managing your company’s social iq: how to engage in...
TRANSCRIPT
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© 2011 Dow Jones & Company, Inc. All rights reserved.
Managing Your Company’s Social IQ: How to Engage in Conversations that May Move Share Price
Martin Murtland, VP & Managing Director
Factiva Solutions for Communications Professionals
2 April 2012
PRSA Digital Impact Conference
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© 2011 Dow Jones & Company, Inc. All rights reserved.
Outline
• A Challenging Environment: Externally & Internally
• Social IQ
• Case Studies: – Netflix
– Goldman Sachs
– Costa Concordia
• Lessons Learned
• Best Practices
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Where Do Conversations Take Place?
Source: http://www.theconversationprism.com/
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More Channels, More Participation & Content Creation
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But Is that the Whole Story?
Source: The State of News Media 2012 by Pew Research Center
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Internally: Need Results that Move the Needle…
Budget Pressure & ROI
Time Not Scalable
Reputation Risks
Media Fragmented & Faster
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Reputation
“It takes 20 years to build a reputation
and five minutes to ruin it.”
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Issue Life Cycle: Timing is Critical... Anticipate
Issue Identification
Interest Group Formation
Legislation Administration Enforcement
Impa
ct o
n Fi
rm
Time
Impa
ct o
n Fi
rm
Time
Adapt to change Affect development of issue
Compliance & damage control
Strategy Focus:
Levi Strauss – Created policies & not focused on by activists Nike – Did nothing was attacked by activists & had to focus on damage control Apple – Foxconn and Apple to increase wages & working conditions as a consequence of Fair Labor Association report
Example: Working Conditions of Suppliers
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© 2011 Dow Jones & Company, Inc. All rights reserved.
Social Intelligence: Idea with a New Spin
• Social Intelligence: ability to understand and manage relationships and complex environments
• Today’s Challenge: understanding and managing relationships conducted through social media
• Developing a Firm’s Social IQ: – Provide Framework – codes of conduct, policies
– Empower Staff – tools, information, trust
– Participate – select best channels, use authentic voice and measure
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© 2011 Dow Jones & Company, Inc. All rights reserved.
Social IQ: How Do You Calculate it for a Company?
Company’s Social IQ = ?
Company’s Social IQ = Preparedness + Relationships + Goal Alignment + Impact
• There isn’t one set formula, but some recent company stories will provide ideas on how and why to prepare
• Like all tests… preparation is key
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Case Studies
Can we make a definitive case for social media affecting share price? Let’s take a look at a few case studies
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Netflix: There’s No Business Like Bungled Communication
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Netflix: Start Popping that Share Price
Source: Factiva
$0
$50
$100
$150
$200
$250
$300
$350
Jul 4 Aug 1 Aug 29 Sep 26 Oct 24 Nov 21 Dec 19 Jan 16 Feb 13 Mar 12
July 11 - NFLX hits all-time high July 12 - Netflix raises prices, unbundles DVD and streaming
Sept 15 - Warns it will lose 1 million customers Sept 18 - Unbundling “explained”, Qwikster and
spin off announced
Oct 10 - Qwikster cancelled
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How Does the Popcorn Taste Now?
-10
-8
-6
-4
-2
0
2
4
6
8
0
50
100
150
200
250
300
350
Jul 5 Jul 19
Aug 2
Aug 16
Aug 30
Sep 13
Sep 27
Oct 11
Oct 25
Nov 8
Nov 22
Dec 6 Dec 20
Jan 3 Jan 17
Jan 31
Feb 14
Feb 28
Mar 13
Insi
ght M
edia
Inde
x
Stoc
k Pr
ice
Stock Price and Dow Jones Insight Media Index Score
Stock Price Media Index
Media Index Score has recovered
Stock Price still not as tasty
Analysis by Dow Jones Insight
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© 2011 Dow Jones & Company, Inc. All rights reserved.
Qwik! Should This Have Surprised Netflix?
• @Qwikster already in use
• “Qwikster” was unmemorable and hard to spell
• How do you manage two different accounts?
• How many times can you raise prices in a year?
• Unbundling is harder than bundling
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Goldman Sachs: Why I Am… Starting a Media Storm
Sources: The New York Times; Felix TV, YouTube
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An Op-Ed Goes Viral Social Media Reaction Press & Web Reaction
Blogosphere and Twitterati jumped in
Spike in coverage vs. peers
Unfavorability spiked
Increase in stories around regulation and clients
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Words & Names Catch the Bug, Too… Sticks & Stones
• “Greg Smith” became prominent
• “Muppets” and “evil empire”, too
Analysis by Dow Jones Insight
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Coverage “Fever” Spikes, Price Declines
• Media “pile on” for surge in stories, posts, Tweets, videos
• Goldman Sachs stock price declined 3% but since recovered
• Will “names” hurt them?
Source: Factiva
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Goldman Sachs: A Swift Recovery?
• Since the financial crisis, continuous cycle of unfavorable reporting
• Latest PR storm seems to have Goldman Sachs “flat footed” and scrambling
• Is there a tactical PR strategy to deal with events on horizon e.g. Federal regulation?
• Much harder to deal with surprises
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© 2011 Dow Jones & Company, Inc. All rights reserved.
Issue Life Cycle: Timing is Critical... Anticipate
Issue Identification
Interest Group Formation
Legislation Administration Enforcement
Impa
ct o
n Fi
rm
Time
Impa
ct o
n Fi
rm
Time
Adapt to change Affect development of issue
Compliance & damage control
Strategy Focus:
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Costa Concordia & Carnival: Charting a Disaster
Source: WSJ.com; Guardia di Finanza/Associated Press
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Carnival Share Price: Rough Waters
Carnival stock falls after tragedy
Quality of coverage is showing gradual recovery
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Cruise Industry: Navigating Heavy Seas
Royal Caribbean also saw price decline
Positive media coverage helped stock recover
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Traditional Media: Taking the Helm
• Traditional news dominated coverage
• Unlike other disasters, social media coverage was NOT a driver
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Lessons Learned
• Nurture your firm’s Social IQ Social IQ = Preparedness + Relationships + Goal Alignment + Impact
• Netflix: Do your brand and product positioning homework
• Royal Caribbean: Be prepared to manage someone else’s disaster (Carnival)
• Goldman Sachs: Have strategy and battle plans ready to go
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Best Practices: Be Prepared Before a Crisis Hits
• Measure your reputation and Company Social IQ regularly
• Set a benchmark: create a baseline before a crisis
• Consistent language internally ,including up to C-suite
• Use technology and services to save you time
Pre-crisis level
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Best Practices: Be Prepared Before a Crisis Hits
• What are your reputational drivers and how to measure them?
• Who can we reach out to during a crisis?
• Where do we send our messages?
• What do we talk about?
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Best Practices: How to Prepare?
• Define reputation goals and determine ways to measure them
• Present goals and metrics to C-Suite: an established set of goals backed up by metrics can go a long way to illustrating how the business is impacted
• Where do I get metrics? Online measurement tools with quality content and/or custom reports built with close collaboration between you and the agency
• Start small, build understanding, evaluate results next to objectives, redefine objectives and repeat
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Best Practices: How to Engage?
• Reach out to key influencers
• Use channels important to your firm – B2B brands, e.g., industry blogs
– Consumer brands, e.g., Facebook
• Talk about issues of strength
• Measure and refine
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Barriers to Success: Equip Line to Engage
Barrier Solution Misaligned resources
Best people in high risk areas (global & local) Prioritise attention
Skills gap Measure & review competencies Risk mgt. training to staff Rotate staff into risk mgt. team Mentor with SWAT team of seasoned communicators
Lack of priority Clarify who owns reputation Empower line mgt. to manage reputational risks Track performance & goals Give input in process & tools Simplify to ease load
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© 2011 Dow Jones & Company, Inc. All rights reserved.
Barriers to Success: Equip Line to Engage
Barrier Solution Profit focus
Focus resources on: Greatest reputational risk Greatest return & chance of success
Know when not to engage Adds complexity
Simplicity (tools & processes) Involve line mgt. early Anticipate
Speed to act Broader line mgt. understanding Anticipate problems & gather facts before crisis Learn from previous events and institutionalize learnings Set triggers for a crisis response Clear channels for specific information
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© 2011 Dow Jones & Company, Inc. All rights reserved.
For More Information
Factiva Solutions for Communications Professionals Better Connections. Broader Metrics. Bigger Impact.
dowjones.com/factiva-communicator
The Conversational Corporation Engaging in the media measurement, analysis and PR strategy discussion
theconversationalcorporation.com
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