Timing is everything: 3 lessons for brands in a fast-paced media landscape
In the digital era, running a business requires much more than building a product and selling it. Managing reputation and brand health is becoming increasingly important for a company’s success, and requires navigating a fast-paced, often unpredictable new media landscape.
During my San Francisco quarter last fall, I interned with Zignal Labs, a social media-monitoring software company. As part of its marketing team, I helped make the software solution feel relevant and useful for potential customers. In doing so, I learned how the constantly shifting media landscape affects corporate communications, especially in the face of overwhelming quantities of consumer data.
Here are three insights I gleaned from my experience:
Market value is linked to reputation as much as product
Gone are the days when a company’s product was the single most powerful factor driving its bottom line. Today’s companies not only sell their products, but also must communicate with countless audiences through a variety of messages and narratives. As such, brand reputation management has become a top priority of the C-Suite.
Industry professionals are feeling this change: More than half of the respondents (52 percent) in a recent Brand Health Survey, conducted by Zignal in partnership with PRWeek, feel that at least half of a company’s market value is linked to reputation. And 92 percent said at least one-quarter of a company’s value was attributable to this asset.
Consumers are not the only primary stakeholders in this equation. Employees, investors, media, other companies and policymakers are all parties in the game of corporate reputation management, which creates an unpredictable digital media landscape. When asked to pick which group’s sentiments are the most important to how an organization should evaluate its brand health, about 68 percent placed consumers in their top two slots. Employees followed at 52 percent, and influencers came in at 25 percent.
Today’s fast-paced environment has also created countless sources of potential digital risks. Exhibit A: a single tweet from Elon Musk resulted in the SEC filing a suit against him. While 64 percent of respondents ranked product recall or service issues as their top two communications nightmare scenarios, 54 percent placed missteps by top executives in the same category. Other perceived risks included financial crises and fake news associated with the brand, with nearly three-quarters of respondents (73 percent) admitting they are not as ready as they could be to react to such unexpected crises at a moment’s notice.
Corporate activism is a double-edged sword
Corporate and executive reputations are under close scrutiny across the board. There’s a significant rise in consumers who actively seek out information about where companies stand on important social and political issues, according to Global Strategy Group’s most recent annual survey of American consumers. People visit company websites (49 percent), read news stories about companies (40 percent), and use social media platforms like Facebook (31 percent) to find this information.
Interestingly, this behavior translates to tangible business outcomes as well. Some 46 percent of Americans are more likely to buy from a company whose CEO speaks out on a hotly debated issue with which they agree, according to a nationwide poll conducted by Weber Shandwick in partnership with KRC Research this year. The same survey found 42 percent of consumers who knew of CEO activism changed their purchasing behavior, usually by boycotting the company’s products (35 percent).
The impact of corporate activism on company value, then, is a double-edged sword. As more people care about brand reputation, a strategic approach to brand reputation management seems necessary.
We need look no further than the relationship between Nike’s stock prices and mentions of its advertising campaign with Colin Kaepernick to see how a carefully managed controversy can significantly boost company value. While the sheer scale of the initial controversy surrounding the Nike campaign seemed to have scared investors, consistent strategic reputation management eventually led to higher stock prices.
Real-time engagement helps corporate messaging appear genuine
While the potential stakeholder reactions to public corporate involvement in social and political discussions are harder to foresee, more people expect companies to speak out for their values regardless of controversy.
The key to good brand reputation lies in the ability to deliver a compelling narrative behind a company’s position. Even silence and inaction can be interpreted as a statement: As corporations are considered not only business entities but also agents for social change, both their actions and lack thereof are subject to judgement.
When it comes to entering the fray of discussion on an issue, timing is critical. The GSG survey found half (50 percent) of Americans expecting a corporate response within 24 hours of a current event, with 80 percent believing a good corporate citizen will speak out on important issues as they happen. Real-time engagement helps corporate messaging appear genuine, approachable and reflective of the company’s active interest in the topic.
When violence arose in summer 2017 in Charlottesville, VA, the reactions of President’s Manufacturing Council members showed correlations between response time and brand reputation: Merck, whose CEO was first to take action by resigning from the business council, was rewarded with a 22-point increase in the company’s favorability ratings in the GSG survey. The companies that followed suit saw diminishing returns, until those that said or did nothing suffered a loss in favorability ratings.
The key takeaway from this case is that companies should not only act swiftly and decisively, but they also need to get it right. This requires a careful, strategic approach to corporate communications, so companies can be prepared to jump into dialogue in a timely, authentic and purposeful manner. This is the business opportunity for Zignal, which helps companies keep track of conversations about its brand and react accordingly.
Brand reputation is now a key factor in a company’s stakeholder conversations, beyond just the scope of communications professionals’ responsibilities. Zignal Labs’ 2018 Brand Health Survey of over 170 communications professionals found that corporate executives, consumers and employees all care about a company’s brand image. Companies must recognize the extent to which a multifaceted approach to corporate communications can affect their bottom lines and act on it.
