September 15, 2014

Branding Lessons for Wall Street from the Ray Rice Fallout

The three letters that comprise the strongest brand in the USA are N F L.

As much as we might abhor the behavior of Ray Rice, Adrian Peterson, and the other players who have engaged in illegal and unseemly behavior, the fact is that the NFL brand isn’t likely to take a meaningful hit from the latest fallout, even if NFL commissioner Roger Goodell’s personal brand and leadership suffers.

As Americans, we love our football way too much to be too distracted by individual players’ antics. (Personally speaking, while I’m a big sports fan, football is not my favorite—though the Jets’ ongoing mediocrity frustrates me!)

To be sure, after the first two weeks of the NFL season, there’s no sign that fan interest is waning despite some voices warning of it.  Ratings remain high and advertisers know there’s only one venue where they have a captive, live audience of upwards of 20 million people at one time.  And then there’s the Super Bowl: I don’t see masses turning away from what has practically become a national holiday.

What’s the take-away for other brands that receive bad publicity?

Let’s look at two of the financial industry’s largest companies—J.P. Morgan and Goldman Sachs—both of which have taken huge reputational hits over governmental sanctions and fines, as well as the perceived culture of greed permeating Wall Street.

J.P. Morgan’s stock is near its all-time high, and recently reported record income for its FY ’14 second quarter.  Goldmans’ stock price has more than tripled since the lows of the financial crisis, and its profit machine continues to hum along.

To be sure, both companies have made major improvements to their public relations efforts, with Goldman bringing in Jake Siewert, formerly the spokesperson for President Clinton and counsel to the U.S. Treasury Secretary Timothy Geithner.

However, there’s more than just good PR at work. All three organizations – the NFL, Goldman Sachs and J.P. Morgan – hold dominant market positions and offer products and services that are oftentimes far superior to their competition.

There also are big cultural trends at work.  America loves football, even though we abhor reckless and criminal behavior.  We also have a culture in this country that rewards success and values economic prosperity—and even though J.P. Morgan and Goldman Sachs have done plenty wrong—they both are considered bastions of capitalism and engines of economic growth: values that we still hold in high regard despite a growing trend of populist sentiment in this country and around the globe.

All of that said, just because an organization sometimes can get away with bad or questionable behavior, doesn’t mean that they always will. Enron and AIG are but two of a long list of companies whose illegal and questionable actions caused irreparable harm to their brands.

The postscript is that just because they have a Teflon-like brand, companies and organization can’t take anything for granted.  They need to constantly assess and work to improve their product/service offerings, public behavior and employee morale, and work tirelessly to build and enhance customer loyalty.  They can’t wait for an SEC investigation, insider-trading accusation or high-profile scandal before they begin to pay attention to their brand. By then, it could be too late.

By: Richard Dukas

Richard Dukas is Chairman & CEO of Dukas Public Relations.