From the article: “USAA told ABC News that it aired ads on the three shows by accident, . . .”
Having been the client of a large advertising agency and having approved media plans and advertising buys for large corporations the “accident”, “mistake”, or “misunderstanding” excuse is not believable to me. USAA spends tens of millions of dollars on advertising (over $100 million annually by some accounts. No corporations makes expenditures of this size without several control points for management review and approval.
Advertising buy plans (media plans) are developed by an advertising agency and reviewed with management of the client company well in advance of the actual ad buy. The plans take into account company policy — if the company policy says no political ads, no political ads are presented by the advertising agency when it makes its recommendation. In addition companies often have special requests — they may ask for no advertising to be placed on a particular network or they may ask for extra weight on a particular show or against a particular demographic. The agency creates the plan and recommends a buy based on all of these criteria. Should the agency recommends a buy involving an exception to company policy and direction, that exception is called out clearly in the presentation of the plan and must be approved by company management.
When plans are presented to middle management at the client company, more than one member of management sits in the presentation so a “new employee” would not be able to approve the plan. The review is conducted program by program so anyone with knowledge of company policy is in a position to object should a show be recommended inconsistent with policy.
Once the plan is vetted by client company middle management, it is presented to executive management in detail. I’ve sat through many of these senior management review meetings and have found senior executive scrutinize the buys in details and ask many questions. After all, a significant amount of money is involved. It is not uncommon for the CEO or COO to approved the final plan, not just the executive responsible for marketing.
At the point the media plan is approved by the executives of the client company, there have been at least 3 review points — the advertising agency itself, company middle management, and company senior management. If the plan is changed after this point, those plan changes also have to be approved by company management. However, there is an additional check.
At the time the advertising is actually purchased, the agency will submit sign-offs for the buy itself. These sign offs are essentially purchase orders, an authorization to actually make the purchase of each individual program. These authorizations are not delegated to new or inexperienced employees as they involve the expenditure of millions of dollars. Minimally seasoned marketing managers or executives sign these authorizations. It is inconceivable the managers or executives signing the purchase authorizations have no knowledge of company policy.
I am a 30+ year member of USAA. I’m sad to say my personal experience as a senior marketing executive, and corporate COO, makes it difficult to believe the purchase of millions of dollars of advertising conflicting with company policy could have been a “mistake”.
The only instance I can think of in which an advertising buy can be a mistake is if USAA management has been negligent and not properly reviewed the buy. If it is the case millions of dollars of company money has been misappropriated, the executives responsible should be fired.
The explanation appears to be an obfuscation, a desperate attempt to kill a controversy without admitting the truth. To anyone with knowledge of the advertising buy process there are only two possible explanations:
1) USAA management’s explanation was correct, the buy was a mistake. If so, management is admitting its internal control processes are weak, being ignored, or begin circumvented and millions of dollars are being spend by the company without proper review and approval. In this instance, management is admitting incompetence and should be fired.
2) USAA management approved the ad buys on Hannity, Maddow and other shows. USAA managers approved the individual program authorizations at the time the media was purchased. Media Matters then put pressure on USAA management to pull the advertising it had approved and management caved to the pressure of outside social activists. When policyholder owners expressed outrage, the company floated the “mistake” explanation in an effort to quell the public relations crisis. If this is what really happened, the company’s management deliberately lied to its policyholder owners and should be fired.
At this point USAA management lacks credibility with many of its policyholder owners. Those owners are expressing outrage in social media and directly to management. Many are choosing to take their business to other companies. To restore credibility USAA needs to provide a detailed explanation of what exactly went wrong internally. If management succumbed to outside pressure, it needs to admit it. If an internal policy was violated there needs to be a detailed explanation of how the company control processes were violated and the managers involved must be fired for incompetence or deliberate violation of policy.
Note that as of 10:30 am Sunday morning, USAA management has not issued a communication to the member owners addressing a significant public relations crisis that has been discussed in the media for several days. If management should be trusted by the owners, why no communication?
I am disappointed with USAA and I am almost a 35 year member. My whole family is with USAA - my parents are half-century members.
The whole point of USAA was that it was a select group of low-risk members. The expansion, massive advertising push, and the big growth has done little (that I can see) to benefit the member/owners. It appears from the outside looking in that the growth is to benefit the board and executive staff - not the members. Our checks seem to have decreased every year and our costs have risen from my viewpoint. The insurance is great, but it is not as competitive as it used to be.
I am willing to give them the opportunity to explain what is going on and I am waiting. My family follows our principles in our business transactions. I don’t ask others to boycott or stop shopping anywhere, but we quietly have stopped doing so and I already think I can save far more than I receive back by switching insurance. The banking is a wash. USAA needs to slow down and realize that its uniqueness in the market is being destroyed by corporatism and much of the core membership is not very happy about it.
Thank you. I am a 26 yr USAA member and my Dad is a 52 yr member. We are both just apalled at this. We do EVERYTHING with this company. I don’t know what to do yet but I want an apology and a reversal along with some firings.