Recycle Old News or Stick to Brand Values? How will firms deal with Trump?

trump-brands

Trump’s Twitter attacks have targeted a number of firms. His behavior may not change when he takes up the Presidency today.

Trust me, it’s happening. Today, Donald Trump will be sworn in as President of the United States. And, judging by the past couple of months, Trump will personally run his agenda of making America great again across the entire business community. Shel Holtz has written a fantastic piece about the impact that Trump has when he Tweets about a company which he feels isn’t doing enough to support his American vision.

Companies will have two basic strategies to deal with this new type of political risk; they can either recycle old news, or they can resist Trump’s attacks, and fight back (yes, you read that right, brands will go up against Trump).

We’re already seeing firms come out with a raft of job announcements. This week General Motors said it would invest US$1 billion in its U.S. manufacturing operations, which will lead to the creation or retention of 1,500 jobs, adding that it would also add another 5,000 American jobs “over the next few years” in finance and advanced technology. Fulfilling another Trump pledge, GM announced that around 450 jobs will be returned to the US as GM transfers back parts production from Mexico.

Other firms have also put out jobs announcements. Amazon, whose founder Jeff Bezos publicly rowed with Trump during the election campaign, announced that it’d hire over 100,000 staff over the next 18 months. “It’s a very powerful headline, and the timing certainly makes Trump look good,” Ivan Feinseth, an analyst at Tigress Financial Partners LLC, told Bloomberg. “It’s going to happen in the first year and half of his administration. Bezos couldn’t have set him up any better to look good — timing is everything.”

China’s Alibaba has sought to allay Trump’s Chinese angst by promoting job creation in the US. Last week, Alibaba chairman Jack Ma met with the president-elect to tell him that the Chinese Internet giant would create 1 million jobs for Americans by helping small domestic businesses sell to Asian markets via Alibaba.

Job creation in the US is a tactic that many firms will seek to copy over the coming months as Trump takes charge. How many of these announcements will stack up, who knows. We’ll only know for sure after the space of months or years. However, many brands will be tempted to win favor with Trump’s administration and stay out of his crosshairs by pushing job news. The questions many will ask are, is the news real (for example, will Alibaba really be able to create a million jobs for Americans?), and is the news old? It’s been alleged that the GM announcement was planned as far back as 2014.

The other approach that companies will take is to stand up to Trump. Speaking to the San Francisco Chronicle, Richard Levick, president and CEO of the Levick public relations and communications firm explained why.

“Other companies will realize that the king doesn’t have a lot of clothing here,” he said. “At some point in the not too -distant future, a company will realize that there is greater value in being courageous and standing up to the president.”

To date, the best example of a brand fighting back against Trump is Vanity Fair. The publication, whose editor Graydon Carter has long been a critic, ran a piece in December last year titled, “Trump Grill Could Be The Worst Restaurant In America”. Needless to say, it didn’t go down well with the President-Elect.

The magazine responded  instantly, running a headline banner ad across its own and other sites entitled “The Magazine Donald Trump Doesn’t Want You to Read.” The result was 40,000 new subscribers.

“Vanity Fair played that perfectly,” Scott Farrell, an expert in crisis management and the president of Golin Corporate Communications, told the New York Times. “‘This was the magazine that Trump doesn’t want you to read.’ I think their response was consistent with the brand’s DNA.”

Firms will either have to proactively plan to put out information that will appeal to the new administration. Or they’ll have to plan on how to respond to a potential attach. Whatever they do, brands will have to move with speed, to counter Trump’s use of Twitter. Whichever route brands take, crisis comms experts (and the rest of us) are going to have an interesting four years. Unless someone turns off the WiFi in Trump Towers, that is.

The need for clear communications – Saudi’s drive to balance the books

lazy-saudis

Saudi’s social media scene has been on fire over the past week due to a number of controversial issues regarding government officials. This is a news story from the Times on a comment made by a minister regarding Saudi inefficiency.

This week has been an interesting one for Social Media watchers in the Kingdom. Thousands of Saudi nationals have taken part in online campaigns/used popular hashtags relating to three high-level government officials who have either made controversial statements or who have been accused of using their influence on behalf of family members (you can see media coverage on two of the issues from Saudi Gazette here and Arab News here). The campaigns follow a decision a month ago to cut benefits for Saudi government employees. The decree, which was made in light of low oil prices and a rising Saudi budget deficit, is biting hard; this week Reuters reported that the Saudi central bank had asked retail banks to reschedule property loans for those affected by the cuts.

One of the campaigns began after a government document was leaked online, with personal details including name, position and salary. It’s only logical to assume that many government officials in the Kingdom are angry at seeing their pay cheques shrink; they’ll become even more angry when they see what they feel to be others not doing the same. In this environment, it wouldn’t be hard to also imagine officials being able to take a picture via their smartphone of a document which may reveal an embarrassing situation and then sharing it via social media (or, more likely, dark social).

I had the pleasure of listening to a senior Saudi journalist this week. He made a pertinent point when he said, “We can spend billions on consultants. We could have spent millions on a PR agency to convey the message behind the cuts and why they were necessary.”

In times of hardship, good communications becomes even more important. Saudi’s citizens need to understand the logic behind government decisions. They need to feel that they are engaged and are part of the debate. And they need to see government’s leadership doing just that, namely leading by example (as I’ve said before, actions are much more powerful than words in shaping perception).

We may see more issues coming to light in the Kingdom over the coming months, and more skeletons being revealed in government closets. When it comes to the government’s engagement and communication with its people, the transparency, clarity and consistency (or lack of) will either help get many Saudi citizens on board, or it may alienate them further. I for one hope it’s the former, rather than the latter.

 

Flip-Flopping during a crisis – how Damac’s handling of the Trump backlash has proved costly

First you don't see it, then you do. Damac initially removed Trump's name after his comments on Muslims, only to restore it a couple of days after (top photo by Reuters/bottom photo by  Rahul Gajjar of Khaleej Times)

First you don’t see it, then you do. Damac initially removed Trump’s name after his comments on Muslims, only to restore it a couple of days after (top photo by Reuters/bottom photo by Rahul Gajjar of Khaleej Times)

Imagine for a moment, if you will, one of your key business partners/influencers saying something controversial. Imagine that they’ve just racially attacked your most important group of customers. And then imagine that, rather than dumping this partner, you instead flip-flop around the issue and end up not only looking rather foolish, but do yourself and your reputation a fair amount of harm in the process.

If you work at Damac, you don’t need to imagine any of the above. The Dubai-headquartered real estate developer, which counts Donald Trump as one of its business partners, has been flip-flopping since Trump came out with a comment on the 7th of December that there should be a “total and complete shutdown of Muslims” entering the United States. This statement, which was made following the deadly shootings in California’s San Bernardino, weren’t the first Trump had made about Muslims. He had previously that he was in favour of shutting down American mosques and establishing a database for all Muslims living in the US or giving them a form of special identification that noted their religion.

Damac’s relationship with Trump International includes branding for two Trump-branded gold courses and a collection luxury villas at the developer’s Akoya project in Dubai. I don’t know the full extent of the relationship, but local newspaper 7DAYS claimed that, in addition to the licensing fees that Damac would have to pay to Trump for the use of his name and image, Trump himself had invested in the project.

Following the controversy around Trump’s latest Muslim statements, Damac put out a statement that could be called, at best, avoiding the issue.

Damac Properties senior vice president Niall McLoughlin told 7DAYS in a statement: “We would like to stress that our agreement is with the Trump Organisation as one of the premium golf course operators in the world and as such we would not comment further on Mr Trump’s personal or political agenda, nor comment on the internal American political debate scene.”

Instead of publicly taking Trump to task and distancing the company from his statements, Damac took a different approach. A couple of days after the outcry, on the 10th of December Damac took Donald Trump down – his image and name that is, from their developments. To quote from 7DAYS.

Hoardings that previously carried photos of the billionaire businessman advertising Damac’s Trump-branded golf course and luxury villas stood bare on Umm Suquiem Road on Thursday, right at the entrance to the development.

All well and good you may think – Damac quietly rebranded their development and distanced themselves from Trump. However, in a further twist, Trump’s name was back on billboards two days later, on the 12th of December. Here’s how the English-daily Khaleej Times put it:

On Friday, a prominent advertising billboard showing Trump golfing that had stood at the Akoya development, where the housing and one of the golf courses is being built, was gone. All that remained of it was the board’s brown wooden background. Another billboard declaring the development “The Beverly Hills of Dubai” still stood nearby.

Trump’s name also appeared to have been pulled off one sign greeting visitors to the complex. The sign, outside a sales office at the site, originally had Trump’s name in lettering on a stone wall. But on Friday the letters were littering the ground in front of it.

A second, similar sign facing a major road was intact with Trump’s name on it. Earlier in the week, that sign had been taken down but by Friday, it was back in place.

“The exterior signage at Trump International Golf Club, Dubai was temporarily removed on Tuesday for a short period of time, however as of last night, the signage is back up and fully intact,” the Trump Organization said in a statement to The Associated Press on Friday.

Also, the Damac webpage dedicated to the Trump PRVT gated community, which is part of the development, appeared to have been removed, leading only to a “not found” page.

Since the development is still under construction, the removal of the branding with Trump’s name and image seemed to be largely symbolic. It was not known if it signaled Damac will outright break the licensing contract.

Damac Properties has declined to comment on the removal of Trump’s name and billboard from the property. It earlier said it “would not comment further on Mr. Trump’s personal or political agenda, nor comment on the internal American political debate scene.”

To change the issue, Damac has switched tactic. Instead of talking politics, the developer announced that it would guarantee rental returns for those buying in its Akoya (Trump-branded) project. The National broke the story last week.

Damac Properties, the developer caught in a storm over its partnership with the controversial US presidential hopeful Donald Trump, is offering lucrative rental returns on some of its properties to lure investors.

Damac, which said it would stick with Trump International despite his anti-Muslim tirade, is providing a 24 per cent rental guarantee on selected units in Dubai, including the Akoya project associated with the billionaire, the developer said in a statement.

Owners of selected properties will be able to secure an eight per cent annual return in the first three years after handover.

The company was offering these returns because it believes the Dubai property market is “set for stable growth in the medium term”, Damac said. “We have seen quite a bit of scaremongering in the market in recent months, which can have a detrimental effect on sentiment in the market,” said Niall McLoughlin, the senior vice president at Damac. “By providing such a high, tax-free offering on our units, we are putting our head above the rest and underwriting any fluctuations that may occur down the line.”

Reputational issues become even more important for companies which are listed, as Damac is. Damac’s shares initially fell 15 percent following the muted response. Investors may also not have appreciated the rental guarantee initiative, as you can see from the share price chart below.

Damac's share price fell after the initial outcry. The share price has also fallen following Damac's attempts to repair the reputational damage through the rental incentive promise.

Damac’s share price fell after the initial outcry. The share price has also fallen following Damac’s attempts to repair the reputational damage through the rental incentive promise.

While I don’t know the relationship between the two, would Damac have been wiser to have taken an initial hit and exited the contract with Trump rather than flip-flopping on the issue, drawing it out and drawing more attention to the brand association? Add in the costs with guaranteeing rental returns in addition to the share drop, and this crisis will prove costly both in the short as well as the long-term. To me, the media and the company’s shareholders the answer about whether or not to dump Trump – and take a short term hit through contractual obligations but save the company’s reputation and keep shareholders and customers happy – seems fairly obvious.

Not the headline one hopes for – Migrant workers, ‘trespassing’, and Qatar’s BBC own goal

A communicator’s job (or part of at the very least) is to generate headlines. Preferably favorable headlines. But even the best of intentions can often come undone.

It’s an understatement to say that Qatar has been under the microscope recently. The country, with a population of just over a million (both nationals and expats) and hundreds of billions of dollars of gas reserves, has often strived to make its mark on the global stage. One such project is the news station Al-Jazeera, which has revolutionized media in the Middle East and beyond.

Qatar’s World Cup bid and subsequent win hasn’t been the success the country may have hoped for however. Ever since Qatar was awarded the 2022 World Cup by FIFA, it has been subject to criticism by international NGOs about a host of issues ranging from the rights of homosexuals to labor rights.

The biggest concern has been the living conditions of low-income workers, specifically those people who are building the infrastructure for the World Cup.

To their credit (or maybe because there’s little other choice afforded to them), the Qatari government has tried to tackle allegations of poor treatment of migrant workers head on. They have announced new legislation to penalize companies who do not pay workers on time and an amendment to the national labor law to facilitate the payment of workers through direct bank deposits.

Qatar has also been keen to promote the new migrant labor villages that the government has built. As part of its media efforts, the country’s Labor Ministry invited global media last week to view this new accomodation and meet the country’s Labor Minister to talk about Qatar’s push to promote labor rights.

However, things didn’t go quite as expected. I’ll quote from the Guardian below.

A four-strong BBC crew had been invited by the prime minister’s office on an official tour designed to show off new accommodation for migrant labourers, but were arrested by the security services while trying to gather additional material. They were interrogated and jailed for two days, before being released without charge.

The visit was part of a public relations drive, partly overseen by London-based agency Portland, in the wake of an international outcry over the slave-like conditions for workers exposed by a Guardian investigation in September 2013.

Rather than the story being the improvements in living conditions for Qatar’s migrant workers, the headline on the BBC (which was carried across the globe) was BBC team arrested, and held for several days.

It went from bad to worse for Qatar when Qatar’s communications chief explained that the BBC team had been arrested for ‘trespassing’. Again, to quote from The Guardian.

The Qatari government’s head of communications, Saif al-Thani, said the BBC crew were arrested after departing from an official tour. He said: “We gave the reporters free rein to interview whomever they chose and to roam unaccompanied in the labour villages.

“Perhaps anticipating that the government would not provide this sort of access, the BBC crew decided to do their own site visits and interviews in the days leading up to the planned tour. In doing so, they trespassed on private property, which is against the law in Qatar just as it is in most countries. Security forces were called and the BBC crew was detained.”

The challenge organizations often face is how to ensure that the same message is conveyed across the entirety of the organization. It’s obvious that in Qatar there were differences of opinion which led to the BBC crew being tailed by the security forces once they’d entered the country and to their arrest while doing their job.

The question now for Qatar is how do they go on from here and get the message right, across all of the country’s government and leadership? The media scrutiny is only going to get even more intense, the closer we get to the 2022 World Cup. I’ll continue to watch this story and how it unfolds in the media.

@saudigazette’s reader voices and does the Kingdom have an image problem?

Saudi Gazette's new Voices column aims to give readers an opportunity to share their own opinions

Saudi Gazette’s new Voices column aims to give readers an opportunity to share their own opinions

Saudi Gazette has launched a fascinating project to give its readers an opportunity to write more than a letter to the editor, but rather pen a guest column. The first column, named Voices, features the thoughts of former Saudi journalist and doctoral candidate Najah Al-Osaimi. The piece by Najah looks at Saudi’s image and how it is perceived abroad. It makes for an interesting read, even more so when considering its publishing in Saudi Arabia.

Let me know your thoughts on Saudi Arabia and its image problem abroad. And thank you Saudi Gazette for another wonderful idea. If you are interested in writing a column for the Saudi Gazette then email your contribution, no less than 300 words, to voices@saudigazette.com.sa.