe. That’s pronounced zee, as in “zee idiots in marketing thought of it.”

Blackwater president Gary Jackson said in a memo to employees the new name reflects the change in company focus away from the business of providing private security. “The volume of changes over the past half-year have taken the company to an exciting place and we are now ready for two of the final, and most obvious changes,” Jackson said in the note.

That exciting place seems to include a lot of lawsuits.

“At international airports, in trains, in shopping malls, and almost everywhere, every Nigerian is a marked person,” Dora Akunyili, information minister and self-styled chief image maker said at the launch of the re-branding campaign this week. “We are pulled aside for questioning. We are seen as potential drug pushers or fraudsters. We are unfortunately denied the benefit of the doubt.”

  • Swine flu is no laughing matter. Especially if you’re the American Pork Association. They went into overdrive screaming about how it was hurting their sales and enlisted Iowa Sen. Tom Harkin who constantly referred to the “so-called swine flu.” Unfortunately humor trumps branding every time. Thus we got headlines like:

“We will call it Mexico flu. We won’t call it swine flu,” Deputy Health Minister Yakov Litzman, a black-garbed Orthodox Jew, told a news conference Monday, assuring the Israeli public that authorities were prepared to handle any cases.

CIO writer and friend Al Sacco came up with this: Swine flu isn’t a scary enough name. It needs a slogan, too: “Pork Plague, the (Other) White Death,” for example.

DISHONORABLE MENTIONS

AMAZON DELISTS GAY AND LESBIAN BOOKS

The online retailer blamed an “employee in France” for a “software glitch” which oddly delisted gay and lesbian themed books from its search listings. (Example: Annie Proulx’s Brokeback Mountain vanished, but not her book The Shipping News in which all the sex is hetero.)

Amazon managers found that an employee who happened to work in France had filled out a field incorrectly and more than 50,000 items got flipped over to be flagged as “adult,” the source said.

CRAIGSLIST CEO SAYS SITE HAS NO SEX RELATED ADS

“I would not describe any section of our site as ’sex related,’ ” [Craigslist CEO Jim] Buckmaster wrote in response to a series of e-mailed questions from the Globe. He acknowledged that Craigslist offers an “erotic services” section that should not include more than “legitimate escort services, sensual massage, exotic dancers, etc.,” but said that offers to exchange sexual favors for money are “strictly prohibited” and removed from the site.

SPECIAL PENGUIN OF IRONY CITATION:

THE WISCONSIN TOURISM FOUNDATION
had to change its name to the Tourism Federation of Wisconsin

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BONUS: A few other totally wrong products from the year

Goldman & Citi have Swine Flu vaccine, do you?

In the event of revolution I have some thoughts about who to put up against a wall.

Some of New York’s biggest companies, including Wall Street giants Goldman Sachs and Citigroup, received doses of swine flu vaccine for at-risk employees, drawing criticism that the hard-to-find vaccine is going first to the privileged. [emphasis added]

That’s not criticism, that’s a statement of fact.

New York city defended its actions by saying that distributing large doses of the vaccine to such businesses is "a great avenue for vaccinating people at risk." ASTERISK/FOOTNOTE: And by people at risk we mean those who are rich and have health insurance. I’m not sure what the risk is here, but I’d like to have some.

This event has revealed a previously unsuspected gift for irony at the Centers for Disease Control and Prevention. The CDC responded to this by saying any decisions that appear to send vaccine beyond high-priority groups "have the potential to undermine the credibility of the program." You think?

Goldman, Citi, et al, got the vaccine because they have their own doctors. Before getting the vaccine, doctors at these companies had to agree to only vaccinate high-risk employees. (wink, wink, nudge, nudge) And I am sure they are doing just that and ignoring any VIPs who ask for it and could have them fired.

It is nice to know that at least one of the firms who have received billions in tax dollars has spent some of that on competent PR people. While Goldman Sachs kept its 200 doses and Citigroup kept its 1,200, Morgan Stanley turned over its 1,000 doses to local hospitals after finding out they had not yet received any vaccine.

I realize our government is a corporate whorehouse, but would it mind at least pulling the shades down over the windows?

Related story:

CALGARY, Alberta (Reuters) – Senior health officials in the Canadian province of Alberta said on Wednesday they had fired an unidentified worker for giving National Hockey League players preferential access to the H1N1 flu vaccine. The controversy boiled over this week when it was revealed that players for the NHL’s Calgary Flames and their families received shots on an exclusive basis one day before the province closed public flu clinics due to a shortage of the vaccine.

Remember: Before getting the vaccine, doctors at these companies had to agree to only vaccinate high-risk employees. (wink, wink, nudge, nudge)

The stock market is an idiot

Yesterday the NYSE broke 9,000 and huzzahs and hosannas rang through the land. Redemption was at hand and all was right with the world. This was a sure sign the economy was recovering.

"What I like about the rally that we’ve seen so far is the breadth of it. It’s not really confined to a single sector. It’s broadly spread. That gives me confidence," said John Coyne, president of Philadelphia-based Brinker Capital, with $8 billion under management. "It’s been a wonderful run-up here. It’s certainly helping to restore investor confidence, given the trauma that people went through."

This all came about because of better earnings by Goldman Sachs, Ford and and the great good news that sales of previously owned homes rose 3.6 percent in June, the third consecutive monthly improvement! Never mind that Goldman’s money is based on accounting tricks and a fixed game or that the sale of homes is up because the price of homes is falling faster than Alan Greenspan’s reputation. It’s all good.

(Also never mind that UPS reported disappointing second-quarter earnings and doesn’t expect business to pick up over the next few months. Now that, ladies and gentlemen, is a reliable economic indicator.)

PAY ATTENTION:

THE STOCK MARKET AT 9,000
IS NO SMARTER THAN IT WAS AT 13,000.

There is a continuing and unfounded belief that stock markets somehow reflect reality. They don’t. They reflect the psychology of investors – whether individual or institutional. It is not a picture of what is but of what investors think will be. The Dow at 13,000 reflected nothing but the fact that too many people believed US housing prices could only move in one direction. Conversely, The Dow at 6,450 reflected people’s belief that our banking system was dead in the water.

I believe the current market numbers reflect mass denial. Denial that the US is populated by zombie banks, denial that unemployment is in double digits, denial that these profits have come because of slashed expenses – which is hardly sustainable. The rise in the Dow and other markets is more a reflection of wishful thinking and short-term profit-grabbing than it is anything else.

It could be that the above paragraph is wrong. Maybe recovery is upon us and the billions of dollars lost by banks and people in the meltdown do not need to be accounted for. Even if I am wrong about my assumptions and outlook I am right about this: The markets are no better at augury than the Romans were who relied on the flight of birds or examining the livers of sheep. If they were then we would never have crashes.

Despite the meltdown too many still think money = brains

bank-zombie-3 Turn a profit and you must be a genius, despite two successive bubbles that is still the essential view of too many.

Yesterday Goldman Sachs reported record earnings mostly because they are profiting from a government system they (or their former-for-now employees) helped create.

In the wake of Countrywide, Madoff, Bear Stearns, Enron, AIG, etc., etc., it would be nice to think a we had acquired even a slight sense of skepticism. But even many of our supposedly cynical reporters rushed to gush over Goldman winning a rigged game.

Here’s NPR’s Yuki Noguchi on All Things Considered: “Dick Bove is senior vice president of research at Rochdale Securities. He says Goldman suffered during the crisis. It shed 16 percent of its workforce in the last year. But what revived Goldman, Bove said, is the diversity of its business and its superior internal systems. So while some aspects of its business falter, the rest goes gangbusters.”

“Superior internal systems”? Is that a euphemism for no competition left standing? Nor is she alone in using effusive praise in the place of actual facts. Reuters quotes Michael Holland as saying:

What they have continued to do during the worst financial crisis in 25 years shows that they are the smartest guys in the room and, therefore, it doesn’t necessarily translate to the other people who are in the room.

“The smartest guys in the room.” Mr. Holland uses the old Enron catchphrase without a trace of irony. Here is a view from Australia:

The fact Goldman Sachs made as much money in the second quarter as it did for all of 2008 is undeniably good news. It shows markets are open for business, and given that many of its peers are dead or recovering the investment bank demonstrates the benefits of well judged risks.

The markets are open for business? Doesn’t the second half of that sentence beg a few questions of the first half?

No surprise that our elected officials are only too happy to jump on board the bandwagon. Richard Shelby, the top Republican on the Senate Banking Committee: "I’m not surprised. Goldman Sachs has a history of being well run and sometimes ahead of the others."

All this happy talk leads to a rise in the markets which is used as further evidence of the brilliance of Goldman, et al. It was only two and half years ago when Countrywide was considered one of the most esteemed companies in the US.

Anyone remember that?

Anyone?

Bueller?

Thankfully not everyone is falling for it. Over at the Washington Post, Binyamin Appelbaum even put some skepticism in the lead: “… as the decimation of its Wall Street rivals allowed the investment bank to romp across the financial landscape, buying low and selling high.” While Goldman has repaid its $10 billion government loan, Applebaum (and a few others) had the temerity to point out that the company “has not disclosed to what extent it continues to rely on other federal rescue programs, such as borrowing from the Federal Reserve.”

No surprise: Goldman Sachs – aka the Treasury Dept. – reports record earnings

The financial firm’s investment in the Obama campaign is certainly reaping impressive dividends. The company “generated nearly $750 million in revenue from equity underwriting, helping battered financial-services firms sell stock to meet new government capital requirements. The quarterly performance from equity underwriting was a company record, and surpassed even the heady days of the Internet bubble and the previous benchmark for such fees set in 2000.” The only difficulty the company faces is how to cover up the bonuses it will pay out as a result of all this.

For those keeping score at home here is the tip of the iceberg of Goldman alumnae now working for change in Washington:

  • Mary Schapiro, Chair, Securities and Exchange Commission
  • Gary Gensler, chair, Commodity Futures Trading Commission.
  • Lawrence Summers, Director of the White House’s National Economic Council
  • Mark Patterson, chief of staff to Treasury Secretary Tim Geithner’s
  • Neel Kashkari, Treasury Dept. assistant secretary for international affairs

And, no I don’t think it would have been any different had someone else been elected.