article

06.22.10

Obama's Tarnished Brand

The BP spill is tarring the president's good name. Lloyd Grove talks to a Harvard Business School marketing expert on how Obama can salvage it—and what he can learn from Toyota.

Two months after BP’s Deepwater Horizon oil rig exploded and sank to the bottom of the Gulf of Mexico, the spill gushes apace on live television, a mile below the ocean’s surface. Could that alarming image be a metaphor for President Obama’s submerged political capital draining away at warp speed?

“An oil-saturated pelican is perhaps even more powerful,” says Harvard Business School marketing professor John A. Quelch. “There are simply some crises that produce some images that no amount of presidential eloquence can compete with. You have a president versus pelican situation at this point, with no sure prospect in sight of an end to the bleeding.”

“There are simply some crises that produce some images that no amount of presidential eloquence can compete with,” Quelch says.

Quelch, an expert in the development and durability of brands in the marketplace, has written extensively about “Brand Obama,” both as candidate and as chief executive. “Can Brand Obama Rescue Brand America?” is the title of a recent essay Quelch co-authored in Brown University’s Journal of World Affairs. (Departed White House social secretary Desiree Rogers was clearly on to something when she touted the “Obama Brand” to The Wall Street Journal, notwithstanding political guru David Axelrod’s reprimand that the president is a person, not a brand.)

“Basically, when we talk about a brand, we’re talking about trust,” Quelch says. “A brand—whether it’s an individual or a product—earns its brand reputation on the basis of trust on the part of citizens or consumers.”

In his November 2008 essay in the Harvard Business Review, “How Better Marketing Elected Barack Obama,” Quelch cited “Obama's personal charisma, his listening and public speaking skills, his consistently positive and unruffled demeanor and his compelling biography” as components of a brand that “attracted the attention and empathy of voters.” He added that “Obama chose an excellent marketing and campaign team, and managed them well. From start to finish, there was no public dissension.”

But nearly two years later, the marketing challenge for President Obama is far more complicated than for candidate Obama. “It’s rather like the difference between someone who plays tennis and someone who jogs,” Quelch says. “There are some people who are terrific tennis players but hopeless joggers, because they have to have an opponent on the other side of the net. Then there are people who are terrific joggers and can assume and sustain a lead over the course of a marathon…The ‘brand-management task,’ if I can use that phrase, requires more subtlety. When you’re president, you don’t face off against a competitor against which to market yourself. In fact, to market your brand against the Republican brand every day would be to elevate the opposition and give them a platform greater than they otherwise would receive, and it’s not advisable to do that.”

Arguably, BP’s apparently clueless chief executive, Tony Hayward, has served as an effective foil for Brand Obama. “That’s an advantage the president has in this situation—the benefit of Mr. Hayward as the faceoff competitor,” Quelch says. “Hayward’s management of public perceptions has been lamentable in the extreme. The $700,000 yacht has not yet loomed into the Obama recreational repertoire.”

Still, Quelch says Obama should be doing more to strengthen his brand amid a sea of troubles. “I would have wished for him, and perhaps of members of his family, to be spending more time down in the Gulf region. I think there are opportunities. A cosmetic photo opportunity would result in a greater level of perceived empathy on the part of the folks down there—not just for the president but for the first family—and set an example of how people in other parts of the country could potentially become engaged in helping deal with this crisis.”

Quelch warns that “after you are elected, you are only as good as the product and performance you deliver, and the brand promise has to be lived up to. If the promise has been very substantial and the performance has been average, that’s going to put you in a bigger hole than if the promise was modest and the performance has been average. Individual citizens run, if you like, a gap analysis on promise versus performance.”

As Obama labors to close the gap and dislodge the oily globs from his public image, he would do well to consider the contrasting cases of Suzuki and Toyota, Quelch says. Both Japanese car companies suffered massive PR damage in the United States market after widespread media reports of mechanical and design failures. In last year’s Toyota troubles, the problem was unanticipated acceleration; with the once-popular Suzuki Samurai in the late 1980s, it was a tendency to roll over on sharp turns. But these days, Toyota is widely expected to recoup its losses, while Suzuki’s U.S. business barely has a pulse.

“The satisfaction ratings of brands go up and down in the commercial marketplace, just as they do in politics,” Quelch says. “The satisfaction ratings of Toyota obviously have gone down in their current predicament, but there is long-term brand equity which sustains Toyota through a difficult period. Toyota is far from permanently wounded. Before the crisis, Toyota had 30 years of performance in the U.S. and millions of satisfied customers. Brand equity is a reservoir on which you can draw to inoculate yourself against precisely this sort of crisis.”

But Suzuki’s troubles were a different story—“a very good counter-example,” Quelch says. “When the Samurai was launched, it became the biggest-selling import in the first year after its launch in history. I have no evidence for this, but I suspect that our friends in Detroit thought they’d rather like to teach these guys a lesson, and so they developed the ‘rollover issue’—even though many of their vehicles were even more egregiously failing in those safety tests than the Suzuki Samurai. The bottom line is that Suzuki never recovered.”

The question for Obama: Is he Toyota or Suzuki?

“We all know that a president’s highest approval ratings are typically on his arrival in office,” Quelch says, “and at that moment there is a reservoir of brand equity that has been bestowed upon him by the electorate that, over time, gets depleted. The big question for Obama is whether or not the leakage can be staunched, and how much brand equity is going to be depleted.”

Quelch guesses there’s a very limited timeframe within which the BP gusher must be plugged, or else it will indelibly stain Brand Obama and taint his fellow Democrats going into the 2010 midterms.

“The deadline articulated by BP has been August, when the alternative well will have been drilled and become operational, but if that were not a credible deadline, the Obama administration should have already hedged its bets,” Quelch says. “I have heard notions in some quarters that the deadline could slip into November or even December. I think that if the leak is not stuffed by November 1, it certainly could be a significant issue in the minds of voters as they go into the polling booths. Even if they are not affected directly because they live in the Gulf region, there will be small but significant reminders of failure—the absence of Gulf shrimp in restaurants, for instance—that can potentially be exploited by Republican candidates.”

Lloyd Grove is editor at large for The Daily Beast. He is also a frequent contributor to New York magazine and was a contributing editor for Condé Nast Portfolio. He wrote a gossip column for the New York Daily News from 2003 to 2006. Prior to that, he wrote the Reliable Source column for the Washington Post, where he spent 23 years covering politics, the media, and other subjects.