Where's The Beef?

Last year, in a post entitled "Reputation Management In The Digital Age," I presented some examples on how a slow response to a crisis can do serious damage to a company's brand and reputation. For much of the past week I thought history was repeating itself as I observed Taco Bell's evolving response to the "Where's the Beef" lawsuit. It took multiple attempts, but Taco Bell eventually presented a strong and effective response to a lawsuit's allegations that there's very little beef in the fast food chain's tacos, and therefore it should be prohibited from advertising the tacos as containing "seasoned ground beef or seasoned beef."

The class action lawsuit was filed January 19, 2011 in federal court in California by Montgomery, Alabama attorney W. Daniel "Dee" Miles. The lead plaintiff is Amanda Obney of California. The suit alleges that the meat mixture in Taco Bell's burritos and tacos contain binders and extenders and does not meet requirements set by the USDA to be labeled beef. Specifically, the suit alleges that the taco filling is made of components such as water, isolated oat product, wheat oats, soy lecithin, maltodextrin, anti-dusting agent, autolyzed yeast extract, modified corn starch, sodium phosphate, as well as some beef and seasonings. When contacted for a comment on the lawsuit, attorney Miles said that just 35 percent of the taco filling was a solid, and just 15 percent overall was protein. "You can't call it beef by definition," Miles said. "It's junk. I wouldn't eat it."

When Taco Bell was asked for its comment on Monday, January 24, I do not think that it handled it well. It told Alabama television station, WSFA, in a prepared statement that: "Taco Bell prides itself on serving high quality Mexican inspired food with great value. We're happy that the millions of customers we serve every week agree. We deny our advertising is misleading in any way and we intend to vigorously defend the suit."

In my opinion, the statement fails because while Taco Bell is "vigorously defend[ing] the suit," its customers are asking "What's in the tacos?"

I suspect that Taco Bell realized the weakness of its initial response and the danger to its brand presented by the lawsuit and the attendant publicity, because the next day,Tuesday, January 25, it tried again. The following statement from Taco Bell's president, Greg Creed, appeared on Taco Bell's website and was released to the media:

"At Taco, Bell, we buy our beef from the same trusted brands you find in the supermarket, like Tyson Foods. We start with 100 percent USDA-inspected beef. Then we simmer it in our proprietary blend of seasonings and spices to give our seasoned beef its signature Taco Bell taste and texture. We are proud of the quality of our beef and identify all the seasoning and spice ingredients on our website. Unfortunately the lawyers in this case elected to sue first and ask questions later -- and got their "facts" absolutely wrong. We plan to take legal action for the false statements being made about our food."

Although this statement began to address the primary issue of "What's in the tacos?" it erred in mentioning the lawsuit and discussing Taco Bell's contemplated legal response. When the media reported the statement, the lead was not Creed's defense of the product, but that Taco Bell was going to sue. For example, Reuters lead was "Taco Bell Plans Countersuit Over Ground Beef" and Creed's statement that Taco Bell uses "100 percent USDA-inspected beef" did not appear until the fifth paragraph of the story. Another problem with the statement was the second sentence: "We start with 100 percent USDA-inspected beef." The issue isn't what Taco Bell "starts" with, since the lawsuit acknowledges there is meat in the taco, just not enough to be labeled "beef." The issue is what is in the "end" product the consumer purchases and eats.

On Wednesday, January 26, Taco Bell put another statement on its website and released it to the media, "Statement Regarding Class Action Lawsuit." This is a much stronger and detailed statement that finally tells the consumer everything that is in the taco, with the approximate percentage of each ingredient. However at this point, three days into the crisis, Taco Bell was probably advised that releasing statements is not sufficient to address the issue or the potential damage to its brand. Therefore, this statement was followed-up on Thursday, January 27, with a YouTube video entitled, "Of Course We Use Real Beef!" and featuring Taco Bell president Creed. Although the content is similar to the January 26th statement, Creed makes no reference to the lawsuit or any Taco Bell legal action. Instead he addresses the issue head-on in a very convincing manner:

In addition, today, Taco Bell launched an advertising campaign about the taco filling, placing full-page print ads in the New York Times, USA Today, and The Wall Street Journal. The print ads say, in huge letters, "Thank you for suing us. Here's the truth about our seasoned beef." Here's a link to the ad. Although I think "Thank you for suing us" is inappropriate, the ad, in conjunction with the YouTube video, is a very strong defense that addresses the real issue. Time well tell whether Taco Bell's evolving response has been successful in protecting its brand and reputation.

Foretelling the Tragedy in Arizona?

I was trying to clean up some old emails today, and was looking at this one dated December 27, 2010 from the National Law Journal titled The Year in Review. There was one article, “They Said It”, which is a slide show of "memorable remarks" for 2010. I do not know what made me stop and look at it, but I almost fell off my chair when I got to the eighteenth slide. It has to be seen to be believed.

UPDATE: The New York Times leads with Giffords in article published today. "In Tucson, Guns Have a Broad Constituency."

Covington & Burling Starts Crisis Management Practice

Covington & Burling is joining the ranks of law firms that have initiated a crisis management practice. Former D.C. Attorney General Peter Nickles, who was a Covington partner before joining the administration of D.C. Mayor Adrian Fenty, will chair the new crisis management practice.

In addition to Nickles, the crisis management team assembles some of the firm’s most high-profile attorneys, including former Homeland Security Secretary Michael Chertoff; Stuart Eizenstat, who served as President Clinton’s ambassador to the European Union; former NFL Commissioner Paul Tagliabue; and Thomas Williamson, former U.S. solicitor of labor.

Covington Brings Back Former DC AG Nickles, Launches Crisis Management Practice

Fitting The Pieces Together

In August I blogged about how legal and public relations counsel for BP failed to work in harmony in helping BP deal with the fallout of the Gulf oil spill. Getting The Communications Professionals And Lawyers To Work Together In A Crisis. A few weeks later Larry Kamer, managing director ofThe Glover Park Group, wrote an opinion piece in PRWeek emphasizing that a crisis like the Gulf oil spill should create a shared opportunity for legal and public relations counsel. Here is a link to Kamer's piece:

Crisis can create shared opportunity for PR and legal teams - PRWeek US

A Sea Change

As I have frequently written in my blog posts, social media represents a sea change in the way corporations and other business entities communicate with the public, especially in a crisis. Therefore it should be no surprise that according to a recent article in PRWeek, social media was a key channel for Carnival Cruise Lines in its crisis communications response to the fire aboard its Splendor cruise ship earlier this month. In addition to proactively distributing news updates to conventional media, Carnival also communicated updates by posting them on carnival.com, Facebook, Twitter and carnival-news.com. Jennifer de la Cruz, director of public relations for Carnival, told PRWeek that, "Our key messages . . . focused on providing assurances that everyone was safe, the status of the situation on board and any updates to the plan for returning the ship to port and, of paramount importance, communicating our apologies and acknowledging the difficult environment on board."

The day before the Splendor was towed into San Diego, the ship's cruise director, John Heald, made a post about the conditions aboard ship on his popular personal blog. Heald's blog post was picked up by major media outlets such as USA Today, which commented:

The ship's famously saucy cruise director, John Heald, has just posted a lengthy, startlingly candid account of the first few minutes of the crisis on his personal blog, which is widely followed by cruise fans. . . . In an account that mixes both seriousness and Heald's trademark humor, the longtime Carnival staffer goes on to explain both the severity of the situation that he witnessed on the ship's bridge and the crew's heroic response.

My colleague, Chris Gidez, was interviewed by PRWeek about Carnival's crisis communications response and provided the following analysis:

Chris Gidez, head of US crisis/issues management group for Hill & Knowlton, calls the early blog post by Heald "brilliant. The first rule in crisis management is to regain control of the agenda and conversation." [Gidez] says that's especially important in a situation like this, where passengers are now starting to talk to media and no doubt will share their own detailed accounts online. "The cruise community is very engaged and active online. There will probably be video shared too, and it will likely go viral," says Gidez. "While we can expect to hear stories of long lines, no air conditioning, rude crew members, etc., there will be just as many who applaud the performance of the line."

Halloween 2010

Social Media Monitoring and Astroturfing

In my last post, Monitoring Social Media, I discussed how Gatorade is monitoring social media to, among other things, protect its brand. Gatorade has constructed “Mission Control,” a social media monitoring operation staffed by four Gatorade employees 24 hours a day, seven days a week. According to an article in the Wall Street Journal that described Mission Control:

Sitting in a glassed-in converted conference room at Gatorade headquarters [in Chicago], Meg Poulelis tweets encouragement to high-school athletes before big games and taps out responses to Facebook queries such as when to use the new protein drink. . . . Whenever someone uses Twitter to say they’re drinking a Gatorade or mentions the brand on Facebook or in other social media, it pops up on a screen in Mission Control. On Saturday, the staff jumped into a Facebook conversation to correct a poster who said Gatorade has high-fructose corn syrup. . . . Aware that consumers may be wary of intrusion, Ms. Poulelis and her colleagues have to figure out when to pipe up – and when to hang back – when someone is talking about Gatorade. “If they’re directly asking where to buy products, we’re going to weigh in,” Ms. Poulelis said. “If they want to talk about working out, we let them have that conversation.”

Putting aside what some consider an intrusive practice, when the staffers at Mission Control jump into an online conversation to talk about Gatorade, they use the Gatorade logo as their avatar and identify themselves as Gatorade employees, which, of course, is the correct way to do things. Doing it the wrong way can have serious legal repercussions.

That is because in October, 2009, the Federal Trade Commission (FTC) announced that it had approved revisions to the Guides Concerning the Use of Endorsements and Testimonials in Advertising to specifically cover bloggers and social networking sites. Specifically, the FTC’s revised Guides made clear that any online posts by a blogger connected to a marketer must disclose the blogger’s connection to the marketer in such posts. Then, in late August of this year, the FTC announced a settlement with a California based public relations firm, Reverb Communications, Inc. and its owner, Tracie Snitker. The settlement resolved claims that Reverb and Snitker had engaged in “astroturfing” on behalf of its video game developer clients.

Specifically, the FTC alleged that between November 2008 and May 2009, Reverb employees posted reviews about its clients’ video games using account names that gave readers the impression that the reviews were written by disinterested consumers, not by individuals who had been hired to promote certain games. The employees “astroturfed” by consistently giving the Reverb clients’ applications four or five stars or by positively commenting on them with testimonials such as “amazing new game,” “one of the best,” and “one of the best apps just got better.”

As part of the settlement, Reverb agreed to remove any posted endorsements that misrepresented the authors of such posts as independent users or ordinary consumers, and that failed to disclose the connection between Reverb and the video game developers. The settlement also prohibited Reverb from engaging in such deceptive practices in the future.

There are two interesting aspects to the Reverb matter. The first is that the FTC chose to go after the public relations firm and not the video game developers, thus establishing that the employees of a marketer’s public relations firm have the same duty of disclosure as the marketer’s own employees. Second, the FTC went after conduct that occurred before the December 1, 2009 effective date of the revised Guides, thus establishing that it has always considered “astroturfing” a deceptive practice.