Managing Reputation Online

CVCA, Beijing 25th August 2011

Jon Wade – Head of Digital, Asia PacificWeber Shandwick

• What is reputation management all about and why is it so important for brands and organisations?

• Why has the Internet made effective reputation management more difficult?

• 8 practical steps to prepare your organisation for an online crisis

• 5 techniques to manage an online crisis in full-flood

• Summary / Q&A

Contents

1. The beliefs or opinions that are generally held about someone or something

2. A widespread belief that someone or something has a particular habit or characteristic

What is reputation?

What do I do for a living?

What are my opinions and values?

Will I be friendly or

hostile to an approach?

How am I likely to

behave in a given scenario?

Should I be given a particular task?

Should I be interacted with?

Is a relationship worth

maintaining?Should I be

recommended?

Personal Reputation

But why do

organisations care about their reputation?

Reputation(NPS)

Long-term Profitability &

Growth

Q: “How likely are you to recommend this brand to your friends and family?”

NPS = % Advocates - % Detractors(0 – 10 scale; 0 – 6 Detractors; 7 – 8 Neutral; 9 – 10

Advocates)

Net Promoter – Bain & Co

US Airline Industry: 2001

High Net Promoter scores translate into long-term revenue growth for those firms with a focus on maintaining and growing their reputation

Source: Satmetrix and Dr. Fred Reichheld

Source: KRC Research / Weber Shandwick 2009, n=950 company executives across 11 countries

In Asia Pacific, executives surveyed claimed that corporate reputation represented

63% of their

firms market value.

The Financial Value of Reputation

http://www.timesonline.co.uk/tol/comment/columnists/chris_ayres/article6722407.ece

The Dave Carroll ‘United Breaks Guitars’ incident was estimated by the UK Times to have cost United shareholders

US$180,000,000

The Financial Value of Reputation

Financial repercussions of developing a bad reputationBeijing-Shanghai High-Speed Railway US$5bn IPO delayed due to public fury and bold media criticism of the Railway Ministry following the Wenzhou tragedy.

In addition:• China Railway Group dropped plans

to raise RMB6.2bn via a share placement due to uncertainty around regulatory approval

• China South Locomotive and Rolling Stock Corp delayed shareholder vote on US$1.7bn fund-raising plan partly due to backlash from accident

Why does good reputation translate into increased competitive advantage?Investors are more likely to recommend stock…

…employees are more likely to recommend the

organization as a good place to work…

And customers are more likely to remain loyal and recommend products and services to friends and family.

In addition…

Organisations with a bad reputation are less likely to be given the benefit of the doubt when a crisis does break…

…and are more likely to be scrutinised by

legislators and governments

More evidence…

Total shareholder returns

WMAC S&P 500

1 year 22.6% 15.1%

3 years 4.3% (2.8%)

5 years 8.3% 2.3%

10 years 7.8% 1.4%

Source: Hay Group, 2011

A 2011 Hay Group report demonstrated that the ‘World’s Most Admired Companies’ outperformed the S&P 500 average over 1, 3, 5 and 10 year time frames.

Corporate Reputation – “Front of Mind” for global executives

Economist Intelligence Unit, 2005 “Reputation: Risk of Risks”

Brands are vulnerable globally

31% of global business leaders expect some form of reputation damaging incident to affect their brand within the next 2 years

Source: KRC Research / Weber Shandwick 2009, n=950 company executives across 11 countries

And it’s getting worse…

Why the Internet has made reputation management more difficult

Why is this happening more often and with such global scale to once invincible brands?

Well, one main reason is that the Internet showed

up…

And gave an

audience to

anyone who wanted it.

Blog Platforms Social Networking

ServicesVideo Platforms Live Streaming

RSSSearch Engines

Internet technologies provide would-be influencers (both advocates and detractors) a ready-made

online audience

They are still people who can change the opinions of their audience about

something, either positively or negatively...

…and often they still work for the government, a

newspaper or a TV station.

In our digital world we need to redefine our perception of influencers.

But they are also David Liu, Weber Shandwick’s China GM who has a blog with 16m page views per month…

…in Japan, they are not even human! Gachipin, a children’s TV character is the

most followed “person” on Twitter.

…another example, Kevin “Too Fat” Smith, actor/director who enjoys

giving airlines bad publicity

And in some cases they are your employees dragging your brand’s

reputation into the gutter…

And this new set of influencers don’t play by the same rules…

• Historically high ethical standards

• Fact checking• Calling brands

for comment• Daily / Weekly

press cycles• Now in

competition with bloggers

• Low ethical standards

• No fact checking, publish rumours

• Publish immediately, no notification

• Scooping traditional media

Press Bloggers

Which means that media are having to behave more and more like

bloggers now to be first to a story…

Implications for Brands / Organisations

Organisations used to have considerable discretion over when, how and where they would issue a statement to the media as well as what they told employees, investors and customers…

…now unhappy

customers, disgruntled

employees and disappointed

investors wait for no-one

And there’s a lot of them…

Over 1/2 of Asia Pacific’s Internet users are in

China but still only 1/3 of the population is online

“Globally smartphone shipments have surpassed PC for the first time, in Q4 2010 much earlier than predicted by Morgan Stanley”

But there’s going to be even more in China very soon…

Source: IDC

Case Study – China Red Cross

• Guo Meimei posted pictures of her lavish lifestyle on Weibo whilst claiming to be a senior employee of the Red Cross Society of China

• Created an incident that would never have occurred prior to the information revolution.

• An enraged online audience failed to be placated by statements from the Red Cross that Meimei had no association with the organization and continued to dig for more and more scandal, which they duly found and which fueled the continuing online firestorm.

Red Cross collection boxes have been tranformed into waste-paper bins, collecting

rubbish instead of

money!

The new Information Brokers

Unencumbered by rules, policies, regulations, processes and policies the new information brokers…

…are always going to be more nimble than any brand using

traditional communications techniques.

More Implications for Brands and Organisations

Brands and organisations have to adapt

to becoming not just transmitters of information…

…but also

responders to information

Information sources in our hyper-connected world are many, varied and can simultaneously combine to

overwhelm individuals and organisations and induce panic

Proliferation of Information Sources

Case Study – SARS crisis

“An infodemic is not the rapid spread of simple news via the media, nor is it simply the rumour mill on steroids.

Rather, as with SARS, it is a complex phenomenon caused by the interaction of mainstream media, specialist media and internet sites; and ‘informal media’, phone calls, text messages, e-mail, fax and pagers all transmitting some combination of fact, rumour, interpretation and propaganda. It can rendered more difficult to understand by multiple languages, cultures and attitudes toward the free and open flow of information.” David Rothkopf, CEO Gartnen Rothkopf

Source: Asian Development Bank

Why was the economic impact so bad given the relatively low mortality rate of the virus?

“(i) The almost costless and rapid transmission of information due to the development of modern media and communication technologies, and

(ii) The lack of sufficient medical information on SARS”Source: Asian Development Bank

Another example

When a mobile text message claiming a Fukushima radiation cloud was headed for China and advised taking iodised-salt would protect people there were

mob scenes at supermarkets as people cleared shelves of bags of salt!

Managing the rumour mill

Rumour can take on the

power of truth in our hyper-connected world

Brands and organisations need to be prepared to communicate the ‘truth’ of a situation as a way of

mitigating rumour, innuendo and

factually incorrect reporting.

Organisations have to think like publishers and increasingly, brands are making use of ‘myth-

buster’ sites online and on social networks that help to tell their side of the story

8 practical tips to prepare your organisation for an online crisis

Establish client crisis team and interview key internal stakeholders1.

Crisis Preparation

• PR, Legal, Web, Marketing and Key Executives should all be considered as members of the client crisis team

• Establish historical and future issues and crisis topics

• Understand previous responses, plans and learnings

• Ensure web / social media teams are included in interviews

Review corporate policies and procedures including social media policy

2.Crisis Preparation

• Establish existing response processes and decide on their appropriateness

• Ensure social media policy and social platform “house rules” are included in review and republished if necessary

• Not every crisis can be predicted and a mechanism for rapid review and amendment of policies needs to be established

Identify potential issue scenarios and develop escalation system3.

Crisis Preparation

• Research industry and competitor historic crises / research and add to stakeholder interviews insights

• Determine potential upcoming threats based on known plans

• Brainstorm as many unknown potential threats as possible and ensure you include online-only, online-to-offline and offline-to-online scenarios

• Develop a threat grading and escalation system for both traditional and social media and have teams assigned to respond for both media

Formulate responses to potential issues and key messages4.

Crisis Preparation

• Craft key messages and talking points for traditional PR

• In addition write sample blog posts, wall posts and tweets

• Ensure a rapid digital video production method is in place for video responses

• Statements that work for newspapers will not work online and vice versa – craft responses by channel with different tones and styles

Monitor offline and online conversations and identify advocates & detractors

5.Crisis Preparation

• Create an early warning system: track both traditional and online coverage and conversations for pre-identified and brand / industry related issues

• Include top-line analysis in the form of charts and trends

• Identify influencers, both those who are positive and negative toward the brand in both media. Revise and refine monitoring to ensure full coverage of key influencers

Audit digital assets and prepare additional response assets as necessary

6.Crisis Preparation

• Identify existing digital / social platforms and properties and ensure a method to respond online exists so the organisation is not caught flat-footed

• Ensure video assets are available for key scenarios and a rapid production capability exists for unforeseen issues

• Pre-prepare ‘myth-buster’ and ‘dark sites’ that can be quickly activated and pushed live for particularly damaging crisis scenarios

• Ensure you have content syndication capabilities in place for rapid information dissemination (RSS, wire services, social platforms, presentation and document hosting platforms)

• Create #hashtags for Twitter and Weibo to allow people to easily follow the brand’s communications

Engage supporters and build up credentials7.

Crisis Preparation

• Once influencers are identified, begin outreach to them to build up relationships that can be used in the future

• Work on building up industry awards and nominations that can be referred back to during times of crisis (e.g. ‘best places to work’, ‘most admired’ etc)

• Promote these CSR efforts ahead of time, particularly with key advocates and detractors

Simulate crises using Firebell and traditional techniques8.

Crisis Preparation

• Perform crisis simulation and training on potential crisis scenarios in traditional and social media environments using Firebell, Weber Shandwick’s social media simulation software

• Put company spokespeople through hostile media training

• Make sure your team is drilled on the processes for both online and offline crisis response by repeating these processes on a frequent basis to ensure key teams are adequately prepared to respond in the event of crisis

Crisis Simulation

Journalist calls and tweets phone interview live

Establish client crisis team and interview key internal stakeholders1.

Simulate crises using Firebell and traditional techniques

Crisis Preparation Summary

2. Review corporate policies and procedures including social media policy

3. Identify potential issue scenarios and develop escalation system

4. Formulate responses to potential issues and key messages

5. Monitor online conversations and identify online advocates & detractors

6. Audit digital assets and prepare additional response assets as necessary

7. Engage supporters and build up credentials

8.

6 practical tips for dealing with an online crisis

Define the situation and appropriate response / action1.

Crisis Response

• Except for very public crises (plane crashes, consumer product issues) or where the crisis relates to the medium itself (twitter gaffe, negative video) social media should be used as a reactive rather than proactive channel

• For social media crises, a response in social media is the recommended response

Review policies for appropriateness to specific crisis2.

Crisis Response

• Occasionally a crisis will occur that cannot be predicted

• The procedure for swift policy amendments needs to be put into action in these situations

Activate influencers, launch dark sites and publish / distribute key messages3.

Crisis Response

• Activate ‘dark sites’ and distribute key messages to key influencers

• Publish key messages on brand’s online and social media platforms

• Correct erroneous / misinformation on social using myth-buster sites and corporate social presences

Crisis Response

Source: KRC Research / Weber Shandwick 2009, n=950 company executives across 11 countries

Continuous and in-depth monitoring to gauge opinion and understand when crisis is abating

4.Crisis Response

• Additional international resources should be applied and frequency should be increased to hourly to provide round-the-clock monitoring

• Volume and sentiment will demonstrate whether the crisis is still in full-flood or whether it is abating and how the brand’s response is faring with the audience

• Additional influencers will appear without warning – a rapid outreach to influencers is often called for

Increase response reach through paid media and search5.

Crisis Response

• Search engines amplify both positive and negative stories and by buying paid search keywords (e.g. “oil spill”) you can get your organisation’s message out to a wider audience

• Other social networks allow buying of targeted ad space (e.g. Twitter, Facebook, Weibo, RenRen) that can also help increase your message’s reach

Implement post-crisis audit and rebuilding plan6.

Crisis Response

• Perform a post-crisis analysis to help determine best practice moving forward

• Continue your programme of social media monitoring to ensure you are able to spot any flare-ups or new crises hitting in good time

• Continue your influencer engagement programme – reach out to your advocates and keep them informed on your organisations continued efforts

• Make sure your employees are informed on what the organisation will be doing to learn from the crisis and how they helped to drive the conclusion

Define the situation and appropriate response / action1.

Crisis Response Summary

2. Review policies for appropriateness to specific crisis

3. Activate influencers, launch dark sites and publish / distribute key messages

4. Continuous and in-depth monitoring to gauge opinion and understand when crisis is abating

5. Increase response reach through paid media and search

6. Implement post-crisis audit and rebuilding plan

• Covered why reputation management so important for brands and organisations

• Explained why has the Internet made effective reputation management more difficult

• Provided 8 practical steps to prepare your organisation for an online crisis

• Provided 5 techniques to manage an online crisis in full-flood

Summary

Questions?

Jon WadeHead of Digital, APAC – Weber Shandwick+852 9789 8973@digital_apacjwade@webershandwick.com