Saturday, January 30, 2021

The Robinhood PR Disaster - What They Must Do To Make It Right [Abbott Media Group]


When the lists of 2021 PR disasters in business is written next January, Number One on that list will likely be the Robinhood app debacle of this week that left their reputation in tatters.

THE SITUATION:
The Robinhood app, which allows average investors access to the stock market, buying trades without fees, abruptly froze users' ability to buy shares of some hot-selling stocks, among them GameStop and AMC.

Of course, they were "hot" because the internet, specifically the Reddit online chat boards, had made them so, deciding that these stocks - and they companies they represent - shouldn't actually fail (as the hedge funds had decided they should, and were "shorting" their stock in anticipation of their immanent deaths.)

This caused both stocks to rise "to the moon," as many on Twitter put it, and cost the hedge funds BILLIONS because their bets now were suddenly wrong.

Enter Robinhood, which had tweeted early on in its life, "Let the people trade." That slogan became one of bitter irony when, on Wednesday, upon rumored pressure from Wall Street hedge funds and even the Securities and Exchange Commission, they froze the ability to buy further stocks in these two hot properties (but still allowed sales.)

They posted a message which said, in part, "In light of current market volatility, we are restricting transactions for certain securities to position closing only, including $AMC and $GME."

While other brokerage firms reportedly did the same - including TD Ameritrade and other big names - Robinhood received the brunt of the online firestorm that soon erupted. And in the age of Twitter, the reaction was a tsunami of anger and criticism.

What Chris Buskirk, a contributing writer for the New York Times tweeted was typical:

"$AMC was struggling due to COVID lockdowns. Hedge funds shorted the stock to force bankruptcy.

Small investors saw an opportunity & bought $AMC driving it’s price up. $AMC raised $900 million, saved the business & 1000s of jobs. But they’re the bad guys for saving the company?"

One investor said, "There is no free market. There is only a manipulated market that is built to enrich hedge funds. The "capitalists" on Wall Street are being exposed as a bunch of cry babies who aren't actually that smart. If they were so good, why not compete in the free market??"

The cynicism did not end with investors. Politicians were also    quick to express outrage at Robinhood.

New York Democratic congresswoman Alexandria Ocasio-Cortez called for hearings in Congress about Robinhood and its actions. 

"This is unacceptable. We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit. As a member of the Financial Services Cmte, I’d support a hearing if necessary."

U.S. Senator Ted Cruz (R- Texas) agreed with the liberal Democrat, tweeting simply, "Fully agree." (Prompting an outburst from Occasio-Cortez, in which she said she would work with other Republicans but not with Cruz, who allegedly, "almost had me murdered three weeks ago." During the Capitol Hill riot.) Whatever.

Republican Congressman Madison Cawthorn was also blunt, tweeting:

"Part of Free Market Capitalism is having a Free Market. Wall Street is pressed because normal, working Americans outplayed them."

Regardless of party differences, this rare demonstration of bipartisanship seems to indicate they will at least be some hearings in the app's future.

For its part, Robinhood tried to stop the bleeding, posting a policy U-turn Thursday afternoon (4:15 pm ET) posting on Twitter and on the app that they would restore the ability to both buy and sell these hot stocks. Vlad Tenev, the Bulgarian entrepreneur who co-founded Robin Hood, tweeting:

"Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and make adjustments as needed."

But things continued to spiral out of control for Robinhood. On Thursday, a class action lawsuit was filed in federal court (the Southern District Court of New York) against Robinhood on behalf of its clients, legitimately claiming loss a millions of dollars due to the inability to buy these stocks as they rose drastically on Wednesday morning, and while hedge funds were not similarly restricted.

Late Friday, Robinhood kept digging a hole for itself, releasing a list of 50 stocks for which they were restricting buys. This prompted the investment site  Seeking Alpha to predict the new restrictions "could lead to big exodus" from the app.

As Inc. columnist Jason Aten wrote: "It takes a long time to build a brand, but not long at all to destroy it. In Robinhood's case, it took less than a day."

PR SOLUTIONS:
So, how does Robinhood regain its reputation as a fighter for the little guy investor? Or can it?

I believe it can, but it must demonstrate in the coming months that it did not respond to pressure from Wall Street, or even the White House which many speculated had occurred.

It has already begun the work it must do, including dispelling rumors that it acted to stop trading on behalf of a hedge fund, Citadel - something which would likely mean the death of the app, if true.

Tenev tweeted,

"As a brokerage firm, Robinhood has many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. 

To be clear, this decision was not made on the direction of any market maker we route to or other market participants."

(The California-based Sequoia hedge fund sought to squash such rumors late Thursday afternoon, tweeting, "Sequoia did not pressure Robinhood to halt the trading of any stocks. This rumor is completely false.")

Over the next few weeks and months, Robinhood needs to act decisively and speak out clearly to restore confidence and trust in its product, and, frankly, the system it works with. Speaking for an entire market is definitely a tall order, and usually not one public relations would need to take on.

But given the tremendous lack of trust that has accrued in such a short period of time (just a few days!) It's one the app must take on.

Hopefully they have a PR team that is instructing the Robinhood application's board that it cannot hide behind technicalities or even the SEC, and preparing them for the Congressional grilling that surely awaits them.

The Robinhood app must take strong, clear actions, and their PR team must then explain those actions in a confident way to investors and customers alike. 

Then, maybe six months from now, the Robinhood app just might still exist.

Tuesday, December 15, 2020

Petco's Year-End PR Disaster: Killing Their Cat And Dog Logo

If you're one of the largest pet supply retailers in the USA, how do you take off all your pet owner customers? Removing the beloved cat and dog characters from your stores logo is probably the best way. And that's exactly what they did.

PR Week reports that the pet store giant announced in early December its plan to remove the red and blue characters from the front of its stores nationwide, replacing it with simply the word "Petco" in black lettering.

The logo change is reportedly part of Petco’s rebrand to "Petco, The Health + Wellness Co" from "Petco Animal Supplies.

But many customers were having none of it.

The new, pet-free Petco corporate logo was an immediate PR disaster, trashed online and dubbed as "cold and lifeless." 

The pet store clarified that the animals - apparently named Ruff and Mews - are “here to stay.” But only in their advertising.

That didn't do much to mollify Twitter, which scathed the brick and mortar retailer.

"I don't CARE if they're still present in advertising I want them back to being present on the LOGO gosh darnit," said one Twitter user, @anoutlawed, in one of the more printable remarks.

Another wrote:

"Dear @Petco, Your new logo is cold and lifeless. Is the next step phasing out pets, until you're just "co" Cause at this point - might as well."

And another said, bluntly:  "New logo is complete garbage. Lol I dont think I've ever seen a worse downgrade. Fire whoever thought of this s****."

Cool Guy Mark wrote: "Why do you hate your customers? New logo is neutered 😞"

It's unclear what the company was thinking. and it's also unclear whether they did any research on how beloved these characters actually were before making the change public. 

The company's initial response was apparently silence, indicated by the PR Week article noting that a comment was not immediately forthcoming from the company PR department, which clearly was not the best move, especially when a magazine and online industry journal for the public relations industry calls for comment.

Chalk it up to the year 2020 taking two more victims. Unless the company backtracks in early 2021, which it surely should.

Tuesday, November 10, 2020

#AbbottMediaGroup Does Social Media

 

One of the things AMG hears all the time is "Oh, our group can handle social media in-house." The first question we ask the one saying it is usually, "Oh, really? Then why is your last Facebook post and tweet from March, 2015?"

The sad fact is, in-house social media is often viewed as "extra," rather than an integral part of what you're group or company is doing, and it can easily drop from the radar. And many executives and business owners are too busy to do social media, or aren't skilled in crafting effective messages.

AMG not only keeps you up to date with quality social messaging, we can also provide guidance that will help you avoid costly online pitfalls and mistakes. Talk to us TODAY about letting #AbbottMediaGroup manage your online social media presence!

Thursday, August 27, 2020

That time when Shark Tank laughed a surgical mask designer off the stage [Abbott Media Group]


When you make a mistake, own it. That's a solid public relations principle far too few in business, politics, and entertainment follow, probably because it's difficult.

Shark Tank's Daymond John recently demonstrated just that principle, however, in a video and post on his Instagram feed.

On September 6, 2009, Irinia Blok, a 32-year-old American immigrant from Russia, had appeared on the ABC show "Shark Tank," then in its first season.

She was pitching her unique business idea, "Face Blok," surgical masks that are whimsically decorated. She told the sharks that there was actually demand for them in hospitals, though she had only sold a few hundred.

She was met with uproarious laughter from all the Sharks almost immediately.

Her segment, when it aired, was clearly played for laughs, with "circus clown" music heard on the show when she spoke.

The Sharks were incredulous at the concept, most even refusing to try on the masks when Blok offered. Kevin O'Leary tried on a mask featuring a pig snout, doubting openly whether anyone would wear such a thing. Daymond John mockingly wore one on his head.

She said she received 700,000 hours on her website after media coverage. But O'Leary noted that the Swine Flu epidemic earlier that year was "an epidemic that came and went," and prophetically said, "You need a new epidemic to get that kind of hit profile again."

Jump ahead to Aug. 26, 2020, when that same Daymond John posted a video of the segment to his Instagram feed titled, "hindsight is 2020." He wrote:
"As we've come to see, many entrepreneurs have visions/ideas better way ahead of the times. Sure, the ideas may seem ridiculous or even comical, at the time, but as we're starting to learn, we shouldn't dismiss them all together because one day, they may prove to be useful, such as these novelty masks. 
There didn't seem to be a purpose for them back then, but Irinia Blok was definitely on to something because look at us now... we're all wearing masks. The joke is on us now!"
The bottom line is that it's important to admit and "own" your mistakes, hasty judgements, and oversights. Kudos to Daymond John for doing that so publicly!

As for Irinia, she's doing just fine. Before her appearance on the show, in 2007, as a member of Google's graphic design staff, she had independently created the now-famous green robot logo later adopted by the company for its Android phone operating system. It became synonymous with the product in the 2010s.

She no longer sells the designer masks, but has a full-time job as design lead at Google Research/AI.

Online: https://www.irinablok.com/

Friday, March 20, 2020

Political Campaigning In A Time Of Crisis [Abbott Media Group]


With fears of the Coronavirus sweeping the nation, there seems to be little time for political campaigning.

In fact, election dates are being pushed back by months in many local communities, and political candidates may find themselves way down on the media's list of priorities.

Candidates should definitely not continue with a "business as usual" approach. But this doesn't mean they can sit at home and wait until June (or in some cases, late Autumn) to start campaigning. Actually, this delay presents an excellent opportunity - especially for non-incumbent upstart candidates - to stay in touch with supporters and continue to introduce themselves to new voters.

Of course, the new realities of the outbreak make many traditional ways of campaigning impossible for the moment. These now-forbidden staples of campaigning include door-to-door canvassing, campaign rallies, attending party meetings, and any other kind of face-to-face meetings.

However, there are still a great number of ways to reach out and remain in contact with voters, and keep candidates' names in the public eye, including extensive (daily) use of social media, speaking frequently on major issues your voters care about in print (via news releases and press statements) and short videos with tightly worded messages that convey campaign themes.

That last point is vital. You MUST have a compelling, consistent campaign message, and repeat it often. When I start working with a candidate, we first create a strong stump speech composed of a consistent list of campaign issues their voters care about, written around a short biography that is compelling and interesting. That's the basis of all future messaging, including the stump speech. Voters crave consistency, especially in a crisis.

And speaking of the crisis, candidates must comfort voters, and speak out (in the appropriate way) about how incumbents are handling it, and should be clear about how THEY would handle it.

Let me end by saying that best way to accomplish all this is to HIRE A PROFESSIONAL! I can help candidates navigate the new realities online and off, and present a consistent, compelling message that will keep voters engaged in this time of crisis. If you are one, or know one who could benefit from my services, put them in touch with me.

Stephen Abbott
AbbottMediaGroup.com

Monday, June 24, 2019

New Roles For the Old News Release [Abbott Media Group]



Long gone are the days of your PR firm or your own organization simply sending out a press release to the media, sitting back, and thinking that the job of promoting product, service, or individual has been completed.

That's because the news media are no longer the sole audience of the news release.

Stephen Abbott of Abbott Media Group is skilled in using tried and true tools and techniques such as the news release, putting them to work in new ways.

AMG understands that news releases today can play several functions in the promotions process,. Releases sent to the media aren't necessarily to ensure immediate coverage. In fact, it's often unrealistic to assume that everything sent will be published.

In Abbott's political campaigns, frequent releases have served the purpose of showing that a campaign is active, has hired staff, is raising money, is engaging with voters, and is seriously contesting the race. And it must be understood that releases from political campaigns have several audiences. Not just local news media, which may or may not be covering local politics, but also political leaders, local business leaders, elected officials, and of course voters. Sometimes releases specifically targeted to these Publics make more sense than the single, standard  Release

Releases written for business can play a similar role by simply reminding local news media and others that the business is active in the community and open for business.

Releases sent to internal Publics also have a reassuring effect, and can communicate best practices within a business organization, as well as communicating new policies and procedures to everyone, not just to a select few. Effective internal Communications also build a sense of rapport and togetherness within organizations, reducing gossip and misunderstandings, as well as employee turnover.

They can also be employed to convey the new or long-held mission and vision of a group or company. These reminders, written in news-worthy, fresh ways, help solidify the reputation of the group or company within a community, and help clarify the purposes towards which they're striving. They also clear up misconceptions that could damage reputations or cloud the purpose of a company in the public's perception in the long term.

News releases, of course, continue to fill the traditional role of introducing new products and services to current and future clients and customers. They still must primarily be sharing something NEW, and be  News Worthy in order to be considered for print and digital distribution. But they also can demonstrate to clients that a business has the expertise in the field in which they operate, capable of bringing the latest technology and techniques to bear on their behalf.

Frequent news releases posted on a company or campaign website are an easy way to provide fresh content for visitors. Web content that is frequently changing and updated ranks higher in searches.

Finally, news releases can play a vital role in conveying to relevant Publics within the community that a business is engaging actively with it, playing a positive role by giving back through charitable giving and social involvement. This has the effect of building positive feelings towards the business, enhancing its reputation and making future business transactions with them more likely.

AMG and Stephen Abbott understand how to fully employ all the aspects of news releases, and use them to the fullest effect on behalf of clients. Contact AMG today for more information. www.abbottmediagroup.com.

Saturday, January 26, 2019

About That Controversial Gillette Ad - Should Corporations Engage In Social Commentary?


About the controversial Gillette ad, it's beautifully filmed and one could argue that it simply calls on men to step up and do what's right when they see men bullying and belittling women. Great. Long overdue, and there's nothing wrong with that general sentiment.

But the #MeToo movement the ad references often devolves into anti-male hate and a generalization that all men are inherently aggressive by their very nature, and need "fixing." This turns this into a politically-charged ad, and a socially polarizing one.

Should corporations be involved in political ads and "virtue signaling" about social issues at all? From a #PR point of view, these kind if ads can appeal to one side of an issue, but repel others, so they are inherently risky, and divisive.

Gillette, and its parent company Procter & Gamble, likely assumed that everyone would be on the side of not being rude to women, but the perception of the ad as an attack on all men, as some in the Me Too movement have sometimes sounded, seems to be overwhelming this benign interpretation of the ad, leading to a massive #boycottGillette effort, emerging on the social platforms Twitter and Facebook.

We have of course seen this before, as when companies such as 84 Lumber have waded into the immigration debate with a Super Bowl ad featuring illegal immigrants crossing the border.

Gillette now faces a boycott from men, their primary users, while getting praise from women. A dangerous economic strategy, and a warning for other companies that are tempted to wade into divisive political issues.

Stephen Abbott
#AbbottMediaGroup