Poor AIG. It was just starting to get its mojo back, launching a new ad campaign to thank taxpayers for rescuing the firm in the darkest days of the financial crisis.
Then came the awkward news that it might sue taxpayers for driving too hard a bargain. Now the ad campaign seems dishonest and AIG is back in the headlines for all the wrong reasons. Could this train wreck have been avoided?
There’s nothing worse for an ad campaign than to be undermined by facts. That sort of thing reinforces the cynical suspicion that advertising is insincere gloss – a lot of good-looking camouflage over an ugly reality.
This situation is even worse if you’re a damaged brand in the midst of a recovery. And AIG was about as damaged as a brand could get. Its name was shorthand for recklessness and failure. But AIG has been on the rebound since bringing in a new CEO, selling assets and, just a few weeks ago, repaying its financial rescue at a profit for the U.S. Treasury.
But now comes the news that 
AIG might join the lawsuit against the Treasury brought by its former chairman, Hank Greenberg (see an earlier post on him here), who alleges the terms of the government’s bailout were too harsh. So much for the gratitude expressed in those shiny new ads.
This isn’t the first time a financial company’s advertising has run off the rails. Who can forget the “Higher Standards” tagline from Bank of America? While that slogan blared from billboards and television commercials around the country, BofA was cutting corners in its mutual fund business. When those practices came to light, it turned out BofA’s standards weren’t so high after all.
For AIG, the slogan isn’t quite the problem. In fact, its ad campaign is pretty good. It has a clear message that’s supported by facts (AIG did repay taxpayers, at a profit), and its tone is direct and accessible.
The problem is AIG’s timing, and for that we can blame its management, not the ad agency.
How was it possible that no one saw these two trains – a bold ad campaign and a controversial court case – running toward each other? Did anyone urge CEO Robert Benmosche to apply the brakes and defer the start of the new ads?
AIG’s structure might be part of the problem. In many big companies, the marketing department handles advertising, and once an ad campaign is approved by senior management it takes on a life of its own. Most insurance-company CEOs don’t really understand advertising and few have strong backgrounds in marketing, so they’re happy to remove themselves from its details. But details matter, especially when it comes to the timing of a new campaign.
Executives near Benmosche were watching the lawsuit; other officials knew about the ad campaign. But would they have spoken to each other? And would they have been able to identify the risks involved? The general counsel and the senior communications officer probably watch the lawsuit closely. But a developing ad campaign, maybe not. And the chief marketing officer would be involved in the ad launch but probably wouldn’t know about the lawsuit. Still, it’s hard to see how a these issues would have been completely overlooked during a management meeting.
Or maybe senior AIG executives knew about both the ads and the lawsuit and didn’t see the risks. That would be surprising, but it’s possible.
Of course, it’s also possible AIG could have resolved its position on the lawsuit before the campaign launched, but presenting such an important and complex issue to its board of directors would take time. And while ad campaigns often develop momentum and urgency, especially from ad agencies that get paid when their work shows up in print, pushing back a launch by few weeks is fairly easy to do.
But no one slowed the train, and now AIG is dealing with the aftermath – looking like the most ungrateful recipient of taxpayer generosity in corporate history.