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Grant Thornton - Virtual world, real risks - online brand misuse and abuse (social media)
1 in 7 searches for a brand will lead to an unauthorised site diluting any investment a brand has made on the internet. This article offers an introduction to some key areas of risk which come with managing your brand online.
Grant Thornton - Virtual world, real risks - online brand misuse and abuse (social media)
Virtual world,real risksWhen social media becomes a liability
When social mediabecomes a liabilitySince setting up its Facebook fan page, Starbucks hasamassed a captive audience of 25 million fans across theworld to which it can market its products. This numberis likely to grow. Starbucks and many other companiesare exploring the benefits social media can bring, oftenfor a low investment, but some of the world’s biggestbrands are also falling foul of its hidden risks.‘Antennagate’ – the PR crisis that struck Apple when itlaunched the iPhone 4 with an inherent design fault – isa recent high-profile example of how social media canwork to a company’s disadvantage.When customers use social media to turn against you,the consequences hit right at the heart of a boarddirector’s responsibilities – the bottom line, yourshareholders and your company’s reputation – yet,surprisingly, few board directors include social media intheir group-wide risk management strategy.What Apple’s and others’ misfortunes prove is that youneed to protect your company as vociferously as youpromote it on social media platforms; otherwise yourhard-earned, but vulnerable reputation is at risk.
Virtual world, real risksSocial media’s biggest advantage is also its biggestdisadvantage – its pervasiveness. It has millions offrequent users, which means misinformation ormalicious falsehoods can be spread as far and asfast as any positive publicity.What can go wrong? in Singapore, was reported on TwitterNeglecting to manage your presence on to have exploded and crashed. The false iPhone 4: Antennagatesocial networks by failing to monitor information reached millions within When Apple’s iPhone 4 was releasedactivity relating to your company, can moments.lead to reputational damage, before you Qantas responded to the incident it had an inherent design fault – theknow what’s hit you. via Facebook but failed to update antenna would be covered by a user’s Many things can go wrong – from its Twitter feed for several hours. hand when the phone was in use,losing control of your brand on social By that time, the company’s brand significantly impairing reception.media platforms to becoming a victim and reputation had been attacked. The resulting negative feedback wasof brand/reputational damage by Responding immediately via Twitter enormous (the issue even gained itsanonymous attackers and leaking of would have been more effective, not own name, Antennagate). Eventually,commercially sensitive information. only because it is a real-time medium, Apple offered customers free iPhone Simple events can have dramatic but also because it was the vehicle by cases that reduced the problem byeffects. Comcast, a US telecoms which the rumour had escalated. placing a gap between the user’s handcompany, suffered extensive The airline’s CEO later revealed that and the phone body.embarrassment and reputational the incident had cost Qantas $80m and However, leaked documents,damage when one of its home engineers claimed the mixed reports via Twitter distributed on social media sites,was videoed asleep on a customer’s sofa had caused the share price to tumble.while waiting for an hour for his own revealed that Apple knew about thehelpline to respond. It became one of Why do some companies fail to problem during development of thethe most watched clips on YouTube at manage their social media risks? iPhone but continued to launch anyway.the time with 1,665,920 hits. Risk management is high on every Negative commentary on social media Australian airline Qantas failed to board director’s agenda, but effective sites escalated to some of the highestmanage social media effectively when control of social media often slips levels ever witnessed.one of its planes, having safely landed through the net for several reasons. With the free cases – costing a total of $175m – and consequent losses in sales, Apple took a significant hit to its finances. While those costs may have been recovered, Apple’s reputation, which has always been key to its customer base, has been dented. Had Apple proactively increased its levels of social media activity monitoring up to, during and after the launch, it could have identified and managed its reputational damage much earlier and more effectively.
Quite often, there is a lack of Questions your senior management • Are we listening?understanding at board level of the team should be addressing Ask your management team if itrisks involved. Sometimes, social Every board should be asking its is proactively monitoring relevantmedia is perceived to be the remit of senior management team to address the social media channels, includingthe marketing director or someone following questions to help establish blogs, chat rooms and review siteselse that has been pressed into taking the effectiveness of the company’s in addition to mainstream platformsresponsibility for the issue, even though approach to managing social media such as Twitter and Facebook. Socialthey may not be qualified for it. In risks: media activity is driven by eventsmany cases, there is no clear strategy or • Do we have a clear strategy and and matters of interest, which meansset of policies in place to manage social policy in place for social media? heightened levels of monitoringmedia risks. The strategy needs to address are advisable during key events Whatever the reason, the the potential risks and rewards. such as product launches, marketconsequences when your company’s Controls are also needed to govern announcements, mergers and timespresence on social media is left employees’ behaviour when using of crisis. This allows you to spot andunchecked can be so grave, that the social media – a clear policy helps deal with negative developments atonly place where responsibility for to mitigate against risks such as the earliest possible opportunity.ensuring the risks are being managed negative employee commentary • Do we have a response plan ineffectively should lie, is at the very top. and the leaking of commercially case of a social media crisis? sensitive information. Remember A comprehensive crisis management to communicate that policy to all plan should be an integral part of employees. your social media strategy. • Who is in charge of social media? This needs to be an experienced When managed well, social media and qualified senior manager who provides a valuable additional way to has the full backing of the board reach customers, key stakeholders and and whose remit extends beyond others. When ignored, neglected or marketing, to group-wide use of managed incorrectly, its impact can social media. be catastrophic.
The BP oil spill: How not to use social mediaGood intentions can sometimes backfire when they were expressed.in the world of social media. Energy BP hasn’t sought to silence negativecompany BP is a case in point. social media commentators but its BP started using social media in perceived head-in-the-sand attitude to the2010 in response to the Deepwater conversations taking place has led toHorizon oil spill in the Gulf of Mexico. something of a social media backlash. Speaking about coverage of the One Twitter feed – @BPGlobalPR – hasoil spill in its wake, BP spokesman hijacked the company’s brand to offerRobert Wine says: “There was lots of a satirical take on BP’s social mediaonline commentary, misinformation response to the oil spill. It now hasand poor-quality information, along with around 164,000 followers.straightforward reporting and opinion.” One commentator, Ian Capstick, “We used Twitter and Facebook to wrote in his blog post 5 Digital PRhighlight rapidly unfolding events and Lessons from BP’s Oil Spill Response:Flickr and YouTube to post images and “The general consensus in the publicvideos of the work we were doing – and relations industry is that BP ran its crisisstill are – around the Gulf Coast states communications in the same ham-to repair the damage and support the fisted manner they’ve run the clean-uptourist, fishing and other industries.” operation in the Gulf.” Wine stresses that for BP, these are Indeed, Capstick says the “BP PRjust extra channels and don’t replace disaster” has become a regular casetraditional media releases and briefings, study on the communications or socialcommunity engagement and contact media conference circuit.with regulators and governments. BP started off with having to rebuild The company’s social media strategy its reputation on safety; now it alsomay seem sound at first glance but BP needs to improve its social mediamade the mistake of using social media reputation.platforms to inform rather than engage Wine says: “We’re now looking at howwith stakeholders. Crucially, it often we can use social media in the future,prevented users from commenting on having learned much from a standingBP content or sharing it with others and start in 2010.”failed to address comments or concerns Helping you protect your reputation Grant Thornton’s Internet Intelligence team is uniquely equipped to help companies proactively manage the risks associated with social media. With experienced practitioners and cutting-edge technologies, they can: • Help devise a social media policy bespoke to individual requirements • Audit your brand on social media and monitor activity for key issues • Provide advice on issues of particular concern • Carry out reputation due diligence on individuals or third parties • Assist in legal and regulatory matters