3 Costly Corporate PR Mistakes (and What You Can Learn From Them)

In the corporate world, the saying “any PR is good PR” couldn’t be further from the truth. 

Time and time again, we see large organizations shoot themselves in the foot with cringe-worthy public relations incidents, from misguided tweets to huge corporate scandals. Often, these PR blunders are exacerbated by serious business missteps that precipitate them. 

As most companies can attest, it’s not a matter of if a crisis will occur, but when. Huge brands have suffered their share of PR nightmares and paid the consequences dearly—whether it be a steep decline in sales, loss in customer loyalty, or even bankruptcy. Rather than turn a blind eye, there’s a lot to be learned from the public relations mistakes of others, including how and how not to respond in a crisis situation.

3 Corporate Public Relations Mistakes and the Lessons You Can Learn From Them

Learning from the mistakes of other organizations is great for business. The following are 3 examples of corporate PR gone wrong.

1. Silence on Cambridge Analytica backfires for Facebook

The Facebook and Cambridge Analytica scandal was a disaster. In 2018, it was revealed that the social media giant knew for three years’ plus that Cambridge Analytica had improperly accessed personal data from millions of Facebook users without consent. 

If that wasn’t bad enough, the long and deafening silence in response added to the controversy. When the scandal hit, it took Facebook CEO, Mark Zuckerberg, four days to respond to the scandal, addressing it via a post on his personal Facebook page. However, he never said he or the company was sorry. It wasn’t until a week later he took out full-page ads in three American and seven British newspapers to apologize. 

It was too late. Two days after the news of the scandal broke, Facebook’s market dropped by nearly $50 billion—the stock’s largest two-day drop ever. The Facebook CEO was also ordered to testify before Congress about the incident, and Facebook was eventually hit with a $5 billion fine for privacy violations, the largest FTC fine in the history of the country.

Takeaway Lesson #1: Silence in the middle of any PR disaster is the worst decision an organization can make. Why? Because the truth always emerges. Facebook should have immediately disclosed everything, apologized, and outlined the steps it was taking to protect user privacy moving forward. Any good crisis expert will tell you disclosure is the most effective strategy in these situations.

2. A Biotech convention features topless dancers

Strippers and work conferences are never a good mix.

In 2018, the BIO International Convention held an offsite party that featured topless dancers with their bodies painted with logos of investment firms and biotech companies sponsoring the event. It was a bonehead move by an industry that has long struggled with gender diversity problems. 

“We can talk all we want about diversity on panels and in the boardroom, but when events like this are commonplace, I just think it undermines all the progress being made by industry groups and drug companies, said Kate Strayer-Benton, Director of Strategy at Momenta Pharmaceuticals. “I just think we take giant steps backward when something like this is considered acceptable.”

The fallout from the scandal included pharma and biotech companies scrambling to distance themselves publicly, future corporate sponsors threatening to pull out of future events, and many of the affected sponsored companies claimed to have no knowledge their sponsorship package included this type of promotion.

Takeaway Lesson #2: It’s no secret industry conferences can sometimes get out of hand. The companies and sponsors associated with this infamous event should’ve known better than to associate their brand with something of this nature. And, if you do make this type of mistake, it is better to take responsibility and address it than to simply hide and deny it, especially when there is photo evidence.

3. Merck denies Vioxx posed a potential risk

There are right and wrong ways to do things—and then there’s this. 

Merck & Co.’s arthritis drug Vioxx, approved in 1999, wasn’t recalled until 2004 after concluding the popular painkiller increased the risk of heart attacks and strokes. The recall turned into a massive scandal as reports showed that Merck knew of the dangers as early as 2000, but manipulated the statistics to hide data and keep regulators in the dark. This deception ultimately caused thousands of avoidable premature deaths and over 100,000 heart attacks.

Ultimately, Merck pled guilty to the illegal promotion of Vioxx and paid $950 million in fines and penalties, including $830 million to settle a federal class-action lawsuit. The company ended up placing three full-page ads in seven high-profile newspapers and conducting numerous television appearances to help salvage their public image.

Takeaway Lesson #3: People that read ads tend to discount them in part because they know the company paid for them. According to many public relations experts, Merck should have invested in third-party endorsements and outside experts to come to the company’s defense instead of placing self-serving advertisements. Having parties with no self-interest or financial ties to the company explain the challenges of the drug discovery process and obstacles of assessing the risks versus rewards of a drug would have been more effective. 

While the remedy for a public relations crisis differs from situation to situation, the above-mentioned examples are great examples of what not to do—ever. How a company responds to a public relations nightmare can either give it the image boost it needs or severely damage the brand.

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About The Author

Nick is an accomplished content, email, and social media strategist. When he's not pouring his heart and soul into his work for Brand Buddha, you can find him on a warm beach indulging in a chilled whiskey, neat, while listening to the Gipsy Kings and applying his A/B testing magic to his tinder bio.

Nick Spence
Strategist

2019-09-11T17:18:16+00:00August 15th, 2019|

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