Brand Promise Failure - Rupert Murdoch, News Corp, Perez Hilton and Shaving Cream Pie

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Posted Jul 20, 2011
Susan Gunelius

What do Rupert Murdoch, News Corp. Perez Hilton, and shaving cream pie have in common?

I bet you never thought you'd hear those 4 things in the same sentence.

Rupert Murdoch

Mark your calendars because July 19, 2011 is a day that will go down in history and is certain to appear in a Hollywood movie in the future. It's the day that the News Corp. brand promise failed, Rupert Murdoch's personal brand took a beating in front of British Parliament and with a shaving cream pie to the face launched by a protestor, and Perez Hilton blogged about it on his celebrity gossip blog.

These are the things movies are made of.

But in the meantime, the News Corp. brand and the Rupert Murdoch brand are in trouble because both broke their brand promises to consumers -- to legally investigate and report news. Just last week, the News Corp.-owned British tabloid News of the World phone hacking scandal burst and as Rupert took his seat in front of Parliament, the world watched and waited to see if the brand promise could be revived.

Has News Corp. really jumped the shark as Robert Teitelman reported on the Huffington Post? If Bloomberg's report of dropping stock prices, calls for Murdoch to step down as CEO, and rumors that News Corp. would be worth more if it was sold in pieces than kept intact are accurate, then we could be witnessing Rupert Murdoch jumping over a shark on water skis while wearing a leather jacket, white T-shirt and swim trunks just like the Fonz did in that famous episode of Happy Days. If you're too young to remember, check it out below.

On second thought, let's not imagine that.

Truth be told, this isn't the beginning of the end for News Corp. as we know it. In fact, it could be argued that the red flags were raised years ago when News Corp. paid $580 million for MySpace in what seemed like a desperate attempt at the time to gain a foothold in the digital space. That's a goal the company was still trying to meet this week with a proposed purchase of British Sky Broadcasting Group that collapsed on this same day in history -- July 19, 2011.It has been estimated that Murdoch's own family has lost $1 billion since the News of the World scandal broke. Since the family owns the majority shareholder vote in News Corp., the Rupert Murdoch personal brand is the one that is likely to suffer the most in the short term. In simplest terms, this is a journalism brand that has lost sight of its brand promise in recent years under what appeared to outsiders the tight control of Rupert Murdoch. News Corp. turned to tabloid-fodder, political-rhetoric, and misguided digital tactics, which dominated the brand's image. Even the Bancroft family who sold the Wall Street Journal to News Corp. for $5 billion in 2007 is coming forward to The Guardian and ProPublica stating they regret that decision having watched Murdoch and News Corp. turn the paper into more of a political tool and less of the financial and business product that was its mainstay for generations.

Truth be told, Murdoch is fighting a 2011 battle for consumer eyes and ears, and he was losing long before the News of the World scandal broke.

I wrote a book about the Playboy brand and Hugh Hefner as the ultimate brand champion. Rupert Murdoch's struggle to stay relevant in recent years reminds me very much of the Playboy brand story under the leadership of Hugh Hefner who was also the majority vote-holding shareholder while the company was public. The world moved away from print magazine to digital media, but Hef couldn't let that print magazine or his vision for the company and consumers go despite the changing world around him.

It could be argued that Rupert Murdoch and News Corp. are facing a similar battle.  As the Bloomberg article states, "Murdoch's attachment to newspapers, which has contributed to a 28% decline in operating income at News Corp.'s newspapers and information services unit in the past five years, has cost News Corp.'s shareholders billions of dollars."

As reported in AdWeek, Arianna Huffington of the Huffington Post talked to the National Press Club last week about how the News Corp. hacking story brought a massive amount of negative brand publicity from people talking about it on Twitter. News of the collapsed News Corp. brand promise spread through new media channels like rapid fire. Thousands of Twitter updates were published within hours and dozens of News Corp. advertisers stepped away from Murdoch's publications to avoid their own negative publicity through guilt-by-association.

However, the end isn't necessarily here for Rupert Murdoch and News Corp. Many brands have rebounded from scandal and come back stronger than ever. How many financial companies participated in the types of subprime lending that brought the U.S. economy to the brink of disaster but lived to not only tell the tale but get even stronger? BP may have been responsible for a huge oil spill in the Gulf of Mexico, but the company has begun drilling there again and seems to be moving on. It may have taken a government bailout to keep U.S. automakers afloat after years of poor decision-making, but today, those companies are reporting big profits.

At the other end of the spectrum are the Arthur Andersons of the world, but I'd imagine we won't be seeing the end of Rupert Murdoch or News Corp. in the near future. The ultimate configuration of News Corp. might change, but they'll live to see another day and the brand promise will be rebuilt. With honest and fast responses to the brand promise failure, the brand will carry on.

Now is the time for brand damage control. It's likely the News of the World phone hacking scandal won't be the end of the troubles for News Corp. Only actions can rebuild the trust in the brand promise that has been lost over the past week. Let's hope they're listening to consumer conversations because they need to get into the online conversation about the brand before it's too late.

What do you think? Can the Rupert Murdoch and News Corp. brands rebound? Leave a comment and share your thoughts.

Image: Flickr

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