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Corporate Reputation in the “Social Age”

Question:

How is social media and Web 2.0 enabling

consumer citizens to learn about corporate

practices, speak out about business practices

they do not support, praise those they do support,

share this information with large groups of people,

and start campaigns to change things?

What Changes in the Social Age? Social media and the technology behind it – Web 2.0 – has forever changed how corporations “manage” reputation. At the heart of the change is the explosion of consumer generated media found in more than 150 million blogs, social networks, consumer opinion sites, video and picture sharing networks, and worldwide message boards. Corporate marketers and communications specialists no longer have even the illusion of “control” over the message. People are talking about their products throughout the Web and carrying on their own conversations about brand-relevant topics.

John heads up Ogilvy PR’s

global digital practice,

360° Digital Influence,

designed to manage brands

at a time when anyone

can be an influencer and

everyone is influenced in

new ways. John and the

Digital Influence team he

works with in EMEA, have

completed projects

for clients as diverse as

Lenovo, Unilever, Intel and

Save the Children.

John H. Bell

Managing Director/Executive Creative Director

360° Digital Influence

Ogilvy Public Relations Worldwide

john.bell@ogilvypr.com

Contact:

John H. Bell

Managing Director/

Executive Creative Director

360° Digital Influence

Ogilvy Public Relations Worldwide

Tel: 202 729 4166

john.bell@ogilvypr.com

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Corporate Reputation in the “Social Age” (continued)

Consumers have a louder voice due in part to easy-to-use multimedia publishing tools and word of mouth distribution networks online. How can the experiences of isolated Comcast customers become so connected and amplified as to jeopardize the reputation of the company? How can a single customer/blogger start a wave that rocks Dell to this day? How can a consumer-created video of rats in a quick-food restaurant in Manhattan spread like wildfire causing a brandwide crisis?

There are at least five meta-trends that affect how corporations manage their reputations today. More and more companies are getting smart about these changes, investing in internal education and bringing in partners who are closer to the social media phenomenon to help them evolve not just their communications or marketing but, often, some of their core business practices.

Five Trends Affecting Reputation Management1. Hypertransparency: Having 150 million bloggers

(not to mention message board participants, social

network members, etc.) means having thousands

of potential forensic accountants, social watchdogs

and activists watching your company.

As trust in marketing and traditional media shrinks, trust in peer-to-peer recommendations grow. Many consumers – especially in mature media markets – are skeptical of the corporate images portrayed in advertising or through consolidated, biased media. They look for the real story from people like themselves. The growth in blogs and online communities has empowered those who examine the behavior of companies. They literally banded together like digital forensic experts to reveal the false pedigree of a memo that Dan Rather, CBS anchor, used in a story. That led to his retirement (this was called “Rathergate”).

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Corporate Reputation in the “Social Age” (continued)

When John Mackey, Whole Foods CEO, posted more than 1,000 times on a Yahoo message board under an alias, it was the other members of that board who called him out (and, ultimately, The Wall Street Journal who reported it). You cannot hide much in the new “power of crowds and technology” universe.

A lot is possible with new technology. Virgil Griffiths developed Wikiscanner to reveal exactly who was making edits in the vast cocreated universe of the world’s largest encyclopedia – Wikipedia. In the process, he outed many corporations like Astra Zeneca. Employees there went into the Wikipedia entries related to the drug, Seroquel, and edited out negative statements. All of this was revealed from following the trail of IP addresses on computer networks.

The dynamic of blogs – posts, comments, links – rewards the controversial. And plenty of bloggers are on the lookout for corporate hypocrisy and ready to call it out. One of the by-products of the ever-expanding database that is the Web is our ability to find and compare any information. When Disney licensed their Ratatouille character to a vintner and put the image on the label of wine bottles, the blog, Two Knives, called them out. She also called out Unilever for the Axe/Dove paradox and response.

When BP launched their environmentally made-over gas station concept, Helios House, in Los Angeles, they knew they would fall under green blogger scrutiny. While their ad campaign made a significant, positive impression on the general public, green pundits online and offline remained on the fence regarding the substance to their claims. To ensure the full story behind Helios House made it through, they identified online influencers and reached out ahead of time to invite them to preview the site and get multimedia information about the real nature of the makeover. It worked. Green bloggers warmed to the concept and featured stories praising BP not accusing it of greenwashing.

Implications for Corporate Reputation Management • Never assume you can hide information – someone or something

will likely find it.

• Consumers demand openness from the companies they buy from, so be open. Openness means being straightforward and clear.

• Be ready to reconcile contradictory business practices. Those conflicts will no longer sit in the shadows of an annual review.

• Don’t try insincere CSR. You will be called out online.

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Corporate Reputation in the “Social Age” (continued)

References: http://archive.newsmax.com/archives/articles/2005/1/28/172943.shtml

http://www.nytimes.com/2007/07/12/business/12foods.html

http://www.pharmalot.com/2007/08/astrazeneca-changed-wikipedia-entry/

http://twoknives.net/?p=290

2. Viral Crises: Crisis spreads through networks –

formal and informal with lightning speed and full

motion pictures. When bad things happen, they spread extremely fast, often with the accompaniment of YouTube videos. And no one settles for old-school, one-way messaging. Crisis management has changed forever. No company can protect its reputation by hiding behind “messaged” spokespeople during a crisis.

When a video of rats crawling around a poorly managed KFC franchise in NYC spread across YouTube, Yum Brands had to react to what was to be a global crisis, not a localized NYC event. Press releases wouldn’t do. CEO Greg Dedrick made two videos during the crisis to personally respond. And a sophisticated search marketing campaign launched to make sure people searching Google found the company’s information. When JetBlue passengers suffered an intense episode on a grounded aircraft, criticism rushed from cell phones (complete with pictures) through blogs. The CEO rolled up his sleeves and announced via YouTube a new customer promise. He eventually resigned.

When Kryptonite Locks suffered under the consumer generated video demonstrating how to disable their locks with a Bic pen, they waited and waited to respond. Meanwhile, the video and related stories circulated online and offline, ultimately costing the company $10 million in hard cost for a recall and untold millions in brand value.

Implications for Corporate Reputation Management • Crises spread 10x faster now due to the Internet, and corporations

must respond within hours. This implies they have a plan in place to respond fast in place.

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Corporate Reputation in the “Social Age” (continued)

• One-way communications from an “organization” may not be enough. Leaders need to step forward and have a dialogue with customers and stakeholders.

• Search reputation management is a new art that all businesses must practice today.

References: http://www.imediaconnection.com/content/14452.asp

3. Demand for Dialogue: One way messaging is

not acceptable to those who crave dialogue.

Consumers crave conversation, not messaging, from the brands they love. Press releases won’t do. Scripted customer service isn’t enough. TV advertising can be a smug form of communication. When Dell first started digging out of the DellHell crisis, they did it by setting up the Direct2Dell blog and the IdeaStorm customer co-creation. Both invited customers into a conversation. They demonstrated that they were willing to listen and respond and that they were human beings.

When Lenovo wanted customers to get to know the company, they created an ever-growing collection of blogs at www.lenovoblogs.com. People got know Product Designer David Hill, PC-evangelist Matt Kohut and the other human beings within the company. That personal connection went beyond any advertising to build trust.

Implications for Corporate Reputation Management • Old school press releases cannot be your company’s

communication tactic. To build brand loyalty and inspire advocates, you can accomplish more through human conversation and a willingness to listen.

References: http://www.livingstonbuzz.com/blog/2007/09/06/whats-next-for-the-direct2dell-naked-conversation/

http://lenovoblogs.com/

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Corporate Reputation in the “Social Age” (continued)

4. Louder brand detractors and employees: Smart,

nimble detractors leverage social media every day.

The social Web has built new brands from the small guy who understands how to leverage blogs, search, Web 2.0 innovations like tagging, social networks and more. It doesn’t take a Goliath to become a formidable adversary for a corporate brand.

Consumers, special interest groups and traditional critics (e.g. labor unions) are using the same ease of publishing, sharing and distribution to be heard. Look at McSpotlight, a Web site of corporate critics rallying first around the McDonald’s brand and now expanding their focus “Beyond McDonald’s.”

When the American Steelworkers struck against Goodyear, their literally inflammatory videos (cars bursting into flames) spread across YouTube.

Former Pfizer VP of Marketing, Peter Rost, started a blog after being fired. Question Authority has become a well-known platform not just for Peter’s critique of the pharmaceutical companies he once worked for, but for all other disgruntled pharma employees. They regularly send him leaked memos of questionable practices to reveal on his blog.

When Select Comfort saw a customer rant about their product on a blog (because they had a “listening post” for blogs in place), they were able to reach out to that customer immediately and take action. Within 48 hours, that same customer – shocked by the personal attention he received – turned into a vocal brand fan. Without listening, that and other detractors could have blossomed into a full brand revolt.

Companies that are not proactively launching sustainability or environmental programs are being forced into doing so by their customers and a vocal and skilled minority. Take Apple. In the flurry of activity around Green IT, they were called out for a lack of any meaningful green program. Greenpeace stepped up and launched www.greenmyapple.org, a site that cleverly mimicked Apple’s style and played on the fan base of the company to demand better green practices. Ultimately, Steve Jobs posted a response and adopted environmental measures that the organization and its customers demanded.

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Corporate Reputation in the “Social Age” (continued)

Implications for Corporate Reputation Management • Your detractors will use the social Web. You had better get smart

about doing so yourself.

• Listening to consumer generated media is critical.

• Building third party allies online will help your brand.

References: http://www.mcspotlight.org/help.html

http://money.cnn.com/magazines/fortune/fortune_archive/2007/06/11/100061497/index.htm

http://www.greenpeace.org/international/news/tasty-apple-news-020507

5. Uncontrollable brand fans: Brand fans have a

louder voice than ever (and you cannot control them).

BEven people who love brands are expressing themselves online. Corporations either embrace them, ignore them or fall into the danger of trying to control them, or worse, shut them down.

Is the Starbuck’s Gossip blog a fan blog? It’s certainly not sanctioned by the corporation. They seem to be fans, yet still cover the Barista Tip Jar case ($100 million against Starbucks).

Do you like IKEA? Ikeahacker does and is dedicated to sharing ideas amongst other IKEA customers about how to get the best products and combinations from the retailer.

All Jose Avila did was create furniture for his Spartan lifestyle out of FedEx boxes and post it on www.fedexfurniture.com. Was this a fan celebrating the FedEx brand? Or a to-be-feared pirate attacking the brand? FedEx was not amused and went after Jose legally. The story played out online as he posted their letters, eventually showing up in traditional media as well. While it may not have impacted FedEx’s stock price, it hurt their reputation amongst the little guy. What would have happened had FedEx embraced Jose or even just reached out to him as a human being vs. firing legal salvos as first contact.

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Corporate Reputation in the “Social Age” (continued)

Brand fans have a new power online. And companies need to consider how to embrace them and relate to them not as big, legal entities, but as human beings. Otherwise, they risk an uncontrollable backlash.

Implications for Corporate Reputation Management • Try to look at brand fans as an opportunity first, not a threat.

• Develop strategies for reaching out with humanity vs. legal or stuffed-shirt formality.

• When your IP is in jeopardy, negotiate, even if you feel you don’t have to.

References: http://starbucksgossip.typepad.com/

http://ikeahacker.blogspot.com/

http://www.wired.com/culture/lifestyle/news/2005/08/68492

What matters for corporate reputation management?Corporations must overhaul their approach to corporate brand management. The “crowd” will reveal the whitewashing behavior. They will detect the corporate speak and demand an audience with the CEO. Your detractors will use search engine marketing to win on the new front page: search results. Word of mouth, peer-to-peer conversation is competing and often winning as a communication channel online.

The demands for openness, transparency and authenticity are more than buzzwords. They are the new reality of corporate reputation in the Social Age.