Groupon’s PR Blunder

In an March 2012 PR Daily blog post, Keith Trivitt, associate director of public relations at the Public Relations Society of America, wrote about the perception of Groupon’s PR response as “amateur.”

A Groupon executive responded to a question from a reporter at the Financial Times regarding accounting irregularities Groupon has faced by saying,

“People forget we’re a new company. It’s one of those things where, OK, we’re still growing up as a company. Now that we figured that out, there’s no reason to think it’s going to happen again.”

Trivitt remarked, “I’m not sure whether to laugh or cringe in embarrassment at this bizarrely amateur statement. Worse is that it was made to the Financial Times (FT), a newspaper read by investors and business executives. The very people Groupon can least afford to offend by its confusing messaging.”

Trivitt makes great points like the fact that the company is not really that young when it has gone public with a $17 billion valuation, and amateur remarks from the corporate communications team such as “we’re young” are not comforting to shareholders and investors.

Groupon stock, which went public on NASDAQ in November 2011,  closed at the lowest level since IPO, according to an Associated Press article. The company revised its fourth-quarter earnings, and Groupon now faces a shareholder lawsuit and a possible review by federal regulators.

Trivit said that Groupon hired Paul Taaffe, the former chairman and chief executive officer of public relations agency Hill & Knowlton, as its new vice president of global communications in February 2012. Trivitt questioned the nature of the PR response in relation to Taaffe’s level of knowledge and skill in corporate communications.

While I agree with Trivitt on several points, I have to wonder about  the effectiveness of Groupon’s communication team when there are serious issues in the accounting department. Is there a way for the communications and accounting departments to work in a more integrated manner?

 

 

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1 Response to Groupon’s PR Blunder

  1. lzimmel says:

    While I agree that it is important for the communication and accounting departments to work in a more integrated manner, I do not believe that the statement released should be blamed on this issue. It is important for CEOs and executives to fully understand what is occurring in the company at all times. The executive that released this statement should have been educated about what was happening and should have released a more appropriate statement as well. It is more common for CEOs and executives to be younger these days and our generation is more relaxed and casual. With this said, they still need to understand that they are representing a professional organization and they need to be careful with how they are portraying the company.

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