Ashley Madison -- Teflon Brand or Burnt Toast?

When people hear the brand name Ashley Madison, the connotation is clear. The only difference between now and a few months ago is the ubiquitous recognition. The Ashley Madison hack is putting the notion that "any press is good press" to the test. While the fall out clutters courtrooms around the country, the core brand of Ashley Madison will illustrate how a brand dies in the digital age. Ashley Madison has cemented itself as a textbook example - near 100% brand recognition, no ability to monetize. It will sit next to Enron, MCI Worldcom and Pan Am as brands who have run their course.

The death knell won't come from the hack itself. Rather, the leaks expose the smoke and mirrors the company used to build the brand. Ultimately any brand should be judged on their ability or failure to deliver on their promise to consumers.

Dispel the notion that Ashley Madison's brand stood for discretion. Any brand whose foundation is adultery (or the more politically correct, "extra-marital affair") really shouldn't use trust as the proverbial "reason to believe" the brand promise. There is some irony that members had an expectation that a site helping them be have an affair would itself be trustworthy. E-cigarette brands don't make health claims. Fast food brands don't tout "good for you." Sports cars don't stray from speed as the selling point. A service with the tag line "life is short, have an affair" isn't selling honesty.

Similar to experiential brands like Red Bull, GoPro and Polaris, Ashley Madison catches users with the promise of thrills. Those other brands have actual products supporting their revenue model which either will or won't meet consumer expectations. Ashley Madison's monetization path is a bit less clear. Ashley Madison is deep into the online traffic ecosystem. With steady stream of people "just checking," an active affiliate program, and a healthy list of paid subscribers, the site attracted millions of unique visitors. The traffic contributed to $115 million in revenue and $55 million in pretax profit for parent company Avid Life Media in 2014. Those are eye-popping numbers for a digital media company. In contrast, Huffington Post breaks even on $146 million in revenue. Scrutiny will build as observers unravel the Ashley Madison revenue model. Somehow in a competitive digital landscape, Ashley Madison's parent company effectively monetized consumers. The split of Ashley Madison's revenue between paid subscribers and the sale of consumer data will soon become an emerging undercurrent of the story. The emergence of information that shows Ashley Madison trafficked in consumer data would be accelerate the race for a solution in online privacy and the death spiral for the brand.

As the myth unwinds, Ashley Madison's brand will take another hit. Fair to say that we've grown numb to the shady nature of the digital world. The concepts of pseudonyms, alias and bots aren't new. Still, the revelation from Gizmodo that most women on the site were manufactured reeks of fraud. When it comes to physical products, consumer tolerance for deception is low. For example, it took much less to shut down meat plants producing the infamous "pink slime."

Fortunately, we live in a world of redemption. Politicians and celebrities who have been caught in their own stories of deception have masterfully rebuilt brands. Testimonies of the accepting flaws, righting wrongs and looking forward are the lifeblood of reemerging brands. Even brand "pink slime" returned. Ashley Madison may not be so lucky. Not only did they dupe ~30 million account users, they burned lives in the process.

After the pitchforks are put away, a simple question will remain. Did Ashley Madison deliver the promised thrills and excitement? The easy answer may be "no". Perhaps, just like a gambler, the chance that next time will be different is enough to excite a new set of users. More than likely, the brand will join the pile of products that had moments of past glory. While we wait, let's all celebrate the Yugo.

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