Kelly O’Keefe and Matt Williams, managing partners at Brand Federation, just returned from the North Pole and final discussions with St. Nick about the second most famous Naughty & Nice List – the one for the world’s brands.
With Santa busy keeping his eyes on children’s behavior 24/7, O’Keefe and Williams use their decades of experience running successful brand, advertising, and marketing agencies to keep watch on the behavior of brands, which, unlike a child’s grocery store temper tantrum, can impact billions of people.
2022 was no exception. But this year, Brand Federation observed that much of the year’s naughty and nice brand behavior seemed unusually linked to the conduct of the extremely wealthy individuals representing them. Billionaires who behaved badly took the spotlight in 2022, and their behavior underscored a timeless lesson about the brands they represent.
The world’s richest man, Elon Musk, created a $44 billion cash bonfire by buying and systematically destroying Twitter.
Users and advertisers have left in droves after his takeover introduced chaos. His actions correlate with the decay of another Musk brand, Tesla, which lost over half its value in 2022, costing investors more than $500 billion. Musk, craving attention and throwing around huge money, has become synonymous with the Twitter and Tesla brands, and his behavior – firing critical staff, reinstating banned accounts, blowing off content moderation, tweeting a photo of guns on his nightstand – does no favors for them.
“Musk could have done so much good with his billions and the reach of a brand like Twitter,” O’Keefe said. “At this point with Twitter, he’s vaporized both. Musk may still redeem himself, much like Steve Jobs did after bad workplace behavior forced an exile from Apple, which he returned from humbled.”
FTX, the $32 billion cryptocurrency exchange founded in 2019 by Sam Bankman-Fried, or SBF as the 30-year-old is known, blew up spectacularly in November. SBF failed to disclose and covered up the exchange’s use of customers’ money to bail out the shaky investments of an affiliated firm. The high-flying FTX brand represented the revolutionary future of digital currency until one billionaire’s ignorance (or fraud?) brought down not only the FTX brand but also damaged trust in cryptocurrencies’ brands. Bankman-Fried was arrested in the Bahamas in December. Brands built on false promises don’t stand long.
Elizabeth Holmes, a self-made billionaire who served as CEO of Theranos, built the company into a promising brand – on a foundation of lies. Holmes positioned the company’s blood-testing technology with investors and prominent business media as an incredible advancement, attracting nearly $1 billion from investors and reaching a valuation of more than $10 billion. But, the technology was make-believe, the media appearances fiction, and the brand a fraud. It collapsed because of dishonesty, lack of transparency and overall bad behavior at the top, and it earned Holmes an 11-year prison sentence this year.
Ben Horowitz, cofounder and partner at the venture capital firm Andreessen Horowitz, put his firm’s savvy innovation-funding brand at risk by backing another billionaire bro, Adam Neumann, with $350 million for Neumann’s new venture, Flow, which has yet to open its doors. Neumann’s last venture? WeWork, which collapsed and lost investors $45 billion. In the rarified air of the one percent of the one percent, accountability for destroying capital and livelihoods apparently doesn’t matter if another roll of the dice is possible.
In a year of lies, cringeworthy decisions, and bad behavior, Ye, formerly the artist known as Kanye West, said: “Hold my beer.” Forbes valued the award-winning music producer’s net worth at more than $1.8 billion earlier this year. However, his recent vocal and public antiemetic rants, have cut it to around $400 million as fans, followers, and affiliated businesses abandoned ship, including Gap, Balenciaga, CAA, JPMorgan Chase, Peloton, Foot Locker and, finally, Adidas.
The Washington Commanders may have a chance to make the NFL playoffs, but the face of the team, billionaire owner Dan Snyder, continues to generate bad press, legions of disgruntled fans, and enemies in NFL circles.
Investigators accuse him of condoning a toxic work environment and sexual harassment. The team faces allegations of withholding millions in security deposits from season ticket holders and special event ticket sales from the league’s revenue-sharing program. It’s a tradition of bad-brand behavior that started when Snyder purchased the team in 1999 and refused to acknowledge Native American concerns with the former name – Washington Redskins. Only the social unrest of 2020 and the resulting economic pressure on the team forced Snyder to change the name. The Commanders’ brand deterioration may force the NFL to make a change, too, and jettison Snyder.
Like the brands topping the naughty list, most of the brands leading the nice list are there because of the behavior of extremely wealthy representatives. These leaders, however, know how to use their incredible monetary power and influence to build brands that bring light to the world, not just to themselves or their brands.
Patagonia’s founder, Yvon Chouinard, built a worldwide brand known for sustainability. This year he put his company where his mouth is, donating it to fight climate change. Chouinard transferred his ownership in the outdoor apparel company, valued at $3 billion, to a trust designed to protect the company’s independence and donate its profits – often north of $100 million annually – to protecting our planet. Brands built on purposeful behavior endure.
On the heels of donating significant dollars to fund COVID-19 vaccine research, global country music icon and entrepreneur Dolly Parton launched her Doggy Parton collection of pet dog accessories, merging her love of animals with her can-do philanthropy. A portion of every sale supports animal rescue efforts. It’s a new brand sustained by the generosity and reputation of its patron. Even Amazon’s founder Jeff Bezos recognized the power of Dolly Parton, writing her a check for $100 million to spend on charitable causes.
Eileen Fisher built a fashion empire that supported more realistic apparel for women of every age and body type. Consumers revere the company for pushing away from disposable fashion and leaning into sustainability. And instead of taking her company public, she began transferring ownership to employees in 2006. Today, as Fisher steps away from the brand’s leadership, employees own nearly half the company.
Honorable mentions to the 2022 nice list include some unexpected brands that caught Brand Federation’s attention. One has returned to making massive contributions to humanity’s understanding of the cosmos, and the other is laser-focused on a mission to make us a less wasteful species.
The National Aeronautics and Space Administration’s James Webb Telescope completed its tests and began operations in July. In October, the agency confirmed the success of its Double Asteroid Redirection Test (DART), knocking an asteroid 7 million(!) miles from Earth off its trajectory. And in November, Artemis I, the biggest rocket in the agency’s history, lifted off on a moon mission, paving the way for humans to return there in 2025. The space agency also helps the scientific community understand how climate change affects the planet and informs adaptation and mitigation strategies. The NASA brand is again sparking inspiration and pride at a time when the nation needs it.
Usage of this app continues to grow internationally with a focused mission and clever use of technology to fight food waste. This app allows restaurants, bakeries, grocery stores and other food preparers to find customers for leftover, expiring or misshapen food otherwise destined for landfills. App users find great meals and food at deep discounts, restaurants earn revenue for what would otherwise be trash and the planet breathes easier. Nice!
“Brands are built or destroyed by their behavior,” O’Keefe says. “When behavior aligns with brand conviction, the brand, its customers and the communities it serves can all benefit. When the behavior is nefarious, brands are destroyed, value is destroyed, consumers suffer, companies crumble, and people go to jail.”
Williams added, “Beware the ‘brand of personality,’ too. When the person becomes bigger than the brand, and that person goes off the rails, they’ll take the brand with them.”
For brands, substance always outdoes sizzle. Unicorns are fantasy. It is better to give than receive. And Santa (thanks to O’Keefe and Williams) is always watching.
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