Category: In the News

Recording Academy Responds to Reports CEO was “Ousted”

Deborah Dugan, the now-former president of the Recording Academy, has been fired after the organization which hosts The Grammys conducted what they called “two exhaustive, costly, independent investigations” into allegations made by Dugan.

Each investigation followed up on accusations made by Dugan about both the Academy’s culture and nomination process, as well as separate allegations made by Dugan that she was sexually harassed. Dugan insisted that the voting process for some top awards was “rigged,” insinuating that the process was unfair, casting aspersions on the winners of some of music’s most prestigious awards.

In addition to finding no substance to the allegations made by Dugan, the independent review stated that there was evidence of Dugan’s “consistent management deficiencies and failures…” though reports have said no specific examples were listed.

All of this touched off after Dugan was put on administrative leave early in 2020, after a complaint was lodged about her interactions with a longtime Academy employee. Dugan filed a discrimination complaint, adding an accusation that attorneys for the Academy “acted inappropriately” during a business meeting.

After the firing, Dugan’s representatives fired back with a prepared statement which read, in part: “The decision is despicable and, in due course, the Academy, its leadership and its attorneys will be held accountable…”

The response to this claim was scathing, with Academy officials sending out a clear message that Dugan would not be receiving any kind of settlement for her alleged grievances: “We could not reward her with a lucrative settlement and thereby set a precedent that behavior like hers has no consequence… Our members and employees, and the entire music industry deserve better than that…”

Given the sensitive nature of allegations such as those Dugan made, especially given the kinds of reactions music fans are likely to have on social media, this kind of emphatic negation and strong stance must be accompanied by a very clear message that the organization behind the accused did a thorough investigation, with clear indicators who is telling the truth.

This is especially key given the ongoing criticism of both the music industry and awards shows. Many fans already have strong opinions, making them liable to believe one side or the other, based on those views. These strong opinions often cause fans to provide digital megaphones for narratives, spreading them, loudly and enthusiastically, across social media and other digital platforms.

All parties involved should understand that, with digital PR, very few things are settled. Nearly everything is an ongoing conversation, even if all the facts are “out there” and readily available. People believe what they believe, and they will strongly defend that position. Parties involved in public disagreements that end up online should understand this going in and prepare their messages and counter-messages accordingly.

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Players Respond to Cheating Scandal

Ask the average baseball fan these days about the Houston Astros and, if they’re not in east Texas, expect a less than cordial response. Ask sports media, and many would say the 2017 World Series champions should be stripped of their title, because they effectively broke baseball, and those are the comments that are fit to print.

Others are being more direct and less tactful. Yankees superstar Giancarlo Stanton said if he was cheating like the Astros he “probably would have hit 80-plus home runs.” Stanton, along with his New York teammate Aaron Judge have been very vocal about their belief that the Astros should have their title rescinded, adding that he, like Judge, believes the cheating continued well into the 2019 season.

After an investigation, Major League Baseball concluded that the Astros cheated during both their World Series run as well as the follow up year, where they failed to defend their championship. Stanton told the media: “It was clear-cut, which means (the title) should be taken away. If you cheat, you (shouldn’t) even be in the playoffs…”

However, Houston is firing back through team owner Jim Crane, who held a news conference last week arguing that the sign stealing did not offer his team much of a discernible advantage. Sports media, fans, and other players pushed back, arguing that the results of those playoff series in 2017 show the results of cheating. The Astros beat the Yankees in seven games to win the ALCS, before edging the Dodgers in the Series.

When the cheating scandal was announced, Houston fired suspended manager AJ Hinch and GM Jeff Luhnow. This move indicates an understanding in Houston that MLB fans and others looking on don’t plan to let this go.

After MLB Commissioner Rob Manfred, who had his own PR issues last week, said he didn’t think Houston cheated last year, Stanton and other players fired back. Stanton said he didn’t think the Astros stopped cheating until they were caught, implying in his opinion that they cheated last year as well.

Stanton added his opinion – one echoed by many fans and sports media – that Astros players should have been punished, “I don’t think the penalties were harsh enough player-wise… At the end of the day, the (lack of punishment) gives more incentive (to cheat) if you’re not going to punish the players.”

Some Astros players, like former Houston pitcher Gerrit Cole, who now plays for Stanton’s Yankees, have said they were unaware that any cheating was happening while they played for Houston. Cole says he understands why some players are speaking out, and that it’s not his place to contradict their opinion: “People handle this the way they want to… I’m not going to tell anybody how to think…”

While many other players feel the same way, fans and media are less inclined to be so circumspect. MLB has a serious PR problem that isn’t going away, and officials don’t seem to have decided yet what to do about it. MLB should take a lesson from the NFL: inaction in the face of a growing PR crisis will not make the problem disappear.

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How Digital Marketing Strategy Creates Consumer Engagement

As social media and Amazon searches continue to consume more market share, consumer shopping and buying habits are shifting right along with this trend. This is leading to a more fragmented marketplace, with people breaking into – and increasingly looking for – specific niches, rather than mass marketing products.

Because of this, brand managers need to reconsider what they’re doing about digital marketing in order to better engage with today’s consumer. Developing a new and dedicated digital marketing campaign is a must for any marketer interested in maintaining or building their customer base as consumer habits continue to shift. Here are a few reasons why this is important:

Digital Marketing Reveals Customers

Getting to know a customer really is and what they’re really looking for is easier than ever before. With machine learning technology, advanced online analytics, and habit-based search results, marketers have the opportunity to meet their customers where and when they are looking for something specific. Where some tools, like Google Analytics, might tell a brand manager the number of visitors and when they visited, these methods will not describe the consumer’s mood or inclinations. Modern digital marketing tools can offer much more detailed information.

Flexible Connection Options

One of the best reasons to consider developing a targeted digital marketing strategy is the plethora of connection methods available to the marketer. Email marketing, social ads, banners, content marketing, multimedia social posts are just a few of the ways savvy marketers are creating a balance, multi-pronged approach to digital marketing, with multiple consumer connection points.

Capturing Lost Customers

Many brands represented primarily or entirely by brick-and-mortar stores that depend on traditional marketing means are losing customers and revenue at an alarming pace. Digital marketing allows these brands to reconnect with those customers, while also reaching new prospects in the process.

Robust and Detailed Tracking

Digital marketing strategies should include a robust and detailed customer tracking apparatus. Programs allow marketers to monitor which ads are working, when, and with whom, allowing brand managers to revise or edit their strategy to target specific consumers in a time and place where they are most likely to respond.

Direct Connection

By using social media as part of a digital marketing strategy, brands can connect directly with their consumer market, to comment on a specific issue, respond to a concern or comment, promote a new product, or build a relationship with those consumers that will lead to greater engagement and more sales.

The best part is that, in many cases, all of this can be accomplished, getting great results with a smaller budget than some traditional mass marketing campaigns.

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Starbucks Agrees to Pay Restitution

Starbucks has an up and down relationship with the media and consumers on social media. From positive interactions to overstepping baristas to Christmas cups, the brand seems to find a way into the headlines, good or bad, with some frequency. Occasionally, though, the news is more serious than a red cup or a hapless employee. This is one of those crisis cases.

Various media reports announced recently that Starbucks Corp has agreed to “pay restitution and accept greater oversight” as part of a settlement in response to allegations that the company “illegally required New York City employees to find substitutes when they needed to use sick leave.”

Starbucks has since changed its sick leave policy, but that doesn’t mean the positioning messages have stopped or that the company should just ignore what’s being published or broadcast subsequent to the settlement. A sampling of media reporting on this topic reveals that the company had to pay at least $176,000 in restitution to employees and to post “educational posters” about the new policy in all NYC stores. The company has six months to prove to regulators that it is in compliance in all 8,000 NYC locations.

As of December 2019, Starbucks is not talking to the media about this issue, other than to say they will comply with the terms of the settlement, so there’s very little messaging coming from their side. There’s merit to that position. The company gains nothing by extending this story into another news cycle. They had a policy. It’s been changed. The end. From their perspective, what else needs to be said? Anything more, and you simply risk drawing more attention to an issue most consumers aren’t paying any attention to. No up-side there, so terse acknowledgement with a forward focus is the right move.

That could change, though. In the event that an advocacy group or an influencer grabs hold of this issue and pushes a negative narrative of Starbucks as “unfair” or “insensitive” to employees, the company may need to shift its stance in response. That calls for proactive consumer PR.

Starbucks should not assume this issue will just fade away, though it does seem likely. The brand needs to be prepared for the issue to resurface, and to be ready for a position where they’re not in control of the narrative being pushed. The goal, then, is two-fold. First, to offer a counter-narrative, and second, to try to gain some control of the prevailing message in the marketplace. The purpose of this planning is not to go on the offensive, but to be immediately prepared to respond, so precious time isn’t lost figuring out how to answer a negative message in real time.

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NFL Taking Hits Over Officiating

Since the disastrous Saints-Rams NFC Championship no-call last year, NFL officiating has been under intense scrutiny. With new technology allowing fans at home and in the stands to clearly and easily see where refs make mistakes, the pressure was on. And the officials are not making it any better on themselves with more than a few high-profile blown calls throughout this season. Some legitimately could be said to have changed the outcomes of games.

The league says it may look into a “rules adjustment,” but they already did that. After the NFC Championship debacle, the league gave coaches the chance to challenge pass interference calls, or the lack thereof. This change hasn’t had much effect on the perceived issues that both commentators and fans are griping about.

The issues, according to both fans and critics, have more to do with the inconsistencies in how plays are called, rather than misses in big moments. Sure, one egregious call might get oversized airtime, but pundits are discussing officiating nearly every day. As are fans, and the conversation has done well beyond the standard griping about the refs.

Speaking to the media, Atlanta Falcons president Rich McKay said, “There’s no question there’s been angst… I’ve felt (it). With our team, I’ve felt the angst of others… But it’s a new rule, a big change… something we haven’t done before. I don’t want to prejudge the outcome.”

That, unfortunately, is what many critics are saying is the issue. Speaking candidly on ESPN’s Get Up program, analyst Dan Orlovsky said the league definitely does not want the controversy over the officiating to follow play into the postseason. He said fans are fed up, and even pundits are tired of talking about it week in and week out.

He’s not alone in this estimation. Twitter feeds are full of complaints about officiating, specifically the inconsistency in applying the rules related to pass interference, use of helmets, and coaches’ challenges.

McKay and others say they are “gathering information” and “looking into” the issue, but those words are not assuaging the frustration among fans, players, and coaches. Some don’t understand what’s being called and why, others are frustrated at what’s not being called… and everyone seems to be frustrated at how many calls are creating scenarios that impact games, week after week.

If this continues, the league could face losing some of the fan goodwill it’s enjoying thanks to lights out play from marquee players and role players alike, as well as unexpected performances by players no one had heard of before they stepped on the field. This could be the league’s year to surge after a few years embroiled in controversy, but, at least at this point, that isn’t happening.

Ronn Torossian is the CEO and Founder of 5W Public Relations. 5W PR is a leading digital pr and influencer marketing agency.

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Can GameStop Survive a Shifting Market?

Streaming media has slowly transformed multiple different industries. It began with music. As the iPod sliced away at market share, retailers and production companies tried to ignore the interloper. Apple didn’t stop, and, in the space of a decade, the entire industry was transformed.

The example was plain to see, as were the trends, but many booksellers did not pay much attention. When the Kindle came out, they scoffed. Then, stores started closing, as Amazon book sales and digital book sales exploded. People still buy and love “real” books, there are still big box booksellers and independent bookshops, but the market potential shrank considerably.

It was only a matter of time before the video game market followed suit. Like movies, video games followed a pretty basic consumer distribution model: you could buy games or rent games, buy consoles or rent them. Because of that, game resale stores became big business. Now, though, one of the biggest video game resellers, GameStop, is asking some of the same questions music stores were asking a decade ago. When not enough people are coming in, what do we do next?

GameStop is telling investors to expect the company to continue its current sales decline, and the company is projecting a loss of $83 million in the third quarter alone. CEO George Sherman is reportedly blaming weak sales on people waiting for the holiday releases of new game consoles, such as the PlayStation and Xbox. Others are saying that’s only part of the problem; that the real issue goes much deeper. They are likely correct.

The simple fact is that consumer habits are shifting. More people are playing online, more people are streaming games, and fewer people are buying games outright. With fewer people buying games, there are fewer resale games available. And, when consoles are not upgrading every year or two, there’s much less reason for even the most dedicated gamers to go shopping for something new.

This isn’t speculation. GameStop stock is down about 60 percent this year, and executives don’t expect a rebound any time soon. If they’re waiting for the release of what GameStop leadership called “new and innovative” consoles late next year, they could be playing a very dangerous waiting game. Who knows what the next year will offer in the way of streaming content.

Will GameStop even be relevant this time next year, or will the company have waited too long to reinvent the brand for the current market realities? Time will tell, but the smart money says the company can’t wait that long. They need a new, connective, and relevant message. And they need it now.

Ronn Torossian is the CEO and Founder of 5W Public Relations. 5W PR is a leading digital pr and influencer marketing agency.

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GM Hoping to Make a Big Splash with First Electric Pickup

When Tesla announced it was working on a fully-electric pickup, many people laughed. Too soon, they said. Unfeasible, others agreed. Tesla, of course, soldiered on in their efforts, which do not have a scheduled release date. One company, though, has jumped ahead of the competition, announcing plans to release the first American fully electric truck by the fall of 2021. That company is General Motors.

The announcement was met with some skepticism among the auto crowd. Could a fully electric pickup really meet the demands of the tough truck market? GM’s CEO Mary Barra tried to quell fears and misgivings by banking on GM’s reputation for making strong, capable pickups:

“General Motors understands truck buyers and … people who are new coming into the truck market…” several media outlets reported Barra saying, “It will be a very capable truck, I’m pretty excited about it.”

This statement comes on the heels of a report, last month, by Reuters, that GM has an entire line of pickups, light duty trucks, and SUVs in the works. The new lineup is expected to be manufactured at GM’s Detroit-Hamtramck plant in 2021, according to reports.

Pickups are one of the most profitable segments for all automakers in the world, so the first company to come out with capable, reliable fully-electric truck is expected to have a corner on a very lucrative market. GM hopes to get out ahead of the competition and carve out a strong market share.

But they are not alone. Ford is in the race as well, promising an all-electric F-series truck sometime in 2021 as well. As GM’s chief rival in the American market, especially for pickups, Ford would love to be able to step in and steal some of GM’s thunder in this race to see who can get a fully-electric truck to the American market fastest.

And, with two big names dropping dates and deadlines, does Tesla have anything new to add? Not in the way of a timeline, no. Elon Musk said his company’s truck would be more like a futuristic “armored personnel carrier” than a traditional pickup truck. And, while that promise definitely earned headlines, that message didn’t resonate as much as the promise of an industry-flipping product with a strong deadline. Now, the onus is on both GM and Ford to hit their deadline… or risk their headline grabbing messages getting lost in a sea of questions and doubts.

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Elon Musk in Court Over ‘Pedo Guy’ Tweets

In July of 2018, British diver Vernon Unsworth took part in a daring, life-threatening rescue of 12 boys and their soccer coach, all of whom had been trapped inside a quickly flooding cave system. It could have been one of the purest and best “good news” stories of 2018; for most people, it certainly was.

But there was one aspect of the round-the-clock news about the story that went off the rails, thanks to comments made by Unsworth, and the response from billionaire Elon Musk, who famously offered to assist with rescue efforts. That offer of assistance included the use of a mini-submersible.

While some involved in the rescue expressed appreciation and politely said “no, that won’t work for this situation,” Unsworth went on CNN and called Musk’s offer a “publicity stunt” rather than a genuine offer of assistance, adding that Musk could “stick his submarine where it hurts…”

Those comments did not sit well with Musk, who took to Twitter to both defend himself and to castigate Unsworth. During one part of his rant, Musk referred to Unsworth as ‘pedo guy’… and that brings us up to the present, when Musk appeared in court to testify in a defamation hearing in which he has been accused of harming Unsworth’s public reputation.

Headed into court, Musk had nothing to say to the swarm of reporters waiting for a soundbite. Instead, he let his testimony do the talking. Musk opened by apologizing for the comment, adding that he reacted to an “unprovoked” insult from Unsworth. Musk said he did not believe Unsworth was speaking literally when he suggested what Musk could do with his sub, just as he was not speaking literally when he reacted by insulting Unsworth.

If you’re a member of the general public sitting back watching two high-profile guys have a go at each other on Twitter, all of this seems a bit silly. However, from both a PR and a legal standpoint, this issue has some teeth.

First, the legal: Unsworth is seeking compensatory and punitive damages from Musk. This case would have been news just because it’s Musk. Which is one of the key points in Unsworth’s argument, that Musk’s profile has the real potential to do real harm to a person’s reputation.  Is there a “second” point?

From a PR perspective, this case is guaranteed to get press, again, because it’s Musk. However, it also includes a person most of the world considers a hero. And now that “hero” tag may have been tainted. Unsworth may or may not have needed to respond the way he did in order to protect his reputation, but he’s chosen to be proactive on the issue, attempting to take some control of a message that’s guaranteed to be told, with or without his input. Whether or not the case goes his way, at least now, he’s had a say in the conversation.

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Uber CEO Responds to Criticism … Again

Most of the world believes Saudi journalist Jamal Khashoggi was murdered, though how, why, and by whom remains an open question and occasion for strident debate in some circles. The controversy alone should warn people off, especially if they’re not ready to face a firehose of very public rage. The fact that there’s an official version of events that most people tend to take at face value, should give people yet another reason to double-down on caution related to this issue. Especially, once again, if your brand has nothing to do with the tragedy or the controversy related to a murdered journalist. Enter Uber CEO Dara Khosrowshahi…

During an interview with Axios media, the Uber CEO appeared to defend the Saudi government, whose officials are blamed for Khashoggi’s murder. During the interview, Khosrowshahi said, “I think that (the government) said they made a mistake…” The Uber CEO then tried to clarify by adding, “It’s a serious mistake. We’ve made mistakes too, with self-driving, and we stopped driving and we’re recovering from that mistake… So, I think that people make mistakes, it doesn’t mean that they can never be forgiven.”

From a PR perspective, this statement is a mess wrapped in a disaster.

  1. First, offering an opinion on the issue at all in a press interview has no up-side. It doesn’t help Uber, and it can only cause controversy for the brand, at the very least.
  2. Second, Khosrowshahi’s statements were viewed by many as downplaying the nature of Khashoggi’s murder, comparing it to a traffic accident.
  3. And, third, in an effort to somehow offer empathy, the Uber CEO chose to directly compare the murder of a journalist with the worst moment in his company’s history, when a malfunctioning autonomous vehicle hit and killed a pedestrian.

At what point does reminding a live media audience of the worst moment in your company’s history equal positive PR? And, at what point does comparing that unfortunate accident with the intentional murder of a journalist make any sense whatsoever?

Those are among the many questions Uber and its CEO are currently being asked by both consumer media and countless market analysts who can’t fathom why Uber’s leadership continues to create unnecessary PR firestorms.

Critics have said the comments were made as an intentional financial move, because the Saudi sovereign wealth fund remains a major Uber stakeholder, and its managing director has a seat on Uber’s board of directors. But those theories were put to rest last week when Khosrowshahi went on Twitter to apologize for the comments: “I said something in the moment I don’t believe… Our investors have long known my views and I’m sorry I wasn’t clear…”

And, while that apology might have stifled one conspiracy theory, it didn’t stop the blowback. Many consumers felt the apology was simply not good enough. Both “boycottuber” and “deleteuber” hashtags started trending on social media, while, yet again, Uber’s chief rival, Lyft, sat back and collected new customers thanks to errant comments from another Uber Chief Executive.

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Brands are Using Loyalty to Cut Acquisition Costs

The ongoing battle among brands today is the one raging over customer loyalty. The environment of digital marketing is shifting, and this causes competition in various forms. As more brands become aware of the importance of building a loyal customer base — while also keeping their new customer acquisition costs low — some creativity is needed to entice those customers not only to stay loyal, but to bring more people into the fold via referrals.

This challenge has led to an increase in loyalty and rewards programs. For example, the recently announced Target Circle is one of the latest iterations of loyalty programs promising perks and benefits for those who choose to spend their money in Target stores. Another way brands are trying to find a permanent home in a customer’s rotation of needs is to offer increasingly more convenient options such as low-cost or free home delivery of groceries.

And other brands have built loyalty on a referral model, understanding that the CPA goes down exponentially when customers are referring in new business on their own. By incentivizing the referral process — offering exclusive discount codes, free gifts for a certain number of referrals,  etc. — brands can essentially recruit existing customers as salespeople eager to share the value of the product. This reduces the CPA to virtually zero and allows for current customers to act somewhat as influencers. This creates a reliable system for referrals, as customers are more likely to convert their friends than a standard ad might.

Building out a strong loyalty and referral program can accomplish many goals on a marketer’s list. Loyalty is a strong currency in today’s marketing environment, but the program must be strong with robust perks and incentives for staying in. A strong loyalty program will also encourage organic referrals from happy customers who feel strongly enough about something that they’ll promote it on their own.

A referral program can also bolster the sense of community associated with a brand. This is another up and coming metric that is beginning to hold more value for businesses. Community is something that consumers actively seek out. Whether it’s the dedicated Facebook page for the New York Times Cooking section or a group of exclusive club members for the Morning Brew who have referred in the most new subscribers, consumers love to gather in places where like-minded individuals exist.

This sort of environment creates a more organic feel of promoting products and services that accomplishes more than a paid search ad or a television ad. It is good to remember that consumers are more trusting of the opinions of people they know. Not even a customized ad can have as much converting power as the endorsement of a trusted friend or acquaintance.

Businesses looking to reduce their acquisition costs while also bolstering consumer loyalty would do well to take a page out of the playbook of companies such as Target, The Skimm, or Morning Brew. Brands such as these that have capitalized on the fierce brand loyalty of their customers will find new avenues opening up that lead to increased conversions and happy, satisfied customers.

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