Marketers' Risky New Pitch: We'll Put America Back on Job
With zero new jobs created in August and 9.1% unemployment, job creation is the hottest topic in corporate messaging. Execs including Starbucks' Howard Schultz and Goodby Silverstein's Rich Silverstein are launching pledge drives to harangue Congress (Mr. Schultz) or get businesses (Mr. Silverstein) to add jobs. And companies such as AT&T and Amazon are making it part of their public-affairs efforts, putting jobs on the table as government bargaining chips and leveraging consumers as constituents.
But such efforts are not without their risks.
In the case of the pledge drives, the risks are minimal -- some egg on the face if the numbers are small (and they are). Mr. Schultz's UpwardSpiral efforts, announced last week, ask business leaders to promise to either "accelerate job creation," withhold contributions to political campaigns or do both. Mr. Silverstein's One Job for America, launched in February, asks business leaders to pledge just one job.
But in the case of Amazon and AT&T, the companies, by promising jobs that may be counteracted by layoffs or by threatening to take business out of states that don't play ball, create a real risk of consumer backlash -- especially if activists take the opportunity to whip up opposition.
AT&T, for example, is promising the creation of 5,000 jobs if the government approves its highly scrutinized $39 billion merger with T-Mobile. This promise was made the same day that the Department of Justice filed suit to prevent the merger.
But a layoff-less merger of this size would be a rare gem in the face of other giant mergers that have seen tens of thousands of layoffs. Reuters had reported that JPMorgan Chase & Co. said it would cut 12,000 jobs when it acquired Washington Mutual in 2009, and Cingular Wireless had said that it would cut 7,000 jobs when it acquired AT&T Wireless in 2004.
Anti-merger activists were quick to point this out. Harold Feld, legal director of activist group Public Knowledge, said of the DOJ move to block the merger: "Fighting this job-killing merger is the best Labor Day present anyone can give the American people."
Even if the AT&T-T-Mobile merger "creates" 5,000 jobs in one area, they likely won't balance out the effect of imminent layoffs which, according to tech analyst Jeff Kagan, could easily exceed the 5,000 mark.
"It's a way to twist the government's arm to say, 'It'll be beneficial in the job market,' but we realize what that means is it won't be as harmful as it originally would have been," he said.
Another anonymous public-affairs executive said, "It's difficult to argue that a merger will create jobs when most mergers do result in layoffs, as companies can reduce redundant positions. I'm not sure that is their best argument."
Especially in a down economy and acrimonious political climate in which job creation is front and center. Promises of job creation could potentially damage corporate reputation. And the negotiations around political deals could be perceived as holding jobs hostage.
For example, Amazon had promised California thousands of jobs if the state threw in the towel on its attempt to impose an online sales tax. The reverse implication, of course, is : no tax break, no jobs.
In a previous scuffle with South Carolina, Amazon pulled the plug on a fulfillment center slated to open in the state after a tax exemption for the company was voted down. Seeing that the company wasn't bluffing about making 2,000 jobs disappear, the state, which had previously given Amazon free land and reduced property taxes, reversed course, despite many in the opposition, including Republican Gov. Nikki Haley portraying the company as a bully.
"Amazon has to be careful," said Brendan Daly, exec-VP and national director-public affairs for Ogilvy, Washington. "You have to be careful not to position yourself as threatening. You have to say, we're trying to expand here, create jobs, and this rule could affect our ability to do that ."
Ben Boyd, global chair of Edelman's corporate practice, said the jobs message is at the core of more clients' campaigns than ever before, and he attributes the trend in part to political turmoil.
"We're seeing partisan bickering at a more intense level and the lack of a solution out of Washington," he said. "Consumers are looking for a reason to believe so [brands are saying], if over the course of my public dialogue I can bring that reason to them, i.e. job creation, that 's only a positive."
The job-creation argument, of course, is nothing new in more controversial sectors. The American Petroleum Institute, one of many marketers that in the past launched jobs-themed ad campaigns, leveraged the message via a public-affairs play a day before Barack Obama made his highly anticipated speech on the topic. The trade group issued a release on a study it commissioned with Wood Mackenzie that found that expanded offshore drilling options and fewer regulations on controversial shale gas extraction, among other policy amendments, could create 1.4 million new jobs.
Mike Lake, chairman of the U.S. public-affairs practice at Burson-Marsteller Southwest, said that for a new client (an undisclosed gas-powered plant), the public-affairs team responded to local opposition voicing concern about the plant's water source and obstruction of home views with a message about creating a number of pre- and post-construction jobs -- jobs that would then equate to more local tax dollars and community health.
"There's a powerful argument to have there," he said.