Below, we highlight an example of a corporate attack that had a profound impact on a multinational company's brand reputation:
Case Study: The Deepwater Horizon Oil Spill
The 2010 Deepwater Horizon disaster, also known as the "BP oil spill," began in April 2010 in the Gulf of Mexico. Eleven people were killed in what many consider to be the largest marine oil spill in history. After several attempts to contain the flow of the spill, the well was eventually sealed in September of that year. The US government estimated at the time that the total spill was approximately 4.9 million barrels.
During the crisis, when people searched Twitter for the terms "BP" and "public relations," the top result was "@BPGlobalPR." Founded in 2010, the account grew to more than 175,000 followers; the company's official Twitter account, in contrast, only had 15,000 followers.
@BPGlobalPR's bio section contained the following: "This page exists to get BP's message and mission out into the Twitterverse!"
What we did not mention is that @BPGlobalPR was a parody account created to spoof the company's public relations efforts after the spill. BP initially wanted to shut down the account, but Twitter's policy at the time of the disaster allowed for parody, commentary, and fan accounts to be created, as long as the accounts themselves did not mislead users by claiming to be affiliated with the account subject (the brand itself).
BP, in response to the disaster, chose to leverage social media platforms such as Facebook, its verified Twitter account, and YouTube to spread its message and try to contain the damage to its brand reputation. However, BP soon learned how social media can shape and control a company's message during a crisis. By the time BP reacted, the fake account had gone viral and had been picked up by news outlets.
The Consequences of Corporate Reputation Attacks
Attacks can have a profound, long-lasting impact on a company, whether it is a small business or a large corporation. This can have wide implications, as you are about to understand.
Statistically, online corporate attacks against companies, their products, and/or executives and officers account for damages in the billions of dollars annually. The internet has leveled the playing field between large corporations and individual activists. In full-scale attacks against large institutions, some antagonists are truthful, but not all of them are.
Those who take on companies are typically very emotional and aim to foster the larger social community to side with their point of view by leveraging reputation-centric platforms such as Yelp, Amazon reviews, and other scoring websites tied to service or product delivery. Additionally, some may launch corporate attacks to the advantage of the company's competitors and earn a profit from such attacks.
According to Harvard Business Review, in the business economy, 70% to 80% of a company's market value comes from intangible assets such as brand equity, intellectual capital, and goodwill. Damages to its reputation lead to an inability to attract top talent, and costly media and press campaigns are undertaken to try and undo the damage (often not successfully).
For companies that undergo reputation attacks, the hard costs can range from $5,000 to repair an executive's online reputation to $20,000 to drastically change the content seen when a company is searched online. Note: This range is for monthly costs and can far exceed this, depending on the scale of the attacks.
In recent years, the costs of corporate attacks have only gone up as their sophistication and the increasing number of platforms available have made them much more difficult to address.
How to Manage Your Corporate Reputation
There are numerous ways businesses of all sizes can manage their corporate reputation and respond appropriately to different challenges:
- While responses can vary based on the size of a company and what (or who) the exact target is, one of the first mechanisms is to not panic and know your rights. At one time or another, it is estimated that every business is plagued by a bad review (or two). The angriest of customers can usually be appeased when they are not ignored and are directly engaged with via the platform where they launched their attack (e.g., Yelp, Twitter, or Facebook).
- When working to counter a corporate reputation attack, especially on social media or a ratings platform, companies should act quickly. In thinking back to the PR nightmare for BP, one of the main points of fodder for social media activists was that BP was not acting quickly enough to contain the spill. Instead, the company appeared to be in a tug-of-war over its messaging, which included how to control the parody account, @BPGlobalPR.
- Companies should have a communications firm "on standby" in the event that an attack ever happens. Alternatively, when someone within the company is responsible for this, the overall communications strategy should include a crisis management response. How well the company communicates with or engages with those outraged also matters. Sometimes, especially with poor restaurant reviews, for example, a simple apology and offer can help curb additional negative comments.
- Finally, as social media continues to dominate our personal lives on a daily basis, companies must become comfortable with it before crises can occur. Some companies will hire social media and/or online content managers who are skilled in negative reputation attacks. For smaller companies, these services can also be outsourced to firms that monitor and help develop brand content. When in doubt, if a person or account is not following a social media site's policies, they should be reported.
This case study highlights how quickly the internet can spread the wrong kind of message about a brand and the relative ease with which these challenges can arise in our ever-more interconnected world. As the sophistication and complexity of corporate attacks evolve, businesses must develop an awareness of how these attacks can occur so that they can be best prepared.