The risk social media brings to
brand reputation is real
We don’t live in a world where conventional risk-management textbooks prepare us for social media’s impact on brand reputations. Because of the Internet and globalization, social media threats have increased and so has the urgency of crisis preparedness. Yet, most companies do an inadequate job of managing their reputations in general. They tend to focus energies on handling threats to their brand reputation that have already arisen. This approach is crisis management and certainly not risk management. Crisis management is a reactive approach whose purpose is to limit the damage.
Survey Reveals 33% of Global CCO’s Unprepared
Today, the need for crisis management has become increasingly important to companies, but still one-third of global chief communications officers are unprepared to handle social media threats. According to the The Rising CCO III, an annual survey conducted by global executive search firm, Spencer Stuart and global public relations firm Weber Shandwick, 33% of global chief corporate communications officers (CCO’s) are not prepared for managing online reputation threats.
Crisis Management Issues Soaring
The survey also revealed that crisis/issue management has risen during the past three years as a critical skill set for CCO’s. According to the survey, this was nearly twice as important in 2010 (61%) compared to 2007 (33%). Additionally, as many as 52% APAC CCO’s are striving to formalize their social media efforts. While these observations may seem convincing, it is evidently clear companies need to become more proactive in building social media risk management plans. To be successful, companies need to be strategic and logical when they incorporate social media into risk management plans. There are two benefits companies get from risk management. First, a reduction in time to resolve issues and second is an enhanced reputation because of less adverse noise.
Brands Are Extremely Vulnerable
Marketers have come to realize that brands are extremely vulnerable. We have seen many examples where reputations carefully built over decades can disappear overnight. Management guru Tom Peters tells us:
“Nothing is not branding. Branding is how our organization lives in the world”
Market value is largely driven by intangible assets like brand equity and goodwill. With potentially billions of dollars on the line, now we must understand social media’s dynamic power shift to the consumer. We have come to realize that a brand is essentially what the consumer says it is – not what the marketer says it is. In an age of user generated content, “Likes” and followers, we know the consumer has the power to shape or destroy even the best of brands. Years ago, Walter Landor told us:
“A brand is a promise”
Given the extreme fragility of brands today, how can we not seriously be proactive to protect those brands that mean so much? How can crisis / risk management professionals protect brand value? The risk social media brings to brand reputation is real.
Cheryl Burgess will be speaking at the Contingency Planning Exchange quarterly meeting at Morgan Stanley in New York City on November 17, 2010 on the “Perils of Social Media Revolution and Risk Management”.