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Firms On the Spot Roll Out the Spots Feb. 13, 2002 (washingtonpost.com) Your company is in turmoil. Rocked by accusations of wrongdoing. Linked to corruption. Losing clients. Shedding stock value. Every day, your firm is in the headlines, for all the wrong reasons. What do you do? You advertise. Sometimes called the "crisis" or "triage" ad, it is the last line of PR defense for an embattled company. It often takes the form of a plaintive television plea from a chief executive or a text-heavy, full-page newspaper ad. Note the spate of full-page ads taken out by accounting firm Arthur Andersen, caught up in the Enron fiasco. The most recent -- appearing in The Washington Post and other major papers this week -- is the company's third since the scandal broke. Wednesday's ad, an "open letter" from Andersen chief executive Joseph F. Berardino, mentioned eight times that "changes" or "fundamental changes" were needed in the firm's practices. "Almost two months ago we went before Congress and acknowledged our responsibilities," read the ad. "We said that we will be accountable for our actions, will learn from the experience, and will become a better firm as a result." The Andersen ads are the work of Chlopak, Leonard, Schechter and Associates, a Washington communications firm known for its work with companies in crisis. Andersen hired the 40-person consulting outfit on Jan. 7 because Andersen's PR staff was overwhelmed by media requests, said Chlopak partner Charlie Leonard. The ads aim to amplify Andersen's position, he said. "You don't get your side of the story out with six [paragraphs]" in a newspaper article, said Leonard, who is acting as an Andersen spokesman and is a former political strategist. Full-page ads in major papers can cost nearly $80,000 each. The Andersen ads are designed to be simple, with the text chosen carefully. For instance, one Andersen executive has already been fired for allegedly shredding documents related to the Enron audit. The word "shredding" was purposefully excluded from the ads, Leonard said. Further, the ads should have a focused message, he said. "You don't want the letters to be so cumbersome that people don't read them," Leonard said. In the case of the Andersen ad, the language is "either genuinely crafted or inspired by Joe Berardino in previous statements," he said. Robert Chlopak said there is no "cookie-cutter, simple yes-or-no" way to help a company in crisis to repair its image. In general, though, he advises clients to "be straightforward" in their ads. "Not real fancy, not funny," he said. "To take a more serious, advertorial type of approach." Chlopak's last high-profile client was the American Red Cross, which weathered a mini-scandal of its own regarding the Liberty Fund, set up for victims of the Sept. 11 attacks. Red Cross President Bernadine Healy eventually resigned after disagreements with the organization's board over handling of the fund. Advertising is only one part of a company's larger response that includes internal coordination, Chlopak said. And Enron, he said, is giving a how-not-to lesson in dealing with the media. "At the moment there is no clear strategy that I can discern for them," he said. "The media has just kind of picked them apart. One guy says he didn't do it, someone else did. So they call him and he points the finger at someone else. It's the worst possible situation. You try to make sure a smaller number of people are speaking for the company and singing from the same songbook." Enron itself has engaged in no advertising since the scandal broke. "We're in bankruptcy," said an Enron spokesman. "I don't think I'd approach our creditors" with a proposed ad campaign. Alan Siegel, a New York branding consultant, called the Andersen ads "a waste of time" and lacking in credibility. "It's disingenuous for Andersen to say, 'We're learning, we're studying the situation,' " Siegel said. "This company has been in business 100 years, they're the Good Housekeeping Seal of Approval of accounting, and they say they're going to learn from this?" Further, any message the ads attempt to convey is "garbled by this legal writing," he said. "If the president of Arthur Andersen really talks like that, are they really human beings?" Siegel asked. Crisis advertising can take many forms. Philip Morris's 2001 ad depicting the company's efforts to airlift food to Kosovar refugees helped repair the cigarette-maker's image, dealt a black eye by Big Tobacco lawsuit settlements. Dynegy Inc. quickly moved to deploy its own subtle form of crisis advertising, trying to keep from becoming collateral damage of the Enron meltdown. Like Enron, Dynegy is an energy-trading company. Like Enron, it is based in Houston. Dynegy's current newspaper ads, however, seek to slam home the point: We're not Enron. Our income comes from actual, concrete assets and fees -- not from specious accounting practices. "Our ads want to differentiate Dynegy from Enron," said Deborah Fiorito, Dynegy's chief communications officer. Dynegy wants to show that "the fall of Enron is about business practices and integrity and not about energy marketing," she said. "What happened to Enron was about the way they did business," Fiorito added. "It wouldn't have mattered if they made air conditioners." Unlike the text-heavy newspaper ads, Dynegy's current run of ads airing on CNBC were produced early last year, Fiorito said. Their appearance during the Enron scandal is a happy coincidence, she said. The Andersen and Dynegy ads are only the most recent crisis campaigns. Johnson & Johnson launched a series of ads in 1982 connected to a swift and total recall of Tylenol capsules afterseveral cyanide-related deaths linked to bottles that had been tampered with. In 2000, Ford Motor Co. used crisis ads to respond to a recall of Firestone tires following a series of fatal rollover accidents involving Ford Explorers. Jason Vines was Ford's communications chief during the recall. He sees similarities to Andersen's situation, but vast differences, as well. "No one's life is at stake here," said Vines, now a principal in the Detroit office of StrataComm Inc., a District-based communications firm. "There was an incredible amount of panic in the streets. People were saying, 'I won't let my child ride with you in your Explorer. He might be killed.' " Ford's months-long campaign, which involved print and television ads and cost an estimated $500 million, aimed to tell customers, "first and foremost, that Ford cares about you as customers and we're going to work hard to get the tires off your vehicle," Vines said. It was Vines's decision to put Ford's then-chief executive, Jacques Nasser, on television to make the company's case. The ads were widely panned by ad critics, as Nasser was characterized as stiff. Further, Nasser went on the offensive against Firestone, saying the recall was forced by "a tire problem, not a vehicle problem." Last year, Nasser was forced out by Ford Chairman William Ford Jr. The ads were extensively tested before focus groups, Vines said, which taught Ford a subtle if powerful lesson in the vagaries of image repair: that audiences come to crisis ads with skepticism -- the company looks guilty of something. So viewers are extra-keen at picking up signals, intended or otherwise. "There was a section [in one of the recall ads] where Jacques talked about owning three Explorers," Vines said. "That section didn't play well. Suddenly, the ad had gone from 'We care about getting the tires off your car' to shucking for car sales. There was an immediate turnabout in the audience reaction." As a result, Vines said, that section of the ad was edited out. -- By Frank Ahrens |
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