BURSON-MARSTELLER & FACEBOOK: A CAUTIONARY TALE By: Alexandria Chong, Nailah McKesey, Nicole Troelstrup, Greg Wilson & Ni Zeng

Agenda

1. Background Information2. Two Tech Giants Compared3. Case Description and Responses4. Evidence5. Ethics Comparison6. Our Verdict7. Q&A

THE MAJOR PLAYERS

Burson-Marsteller

Founded in 1953 by Harold Burson and William "Bill" Marsteller

One of the “Top 5 PR Firms” Operating in 67 wholly owned offices and 71

affiliate offices 98 countries across 6 continents Owned by WPP – Wire and Plastic Products

What are they about?

"We have a clear vision: To provide gold standard performance - for our clients, our

people and our shareowners - as one seamless, global business with a single

culture.“

Google

Founded in 1995 at Stanford University by Larry Page and Sergey Brin

Top used search engine Named after “Googol” - a term defined as the

number 1 followed by 100 zeros representing “a nod to the company’s vast goal of organizing all of the internet’s data”

“Don’t Be Evil” – mantra explaining their relationships and view of competitors

What are they about?

"Don't Be Evil" Originally stated by two Google employees

Buchheit and Patel

Facebook

Founded in 2004 by Mark Zuckerberg Top used social networking service In September 2012, had over one billion active

users In a study in December 2011, Facebook is the 2nd

most accessed website in the US Users create a personal profile, add other users as

friends, exchange messages

What are they about?

"Facebook's mission is to give people the power to share and make the world more open and connected.”

The Two Tech Giants Compared

Facebook has risen to become the second-most important online property, behind Google.

Undermines Google’s communication tools.

Could jeopardize Google by developing its own search capabilities

Dominates search advertising: 65% of U.S. market and more than 50% of the global market

Reaction to Facebook: Launches Google+

A $40 billion company built on innovation and execution in advertising

Facebook Google

WHAT HAPPENED?

1. Burson-Marsteller aims at getting newspapers to run stories about how Social Circle infringes on privacy and violates FTC rules

2. Spearheaded by B-M’s Jim Goldman and former political columnist John Mercurio on behalf of an unnamed client

3. Goldman and Mercurio began engaging reporters and technologists

4. Mercurio offered to help a blogger…

5. And the blogger turned the tables, posting Mercurio’s embarrassing email pitch online

6. A few days later, USA Today broke the story

The Smear Campaign

Google’s Response

"We have seen this email reportedly sent by a representative of the PR firm Burson-

Marsteller. We're not going to comment further. Our focus is on delighting people with

great products.”

Burson-Marsteller’s Response

“Whatever the rationale, this was not at all standard operating procedure and is against our policies, and the assignment on those terms should have been declined. When talking to the media, we need to adhere to strict standards of transparency about clients, and this incident underscores the absolute importance of that principle.”

Facebook’s Response

"No 'smear' campaign was authorized or intended. Instead, we wanted third parties to verify that people did not approve of the collection and use of information from their accounts on Facebook and other services for inclusion in Google Social Circles—just as Facebook did not approve of use or collection for this purpose"

MERCURIO’S E-MAILS REVEALED

BURSON-MARSTELLER & FACEBOOK

CODES OF ETHICS

Facebook vs. Industry StandardsLeading Tech Companies Honesty and Competition

Facebook “Facebook personnel must always abide by laws related to competition... including predatory conduct intended to exclude a competitor from a market"

Linked In "LinkedIn employees are expected to act and perform their duties ethically, honestly and with integrity - doing the right thing even when "no one is looking."

Google "We respect our competitors and want to compete with them fairly. But we don’t want their confidential information. The same goes for confidential information belonging to any Googler’s former employers.”

Burson-Marsteller vs. Industry Standards

Public Relations Codes Honesty and Transparency

Burson-Marsteller We will not undertake work which is intended or designed to mislead, including in relation to social, environmental and human rights issues

Arthur W. Paige Society Tell the truth

PRSA We adhere to the highest standards of accuracy and truth in advancing the interests of those we represent and in communicating with the public

UNETHICAL OR NOT?

The Charges…

1. Facebook and B-M launched a smear campaign: a campaign aimed at damaging someone's reputation by making accusations and/or spreading rumors.

2. The smear campaign included false and inaccurate information.

3. The campaign was used to gain a competitive advantage.

The Verdict…

On the whole:Unethical and Not Very Smart

PRSA CEO/Chair Weighs In:http://www.prdaily.com/Main/Articles/8232.aspx

Q&A

Thanks for listening!