A Last-Place Finish at the Kentucky Derby
By now, most people who follow marketing have heard how Yum Brands CEO David C. Novak stepped up to the microphones after the 2008 Kentucky Derby and spoke glowingly of the event and his company’s famous brands – Taco Bell, Pizza Hut, KFC, Long John Silver’s and A&W – while a stunned national television audience looked on.
The grinning Novak seemed oblivious to the fact that second-place finisher Eight Belles had just been euthanized after breaking down at the end of the race. Immediately, the bloggers hammered Novak for his apparent insensitivity – as the value of Yum’s sponsorship of the prestigious sporting event began to evaporate.
Bob Costas of NBC said he told Novak and others at the winner’s circle of Eight Belles’ fate. But Yum Brands executives disputed Costas’s account and insisted Novak had no idea the horse was dying. Knowing how careful corporations like Yum Brands are about such matters, we have no doubt Novak was caught unaware and would have modified his remarks if he had only known about Eight Belles’ fate.
Who’s to blame for the catastrophe and what can we learn from it? Here are key points to consider:
1. A sponsor pays for an event and is therefore The Boss. The first rule for an employee is to make sure the boss isn’t embarrassed. Thus, NBC bears responsibility for ensuring Novak was informed of the tragedy before he stepped onto the podium to address millions of viewers. NBC failed on this point.
2. A corporation in today’s world must be vigilant, nimble and responsive to all activities on the Internet, where today’s brands now live and die. A simple, well-timed and heart-felt apology could have salvaged the value of the sponsorship. Yum Brands was deficient on this score.
3. This brings us to the most important lesson of all – big companies must now be prepared to act quickly, and if possible, in real time, to deflect Internet blog and web site attacks and criticism. The world is moving at hyper speed. There is no second chance.
