Another overstated business truism: unpopular industries are highly vulnerable to social media

February 21, 2016

Social media poses a threat to to unpopular industries and companies, so the cliché reads. Supposedly, the social media nous of activists, the fast spread of criticism, in parallel with growing popular concerns over corporate conduct and calls for greater transparency, makes companies on the wrong side of the public debate highly vulnerable.

True. Companies have taken a hit after being targeted by campaigns that have spread far and wide in part thanks to social media. Think Shell and Arctic exploration: drilling was abandoned last year. Or Nestle and palm oil. Or Starbucks and tax. These campaigns are amplified by the nature of the modern news cycle. In that there isn’t one: you can’t kill a story that lingers on Google and keeps garnering social shares. No doubt lots of companies have felt compelled to improve business practices to avoid being attacked. Which is a good thing, clearly.

But the cliché is a tad overstated.

It ignores the fact that unpopular industries and companies can themselves use social media, and other online tactics, like data analysis and content marketing, to their benefit. They can use them to identify risks, manage issues and crises, help deliver their side of their story, rebut inaccuracies and showcase transparency and general good-will.

Also, it exaggerates the extent to which people care about good corporate citizenship. Being good matters. Beyond being the right thing to do, it helps attract investment and talent, and will make scrutiny and reproach less likely. But it doesn’t matter that much, right now, all the time. I recently wrote that the notion that corporate behaviour drives consumer-purchasing decisions is overstated and that plenty of unpopular companies do just fine. People will purchase goods and services based on price, habit and ease more than behaviour and reputation. Hence why most campaigns targeting unpopular corporates fail to take off. Certainly, social media poses risks in that a dud product or service will be exposed fast on social media, to great cost. But this is hardly the prerogative of the unpopular, but rather, of the incompetent.

The cliché further overstates the impact of campaigns that actually do take off in terms of numbers reached. The cost of engaging in a campaign is now so low (the proverbial click by a slacktivist) that dozens of campaigns with millions of supporters can run simultaneously on online petition sites while saturating our social media feeds. As a result, campaigns compete with each other and we become immune to them. A campaign has to be truly outrageous to hit a collective nerve. If we loosely define “impact” as a mix of the following – substantial and sustained cross-over to mainstream discourse, and subsequently, negative effects on sales, and/or greater risk of long-term reputational damage, and/or harmful regulation and licence to operate limitations – the number of campaigns with true “impact” is very limited indeed.

Similarly, the cliché implies that amplified criticism invariably damages an industry or company’s standing. It’s not quite that simple. In its Authenticity Gap research, my former employer, FleishmanHillard, stresses that reputation is driven by the difference between expectation and experience across a series of variables. Simplified: if someone expects a company to be highly innovative and it is not, say a tech company, it will take a reputational hit. Likewise, if a company is not expected to be environmentally friendly at all, say an oil and gas giant, but it then exceeds expectations ever so slightly, they’ll actually accrue reputational benefit (perversely, some may think). By no stretch am I implying that companies that are not expected to behave well should not bother, but it does highlight the nuances.

In conclusion, should companies and industries on the wrong side of the public debate stop worrying so much? Of course not: the scrutiny that social media enables is real. This is true for both the popular and the unpopular. And if they are on the wrong side of the public debate because they are truly unpleasant, the good times won’t last. But for those somewhere in the middle, they should probably expend more effort on harnessing the benefits of social media and other online channels and tactics, rather than worrying about the naysayers.

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