Brand Blunders Of 2004.

Barbie and Wendy, two iconic American brands, stumbled badly this year and top the list of Biggest Brand blunders. If they can take comfort in anything, it’s that the gals are in good company, as they are joined by the likes of Anheuser-Busch, Merck and CBS in the 2004 branding hall of shame.

“You sometimes have to wonder if companies and organizations even take the time to think of how certain moves might affect their business,” said Kelly O’Keefe, chairman and CEO of Atlanta-based brand consulting firm Emergence Inc. “Building a brand can’t be done overnight, but as evidenced again this year, brands can be diminished or destroyed in an instant. Some of these mistakes might not come back to haunt the offenders, but some will have long-term consequences.”

For the second year in a row, O’Keefe has assembled his Hall of Shame, his Top 10 Biggest Brand Blunders of 2004:

Number 1: Barbie – Two days before Valentine’s Day, Barbie broke up with Ken after 43 years. The news prompted many to scold Barbie-maker Mattel for putting her values in question (she allegedly dumped Ken for an Aussie surfer dude) and selling out to make a buck. Shortly after, there was a Barbie for President campaign, and Mattel enlisted Barbie-esque Hilary Duff to be the official spokesperson for the toy wonder. The early results? Third-quarter Barbie sales were off by 13 percent. “I’m not sure that Mattel expected more hearts than just Ken’s would be broken,” O’Keefe said. “For one, Barbie and Ken together are iconic. For another, just look at the direction Mattel has taken Barbie recently. What parent wants their little girl playing with ‘Trashy Barbie’ or ‘Sleazy Easy Barbie?’ Mattel embarrassed itself with this move and tried to save some face by bringing in a bubble-gum pop princess. No dice.”

Number 2: Wendy’s – Fast-food giant Wendy’s introduced its first new spokesperson since Dave Thomas died in 2002. Well, sort of. The new spokesperson was the “unofficial spokesperson” for Wendy’s in a series of commercials that attempted to highlight the food in a light-hearted manner. In November, Wendy’s bagged the campaign. “No matter what Wendy’s does, people are still going to think of Dave Thomas,” O’Keefe said. “Mr. Wendy belittled that wholesome image and overshadowed Wendy’s food quality in the process. It was a misguided attempt at being cute when Wendy’s needed to remind consumers that its food is still better than the competition’s, despite recent focus on health and quality at McDonald’s and Burger King.”

Number 3: Merck – The second-largest U.S. drug maker fell on terrible times in September when it pulled its painkiller Vioxx in the biggest prescription-drug recall in history. In addition to trying to find a way to make up for $2.5 billion (or 11 percent) in Vioxx sales, Merck faces hundreds of lawsuits (with more on the way), the SEC has begun inquiries and industry analysts report the recall may cost it as much as $18 billion over the next 10 years. “What damages Merck the most is the question of what the company knew and when,” said O’Keefe. “It apparently ignored some of the warning signs an underestimated the challenges it faced. This likely is going to get very nasty, and odds are good the public will have a long memory.”

Number 4: American athletes – The sporting year got off to a bad note with the Super Bowl, where the NFL was dragged down by a halftime show “wardrobe malfunction.” Then, NHL players and management couldn’t get together on a new collective bargaining agreement, which caused the cancellation of games and possibly the entire season. The NBA’s black eye came when Indiana Pacers players brawled with Detroit Pistons fans just as some were forgetting the Kobe Bryant rape case. And Major League Baseball was rocked as superstars Barry Bonds, Jason Giambi and Gary Sheffield all became embroiled in a steroid controversy. Oh, and not to be outdone, Olympic stars Marion Jones (steroids) and Michael Phelps (DUI) had their own troubles. “In what should be remembered as the year of the Red Sox, sports fans big and small were entertained with some of the most horrible on- and off-field antics in recent memory,” O’Keefe said. “Athletes are brands – individual brands and brands representative of their teams and leagues. Cynical fans again are wondering why they should pay to watch these bozos.”

Number 5: CBS – At halftime of one of the best Super Bowl games in history, Janet Jackson experienced a “wardrobe malfunction” that won’t soon be forgotten. CBS, which broadcast the Super Bowl, was caught in the crossfire and hammered in the days, weeks and months following the game and ultimately fined $550,000 for its role. Then, there was Dan Rather and CBS News’ report questioning President Bush’s Air National Guard service. After mounting pressure, an egg-faced Rather apologized 10 days later. Later in the year, the 73-year-old announced his retirement. “Granted, CBS has done well with TV ratings, but these two incidents made the network a laughing stock,” O’Keefe said. “The Super Bowl theatrics changed live TV as we know it, and Rather’s gaffe was a blow to his and CBS News’ credibility.”

Number 6: Anheuser-Busch – The maker of Budweiser and Bud Light got a little perturbed when SAB Miller, the parent of Miller and Miller Lite, said it was un-American to call itself the “king” of beers. Anheuser-Busch countered with a “queen of carbs” campaign, and the feud was on – even in the courtroom. Miller Lite ads began promoting better taste, a la the Pepsi taste test. Anheuser-Busch boasted of being fresher and began doing its own taste tests. Miller Lite introduced football referees who threw flags for the penalty of drinking Bud Light, to which Bud, which said it was taking the high road, countered with refs of their own who crave Bud Light. Funny thing happened in this war, though. Sales of Miller Lite, which have been sluggish for years, are up, while Bud Light’s are down. “Anheuser-Busch took its eye off the ball – its own products – and began watching and reacting to its smaller rival,” O’Keefe said. “Instead of taking care of business as usual, it has been on its heels and actually may have brought more attention to its competitor by engaging this feud.”

Number 7: Fannie Mae – The mortgage company, which is involved with one of every five home loans in the United States, announced in September that the SEC was investigating its accounting policies that could lead to a $9 billion net loss for its third quarter. Then, Fannie Mae and its auditor missed the regulatory deadline for filing an earnings report. In November, Ohio Attorney General Jim Petro filed a securities fraud, class-action lawsuit against the company and its officers, who were accused of embellishing numbers to line their pockets with bonuses. “It’s a shame when a company so well respected for so many years strays,” O’Keefe said. “Corporate greed hits at the heart of a company’s image. This will take Fannie Mae a while to overcome.”

Number 8: Pier 1 Imports – Late in 2003, Pier 1 announced a spokesperson makeover, casting off Kirstie Alley in favor of Thom Filicia of “Queer Eye” fame. Shortly after second-quarter earnings revealed a 43 percent decline in profit, the specialty retailer announced it would look for a new advertising agency. Now it appears Filicia could be on his way out as the new agency gets to work. “A classic case of a company that once had a fantastic brand but has floundered and now has no conviction to its brand,” O’Keefe said. “Corporate marketers and CEOs assume that if numbers aren’t great, it must be time to can the ad agency and start anew. Brands aren’t built by constantly churning slogans, campaigns and agencies.”

Number 9: Dell DJ – Dell had visions of competing with Apple’s iPod when it introduced its DJ. Its late introduction hurt holiday sales last year, even though Dell priced the DJ to undercut the iPod. This year has seen little to no marketing efforts to support the DJ, and Apple actually has increased its dominance for hard drive-based music players by 10 percent and garners more than 90 percent of the market. “What’s the point in trying to go head-to-head with the market leader if you’re not certain you really want to?” O’Keefe said. “Belief is crucial to the brand, and Dell has shown little signs that it believes in this offering. So why should anyone else?”

Number 10: Krispy Kreme: Named the “hottest brand in America” a year ago by Fortune magazine, Krispy Kreme followed that up by attracting the ire of the SEC with a profit warning and shady franchise repurchases. The stock plunged 75 percent in the past year as of November, when the doughnut maker announced a loss of $3 million in the third quarter. Earlier in the year, the No 2 officer resigned and speculation is that the CEO could be the next to go “It doesn’t fall into the Enron category, but Krispy Kreme has gone from darling to dreadful,” O’Keefe said. “For years, it’s grown at a slow and steady pace, and all of the sudden, it’s thriving on Wall Street, growing too fast, likely reading its own headlines and losing focus. What a shame.”