Groupon’s Dodgy Deal: Can a PR Blitz and Site Overhaul Save the Company From Itself?

When it comes to Groupon, the daily deals digital Mecca, my, my, how the dot com angels have fallen.

Even as a public relations professional who’s seen and navigated her fair share of client missteps, I’m a bit gobsmacked by how a company that less than two years ago snagged the front cover of Forbes magazine with the eye-catching title “Meet The Fastest Growing Company Ever,” has managed to have its PR rug so skillfully pulled out from under them. What’s especially noteworthy is that Groupon’s recent rotten deal has been entirely self-made.

For readers who aren’t up on the latest Groupon happenings, the company has for the past several months, endured a barrage of PR setbacks, helping re-write the company’s until-now spotless public narrative. Here’s the errrr…..deal: In 2011 the Chicago-based company was roundly sacked following a Super Bowl XLV (45) ad that appeared to mock the decades’ long Tibet-China conflict. A few months later, and just ahead of Groupon’s November initial public offering (IPO), the company that had since its founding been branded based on its hyperactive growth, had to slice its reported revenue in half due to questionable accounting practices. Tsk tsk tsk.

Even the company’s opening stock price, fittingly perhaps, came in at a bargain $20 compared to an earlier valuation that said the couponing site was worth $30 billion. Re-tweaked fuzzy math brought that value down to $12 billion.

And while the company’s NASDAQ stock as of this writing is hovering near its opening price, only down .2 percent, and they’ve managed to start the new year with no additional public relations faux pas – that is if you exclude their announcement last week of a 2011 fourth quarter loss of $9.8 million – a sense of Wild West mentality combined with deck-of-cards-like fragility (some would say Ponzi scheme) continues to deal the company a PR blow.

To be sure, Andrew Mason, Groupon’s 31-year-old CEO, isn’t going down without a fight. In the effort to build back its image as a leader in the online deal-a-day world where coupons attract customers to once-hidden brick and mortar establishments and where everyone wins, the company announced this week major revisions to its website. Among the changes includes adding “thumbs up” and “thumbs down” capabilities so that Groupon users can help the site be more selective when doling out its latest offerings. And in another striking move, Groupon announced the hiring of public relations veteran Paul Taaffe to better manage the company’s image. His arrival comes after only a two-month stewardship by Brad Williams, formerly of EBay Inc.

Whether or not Taaffe, 50, paired with Mason,31, is the right combination of relative youth and relative years remains to be seen. But the fact that his arrival comes after his predecessor barely had time to break in his desk chair’s seat cushion, more than even erroneous math or disgruntled business owners crying foul over the supposed Groupon “deal,” is the best indication yet, that Groupon might be sick. Very sick.

As PR professionals we are tasked with helping keep our client’s message on track, being consistent and accurate with the media, and when calamity strikes, honest and up front about our mistakes. But that hard work should always be predicated on a company that gets its facts and its story straight –before it goes public. To do anything less is like having one hand tied behind your back during a boxing match. Or if you’re a lawyer, having your client reveal a critical detail that could alter a defense only moments before opening arguments. That type of handicap serves no one.

There’s no denying Groupon’s had a tough year. And while it may be easy to say “what’s 365 days in the course of a life?” Groupon, much like its leader, is still very young, having just celebrated its third birthday. But if you’re three years old and already a third of your life has been troubled with a mixed marketing message, what does that suggest going forward?

Taaffe’s got a rocky road ahead of him, for sure.

Good press or bad press aside, Groupon and its thousands of employees and millions of dedicated users aren’t going anywhere anytime soon. But taming the daily deal beast just doesn’t seem like a job anyone should embrace and revamping a website is just not enough. Public Relations leaders can only craft a message so far. Too much spin and a message – and a company – can spin out of control.

Let’s see what happens next.

An Organization With Terminal Cancer

The following article by Vanessa Horwell, Chief Visibility Officer of ThinkInk, originally appeared on Marketing Daily on 2/10/12.

Here’s something that almost anyone from any side of the political spectrum can agree upon: the past week has been heinous for Susan G. Komen. And it has shown that the organization most known for its staunch (some, like me, would say steamrolling) support for finding a cure and raising awareness for a single type of cancer -- breast cancer -- above any other has a cancer all its own. It’s a cancer common to any group that has become bloated with a false sense of self-righteousness and one whose arrogance and hubris causes it to stray from its stated (if overzealous) mission and become embroiled in a politicized mess.

What I'm talking about, of course, is this week's announcement that Karen Handel, Susan G. Komen’s vice president of public policy, jumped before she was pushed. A speedy resignation with no severance package, Handel excised herself from the organization before mounting pressure within the group would have forced her imminent departure.

Her resignation caps a week of intense public backlash over Susan G. Komen's decision to first cut and then hurriedly restore about $680,000 in funding to Planned Parenthood, a provider of reproductive health services, including contraception and abortions.

In her resignation letter, which has been posted on Forbes, Handel goes to great lengths to explain how the situation got so out of control. Her defense? Komen is in the business of saving lives. Anything that distracts from that goal is a disservice -- thus the decision to pull funding and divorce itself from a controversial organization that might be spending money illegally, like funding abortions.

In October 2011, during Breast Cancer Awareness Month, I wrote about how the "pinking" of America was diluting the message of curing cancer and replacing it with corporate capitalism and too much consumption. I also took issue with Susan G.’s near-bullying tactics as they related to how the fundraising and marketing gargantuan has left smaller cancer-fighting organizations to fend for themselves, and how they aggressively muscle out any group that seeks to challenge breast cancer as the only cancer worth raising money for.

This latest misstep only adds to my great concern that Susan G. Komen, for all the good it has admittedly done for breast cancer awareness, has become a monopolistic and politically compromised organization. If she were alive today, I wonder what Susan Goodman Komen -- whom the organization gets its name from -- would think. After what must have been a grueling fight for her life, finding a cure and staying true to the organization's mission and goals would be more important to her then whether or not grant money was going to another group similarly charged with helping save the lives of young, often poor women -- an organization that happens to provide abortions.

Letters of resignation aside, let's not forget that Karen Handel is a former Georgia Republican gubernatorial candidate, whose campaign promises included cutting funding for Planned Parenthood, and was Georgia's 26th Secretary of the State.

On Sunday, the Huffington Post reported that it had obtained an email exchange between Komen leadership confirming that Handel had the sole authority in crafting and implementing the Planned Parenthood policy.

Does this not have all the makings of a woman hell-bent on achieving a personal goal and using a behemoth organization which itself had become too politically connected, as cover to achieve her aims?

Yes -- the organization did reverse course in barely 72 hours, and restored the funds. It also made changes to its grant awarding guidelines that say only organizations under criminal investigation would be denied funding. But like a true cancer, this organizational one has already done much damage -- to those who truly believed in the structure of non-profits being “doers of good,” to those who held Komen as saviors of women, and to the brands who’ve invested heavily to be part of Komen’s shiny pink halo.

The upside to all this? Susan G. Komen’s misdeeds have opened up an enormous pathway for all the non-profits around the country, breast-cancer-related or not -- to start reclaiming their place in consumers’ hearts, minds and wallets.

And as for the PR advice, first administered by Ari Fleisher and now Ogilvy, all I can say is that it will take a lot more than some clever PR tactics and new positioning to rebuild this country’s trust in the Susan G. Komen brand and its “values.”

The following article by Vanessa Horwell, Chief Visibility Officer of ThinkInk, originally appeared on Marketing Daily on 2/10/12.