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Wednesday, August 15, 2012

Did The Penn State Brand Get The Death Penalty?

There are no shortage of definitions for the term “brand equity.” You probably have your favorite. This is one of mine, especially in the context of the Penn State brand: “A brand’s power derived from the goodwill and name recognition that it has earned over time, which translates into higher sales volume and higher profit margins against competing brands.”

The reason I like this particular definition when it is applied to the brand of Penn State is because of words like “goodwill” and “name recognition” and “earned over time.”

Clearly the Penn State brand, with Joe Paterno at the helm for over 45 years, wielded the power that came from goodwill while garnering name recognition, which in turn lead to higher sales and higher profit margins – that in the university world translates to an increasing level of enrollment and an increasing level of monetary donations from alumni. All of which makes the competing brands green with envy for sure.

At its peak, which for all intents and purposes was anytime right up until the world found out about Jerry Sandusky – the Penn State brand possessed a tremendous amount of brand equity.


And while in some eyes the lines may have been blurred with many wondering “Is it the Joe Paterno brand?” or “Is it the Penn State brand?” – the fact remains that the brand was an extremely powerful one and one that surely did not achieve its massive cache of brand equity overnight.

Yet as we now know, this once seemingly invincible and impenetrable brand, has been reduced to a mere shell of its former self.

A History Lesson
We all know the line about history and what can happen when one fails to learn from it. And history is replete with brands who, for one reason or another, have failed or fallen victim to issues – some not even of their own doing, which resulted in severe loss in brand equity.
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  • In 1982 Tylenol suffered a massive blow to its brand equity when seven people died after taking Extra Strength Tylenol laced with cyanide. After recalling 31 million bottles and losing more than $100 million, Tylenol rebounded and recovered to eventually regain 100% of the market share it had lost.
  • In 2004 Martha Stewart was found guilty of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators. Needless to say her brand equity and all its various offshoots, took a major hit. Her brand recovered eventually, her daytime TV show is in its sixth season, and this fall she will have a new cooking show on PBS.
  • On July 4, 2011, revelations surfaced that News of the World – owned by Rupert Murdoch’s powerful News Corporation, hacked into voicemail messages of murdered British schoolgirl Milly Dowler. Just three days later it was announced that News of the World would be shut down.
These are just three examples of major brands suffering severe damage to their hard-earned-over-time brand equity. Each of the brands recovered – well except in the case of News of the World but obviously Rupert Murdoch’s News Corp brand is alive and kicking despite the closing of News of the World.

But none of these brands needed to recover from the kind of damage that is being inflicted on the Penn State brand. The reason being none of these brands’ fall from grace, if you will, involved the sexual abuse of children and subsequent cover up by the very people who A) built the brand and B) were entrusted with maintaining its goodwill.

How can the Penn State brand possibly survive this unprecedented – a word that’s used a lot in talking about Penn State these days, loss of brand equity?
In the case of Tylenol for example, the problem was identified and corrected as fast as humanly possible. Yes it took a great deal of time to reestablish trust with the public but as you saw, it did happen and can happen again for Penn State.

Or can it?

What Does The Future Hold For The Penn State Brand?
As I sit here today I honestly do not know if the public will ever regain a level of trust with the Penn State brand. It’s quite possible I would have said the same thing back in 1982 about Tylenol. But I was only 17 and had a can of Spam for a brain, so.

But right now, do I think the Penn State brand can ever recover, I honestly don’t know.

Much of my uncertainty has to do with what is still emanating from Happy  Valley. There are still far too many brand advocates/brand ambassadors of the Penn State brand still steadfastly refusing to admit something went terribly and tragically wrong.

There are far too many who are entrusted with maintaining standards of the brand – the board of trustees for example, who refuse to admit to the public, much less themselves, that such atrocities were being committed right under their very noses.

And if those entrusted with the brand’s health and future cannot first bring themselves to this fact, how can the brand ever hope to rebound and recover? If they don’t think anything went wrong in the first place, why would they ever think they need to repair and restore the brand?

Joe McDonough, VP/Executive Creative Director at Masterminds, a full-service agency with a focus on brand integration, says it comes down to brands realizing the responsibility that comes with achieving such lofty brand equity status.

“The more respected, more credible the brand, the higher the stakes and the more critical it is to treat the public trust as the cornerstone of your brand’s foundation,” says McDonough.

McDonough, who has worked on such big name brands as MGM and Pinnacle Entertainment, says the keepers of the Penn State brand made a fatal mistake in the face of the crisis.

“When the powers-that-be decided to go into damage control mode instead of pursuing the ethical, or in this case – lawful position, the stakes were raised to double or nothing,” he added. “Imagine if PSU had actually gotten away with covering this up?”

Crisis management consultant Dr. Ken J. Brumfield says the problems transcend the playing field. “It’s not the football culture, but rather the senior executive team culture that got them here,” says Brumfield, author of the book “S.E.T. CULTURE: What Every Organization Needs to Know Before Crises Occur.”

What Can Brands Learn From Penn State?

According to Brumfield there are three distinct things the leaders of Penn State need to do to rebuild its tarnished brand.
  • Change the culture from the top down
  • Make better decisions
  • Seek outside help
Of course these are a lot easier said than done.

Changing the culture means first admitting the culture was bad in the first place. As I mentioned previously, I’m not so sure the leaders of Penn State would openly admit their culture was bad.

As for making better decisions, that of course comes down to who is making the decisions in the first place. With all but one of the board of trustees still in place, if not power, making better decisions than those previously made may not be so easy.

And as for seeking outside help, setting up advisory boards, etc. – that too will depend on if the leaders of Penn State deem such an action necessary and warranted.

For his part, McDonough believes the best thing a brand can learn from Penn State is that despite all the years one spends building trust with the consumer, it can all come apart in the blink of an eye.

“The public’s trust is hard won and easily lost. In this day and age it’s the public who bestows the value of your brand upon you – they assign which rung on the brand consideration ladder you grasp – but the hold is tenuous and needs only the slightest negative momentum to send you tumbling down,” he says.

“Now that ‘all media is social’ and every conversation can become a public forum that trends in the millions for even trivial snippets of reality TV flotsam – the need for stewards of brands of every scale to maintain actual credibility – not just the veiled appearance of it, is paramount.”

Source: Live Science 

Named one of the Top 100 Influencers In Social Media (#41) by Social Technology Review and a Top 50 Social Media Blogger by Kred, Steve Olenski is a freelance copywriter/blogger currently looking for full-time work. He has worked on some of the biggest brands in the world and has over 20 years experience in advertising and marketing. He lives in Philly and can be reached via email,TwitterLinkedIn or his website.

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Sunday, August 5, 2012

CEOs On Social Media: Do As I Say, Not As I Do


As a parent I of course have tried to instill a set of rules for my children to adhere to as a means to teach them as they move along the growth ladder. All parents instill their own set of rules and values and so on to help guide the instruct their children, right?
Well let’s say that when my kids were younger, say around 3, I hung up a sign in the kitchen that read: “Don’t Touch A Hot Stove.” I made the sign big, bright and bold so they could not miss it every time they walked into the kitchen. And they followed the rule and never touched the hot stove.
Now let’s say one time they walked into the kitchen and there I was touching the hot stove, burning my fingers, screaming in pain.
“Daddy, you told us to never touch the hot stove. Why did you touch it?”
“Um, well… it’s different for grown ups.”
“Oh, I see… you want me to get mommy so she can take you to the hospital?”
While this may not be the best analogy the point is very clear that when it comes to social media and the use thereof, far too many CEOs are telling their employees – and the rest of the world for that matter that they know their company needs to be “doing it” yet simply do not practice what they preach.
What CEOs Are Saying To Their “Kids”
“As a percentage of overall marketing budgets, spending on social media is expected to increase 17.5% over the next five years.” That comes directly from a study conducted last year by Duke University’s Fuqua School of Business of nearly 250 top executives.
From an infographic put out by MBAPrograms.com which reveals recent findings on how corporations are using social media. Note, how “corporations” are using social media, not those running them.
  • 94% of corporations are using social media in one way, shape or form
  • 85% credit social media for providing increased exposure to their business
  • 74% indicated an increase in website traffic thanks to as little as 6 hours a week on social media
  • 58% say it’s use for lead generation & developing brand loyalty
  • 65% say social media is key to learning about their competition
As to their preferred social media networks…


No great surprise there.
Ok, this all looks great, right? CEO’s are investing more in social media and corporations are “getting” social media and realizing that is not a fad, is here to stay and to stay alive in today’s world, one better “get” social media.
What CEOs Are Actually Doing
Not long ago I wrote an article on Josh James, his company Domo and the now infamous #domosocial experiment. Josh is the living embodiment of a CEO who “gets” social media so I definitely urge you to read about his groundbreaking experiment.
Josh and his company recently teamed up with CEO.com to conduct a survey on Fortune 500 CEOs and their use of social media. Josh wrote about the findings of the survey which clearly revealed that a very large number of CEOs are “touching the hot stove” as 70%, yes 70% of all Fortune 500 CEOs have no presence of any kind on social media.
“You kids get to getting on Facebook, Twitter and Pinterest and all that good stuff. I’m far too busy to spend my time engaging with the very people who keep us in business.”
The obligatory infographic from the Domo and CEO.com survey:

It really is mind-blowing and in fact quite hypocritical when you get right down to it when you consider the fact that CEOs openly acknowledge the importance of the use of social media for their companies yet don’t see the need to be socially active themselves.
Yes, I saw the stat that read the number of CEOs using social media is expected to grow to 57% from the current 16% in 3 – 5 years but I will believe that when I see it. And by the looks of things, I won’t be seeing in 3 , 5, 7 or even 10 years. Sorry, not buying it.
I want to leave you with quotes from Josh’s article and also one from David K. Williams who recently penned CEOs and Social Media — How Much is Too Much?
“It is my hope that CEOs come to believe in the transformative power of social media.  But if they persist in lagging far behind the general population in social media participation and not delivering value to the shareholders that is there for the taking, they may not be CEOs for much longer.”
From David’s article:
“If we haven’t convinced you yet (of the importance of social media), consider these two results from the BRANDFog 2012 CEO Survey as the final clincher: More than 82% of respondents are likely or much more likely to trust a company whose CEO and team engage in social media. And an amazing 77% of respondents are likely or much more willing to buy from a company whose mission and values are defined through their leaderships’ involvement in social media.
The conclusion is clear: Any leader who isn’t engaged in social media today is like the leaders of 50 years ago who insisted on sending a telegram instead of dialing a phone.”
'Til next time,



Source: Forbes
Named one of the Top 100 Influencers In Social Media (#41) by Social Technology Review and a Top 50 Social Media Blogger by Kred, Steve Olenski is a freelance copywriter/blogger currently looking for full-time work. He has worked on some of the biggest brands in the world and has over 20 years experience in advertising and marketing. He lives in Philly and can be reached via email,TwitterLinkedIn or his website.

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