At Echo Research we are in the business of helping our clients understand the media landscape in which their brand appears and how best to interact with this media. Up until recently this was a relatively straightforward exercise, as we were largely dealing with established media sources whose reporting characteristics and target audiences were well known.
The advent of social media has added new colour and texture to this landscape. Where we were once surveying a level ground of almost predictable media channel behaviour, we are now facing a rocky terrain of communication uncertainty, ever-changing consumer engagement and a new breed of opinion leaders who can make or break reputation in minutes.
This outlook leaves many a communication team and brand manager with a dilemma: how to understand social media and make it work for their brand to achieve the most meaningful returns and levels of engagement. Crucial to understanding this landscape and how to engage with it is the need for social media measurement.
Here are my 7 considerations for social media measurement.
Understand why you are using social media channels: What is your business hoping to achieve through posting on these various channels? Define the outcomes you expect to see. Are they greater brand recognition? Rising follower numbers? A chance to grow customer base? Or are you doing it because you want to keep pace with your competitors? Without knowing 'why', you won't be able to develop the 'how' and the measurement of the 'what'.
Know the difference between social platforms: Not all social platforms are built equal. The scope for brands to promote themselves and the behaviour of fans are different on Facebook than they are on Twitter. As such, do not treat all fans and followers as equal. Target different fan demographics and the platforms they choose with different, tailored messages. Fans are individuals - hit them with messages and campaigns that are individual to them.
The KPI: develop a set of indicators that are in line with your business goals. Take time to think about point 1 so your approach to measurement is built around what you are hoping to achieve.
Measurement madness: just because something can be measured, doesn't mean you should. Start small with a concise number of KPIs that provide relevant and actionable measures for your business. More measurement produces more data. Bigger data produces headaches when it comes to extracting insight and intelligence.
Match KPIs with platforms: build metrics specific to each network. You cannot compare a fan with a follower, a like with a share, so don't try. Consider point 2 in order to determine useable KPIs on the platforms of choice.
Numbers game: fans and followers are more than simple subscriber numbers. Sure, you can measure a certain amount of success by rising numbers of fans and followers. However, to determine the value of these you need to understand who they are, their motives and intents. Are they passive subscribers or brand advocates? How do you interact with them and nurture their potential to be brand ambassadors? Never place too much value on follower numbers at the expense of sentiment and support.
Collect. Interpret. Learn: evaluate your measurement results and learn from them. Re-assess your KPIs and the social platforms you are operating in. Measurement is an ongoing and evolving process so continue to question 'why', 'how' and 'what'.
Only 3 months in and already it has been one of the most tumultuous and topsy-turvy years for one of the biggest of the entertainment industries.
I'm talking of course, about gaming. Not the gaming as in Pacman, quarters and nerds, but gaming as in Call of Duty, billion dollar global brands and a industry overtaking the movie industry in revenue.
Yes, in this modern world, gaming is something to be taken seriously as an entertainment medium and as a business . The coverage we've seen coming from the industry event known as the Game Developers Conference (GDC ) is testament to that.
I think it's fair to say that gaming has had a few high profile issues so far this year. Two rather large releases (that shall remain nameless) have been met with less than rapturous acclaim from journalists and by the consumers themselves, gamers.
As a direct result of these two, very different releases, as different as say...... two simulated alien colonial cities **knowing wink from author**, the reputational damage to the publisher and developers behind them has been palpable. Armed with a righteous sense of indignity, an often tenuous grip of the English language and a host of platforms to vent their frustrations on, the sharp end of the gaming community has been very vocal indeed.
At GDC the legacy of these high profile incidents drove some of its major themes. The three big themes we saw coming out of GDC all predicted a future direction of the gaming industry and in fact all the talk of future & change was a strong theme in itself.
The year of next-gen...? Certainly
The year of indie..? Could well be
The year of mobile gaming...? This writer is still not convinced on that one.
When we monitored the online chatter around GDC this year, we saw the usual patterns of low engagement in the build up to the event, big peaks during the event and a gradual tail off of chatter post event. This is nothing surprising or out of the ordinary, that's what any PR or marketing exec would have predicted.
The interesting thing that did emerge from our look at the buzz was the difference in coverage from the two big competing hardware brands over the course of GDC, Playstation and Xbox (omitting Nintendo as their latest console is already out)
It should be noted that not every mention is specifically about the hardware but even so, Sony have announced their PS4 system but Microsoft have kept quiet as yet but almost certainly have a successor to the all conquering Xbox 360 and the smart money is on them unveiling it at their press event on April the 26th.
That tactic looks to have paid off as Xbox brand coverage wiped the floor in volume of mentions over Playstation brand coverage. Whether its games, hardware, rumours or expectant chatter from gamers, a large proportion of the online buzz seems to be about Microsoft's new system and this is some achievement given Microsoft's recent gaming reputational issues with Windows 8 and tight lipped silence so far, on the next generation.
Whatever this year holds for the gaming world, next gen consoles, the fall of the big publishers, the rise of the indie publishers, microtransactions, always online DRM, mobile gaming, scalable engines, destructible scenery, yearly sequels, android consoles or even VR, that the influence of consumer sentiment expressed through social media, forums and comment tails is now a bigger driving force for gamers' buying habits than a games marketing campaign.
Publishers now have a reputation defined by many influences, some out of their control. A CEO's statements about monetization now has a significant effect on a publisher's brand reputation and this brand reputation, based on how a publisher's business actions are interpreted by press and gamers are becoming as much as a driver for game buying choices as review scores.
In a year where the industry is looking to its future, often its focus due to the nature of the beast, it's this writer's opinion that game publishers should be looking at how their brands are truly seen now so that the bright next future actually materialises.
The dominant theme of the second, conference day of the World Federation of Advertisers annual Global Marketer Week in Brussels was purpose. Purpose. The role that brands play in people's lives beyond the purely functional; the role of brands in society; their responsibility for giving something back; how brands enable positive change; what brands stand for; what their higher sense of purpose is in the world.
Time and again, different presenters showed how brands with a purpose - a raison d'être beyond pure profit and market domination - are better able to start and sustain meaningful conversations with customers, consumers and stakeholders. In each case, this isn't about corporate philanthropy of its own sake; it's about doing well by doing good, whether the purpose delivers social, environmental or economic benefits.
Kimberly Kadlec, CMO of Johnson & Johnson, set the bar high by showcasing an inspiring range of real life stories that deftly demonstrated the purpose that J&J has written into the heart of its brands' DNA, and the way that it has embraced real-life storytelling to make each individual purpose come to life. She showed how social and digital technology - exemplified in J&J's YouTube platforms and health channels - have transformed how the company reaches, builds and sustains patient communities. And she revealed how the company has evolved and rewritten the classic 4 Ps of marketing, from Product, Place, Price and Promotion, to become Purpose, Presence, Proximity and Partnership.
The theme of purpose was picked up by Manuel Patricio, CMO of AB InBev, and by Marc de Swaan Arons, Executive Chairman of Effective brands, stepping in at the last moment for Antonio Lucio, the global CMO of VISA. They both talked a lot of hard commercial sense about purpose, as did representatives of both the WFA and Edelman, reporting back on two recent studies. The WFA had polled its own membership about purpose, and was sharing findings from 149 members worldwide. And Edelman presented the findings from its most recent "good purpose" study, the fifth consecutive, annual study, which interviews 500 consumers in each of 16 markets worldwide, in both developed and developing economies.
Some highlights of these parallel studies included:
- 56% of brand custodians think that consumers are happy if brands "do well by doing good". Consumers are rather more bullish - 76% of consumers are actively looking for brands to build purpose into their core proposition.
- Consumers don't just seek brands with purpose in developed economies. In fact, consumers in emerging, particularly BRIC-MIST markets are more prepared to pay a premium for brands with a purpose. For some emerging markets, indeed, consumers are twice as likely as their peers in developed economies to reward brands for attaching themselves to and espousing a strong and relevant purpose.
- These findings reflect the results of a global study done by Ebiquity's reputation practice, Echo, and Boston-based CSR PR firm Cone Communications in 2011.
- A purpose needs to be fit for purpose, and successful purposes are generations beyond simple cause-related marketing tie-ups. Marketers are sensitive to the need for appropriateness of purpose, with 57% agreeing that not every brand can have a purpose without it feeling contrived. This is something that an overwhelming majority believe brands should strive to avoid.
- The company generally agreed to have embraced purpose-led marketing to its heart most effectively is Unilever - think Omo/Persil's Dirt Is Good and Dove's Campaign for Real Beauty. Unilever was closely followed by P&G, Coke and McDonald's.
The day was rounded out by one of the most impactful marketers of his generation - Andy Fennell, global CMO of Diageo. He talked of Diageo being in the aspiration game, whether they're selling a bottle at $5 or $150,000 (the 60 bottles of 1952 vintage Scotch blended to celebrate the Queen's Diamond Jubilee), Diageo is inviting consumers to buy a product that is more expensive than it needs to be for purely functional effects.
Fennell moved talk of purpose on to focus on "endeavour", and revealed that the company always gets its brand managers to ask and answer the killer question "Why does my brand exist?" By stripping brand purpose back to bare bones, by relentlessly focusing on the role the brand plays in the lives of its consumers, Diageo - like some of its cutting-edge peers - is helping brands to consolidate their social utility, in addition to their functional and emotional utility.
|Titbit of the day: the inimitable, irrepressible Vice Chairman of Ogilvy, Rory Sutherland, was without doubt the star turn of the conference, engaging and lifting the room of 300 senior, post-lunch marketers with a canter through behavioural economics. The classic "Plink, plink fizz" line for Alka Seltzer - suggesting that users plinked two tablets into their tumbler of water rather than the usual observed behaviour of one - saw a sustained sales uplift of 65%.|
Ebiquity is the Effectiveness Partner of the WFA and sponsored the WFA's 60th anniversary dinner on Wednesday 6 March 2013 in Brussels.
Social media has transformed the way consumers interact with brands.
Sam Knowles charts the rise of the social media consumer.
Social media has changed the world - and particularly the world of brand management. Influential and connected consumers, customers and stakeholders are increasingly playing a key role in building and sustaining - but also damaging - corporate and brand reputations.
Our recent research for both UK-based PR consultancy Fishburn Hedges and American Express have charted the inexorable rise of the social media customer.
The Fishburn Hedges study shows that by April 2012, more than a third of Britons (36%) had interacted with brands through social media. This has nearly doubled in just eight months. In August 2011 just 19% of British consumers had used social media in this way.
Similarly, the 2012 American Express Global Customer Service Barometer showed that 17% of Americans had used social media at least once in the past year to obtain a customer service response. These studies show that the brands that embrace social media and use it intelligently as a customer service tool will be the long-term winners in the reputation game.
Twitter is fast becoming the new call centre, and this will have a profound impact on how companies monitor, staff and respond to customer comments and complaints.
The Fishburn Hedges study found that using social media to interact with brands is more satisfying for the complainant. Sixty-five per cent of consumers who complain on social media prefer it and call centres have become a turn-off.
Novelty is part of the appeal but also thanks to social media's real-time immediacy, customers are getting responses that are dealt with more personally and more quickly than ever before.
Moreover, more than two-thirds (68%) of those who have used social media channels to communicate with brands believe it gives them a greater voice, and 40% of all consumers believe that social media has improved customer service for good - whether or not they currently use social media for customer service.
Similarly, American Express's 2012 Customer Service Barometer found that US consumers who use social media for customer service are more likely to tell others about their customer service experiences, spend more with a company they feel provides excellent customer service and abandon a purchase due to a poor service experience.
Using social media for customer service is also not just the province of the younger, Generation Y and Generation Facebook customers. The Fishburn Hedges study found that not only had almost half of 18-24 year-olds questioned dealt with a brand using social media, but that 38% of 35-44s and 27% of over 55s had done the same. As social media comes of age, the proportions for all age groups are increasing.
Out in the open
Using social media in this way is, of course, much more open and permanent. This makes it potentially more damaging to brands and companies. When a consumer tweets how dissatisfied she is with a hotel, @ing the company Twitter account, she not only records a complaint with the brand.
When a frustrated broadband customer posts a blog linked from his Facebook page about being disconnected for the fifth time that week, it doesn't just arrive in the cable company's inbox.
Echo's study for American Express have found that those in the US who use social media for customer service tell more than three times as many people about poor service than those who don't use social media in this way. The upside is that when it comes to good service, the number is nearly five to one.
The implication is clear: get it wrong, and you'll be flamed; get it right, and you're using social media to capture and harness a volunteer sales force. Companies that engage in the right way can turn detractors into advocates.
The way social media currently works also varies from country to country. Fifty-four per cent of Indian consumers have used social media to get a customer service response during the past year, 45% in Mexico and 30% in Italy. This contrasts with just 10% in France.
Consumers in the US and Germany are most likely to use social media to get an actual response to help with a service issue (50% of those polled). Those in the UK are more likely to use social media to vent frustration with a bad customer service experience (46%), while consumers in India are most likely to ask questions of others via social media (also 46%).
On average, nearly half of consumers who have used social media to get a customer service response see an improvement in terms of how quickly they feel companies respond to general inquiries or complaints. Consumers in India (80%) and Mexico (72%) are most likely to say that companies have generally improved.
Do the right things
As part of our research for Fishburn Hedges, in-depth, qualitative interviews with social media pioneers inside savvy brands helped us to identify a range of best practices (see box). Companies that make best use of social media for customer service are fleet of foot. They don't let genuinely damaging content linger and fester. But they also are selective about what they respond to, when and how they respond to it.
Just because an individual - or a group of connected individuals - are talking negatively about your product, don't just dive in and try to sort the problem out for effective engagement. It is critically important to understand the full context of the comments and complaints.
There's plenty of evidence that more and more companies are looking to emulate these pioneers. A snapshot of jobs advertised on LinkedIn during one month in 2012 found vacancies for 279 heads of social media and 1,062 social media consultants. What's more, 134,974 roles had "social media" in their job title or job description.
The rise of social media has made service quality more transparent and important than ever before. Brands and services that fail to live up to their promises will draw the opprobrium of disgruntled customers, criticism that often leaves an indelible trace for future customers to find.
Establishing relationships with customers, listening to their comments and complaints, and sorting out problems quickly and politely can stop a complaint dead in its tracks. Our research shows that customer service has become a strategic differentiator in the marketplace.
Social media in customer service is taking off as real people are responding, rather than callers being stuck behind automated call routing and messaging. The best companies are training and releasing their staff to manage this in a professional and responsible manner. Welcome to the new world of 'social business'.
Best practice for social media customer service
1. Don't be paralysed by uncertainty: where call centres arguably erect barriers between brands and customers, social media can remove them and bring proximity. It shouldn't be a psychological straitjacket, so join in - but clearly define your strategy first.
2. Don't let social media define you: your brand must define it. It must be a continuation of the brand using the appropriate channels and not a knee-jerk reaction to following how others are using it.
3. Make more of the emotional insight you have: customer data offers insight into behaviour, but social media takes that to a different level, enabling brands to tap into emotions.
4. Pick your battles - but enter them fast: speed is critical in the real-time world of social media, but brands should not feel the pressure to answer every query put to them.
5. Address structural barriers in the business, not just headcount: there are many ways to resource social, and new hires are not always necessary. Try sharing expertise and removing structural barriers first.
6. Fear not the #fail: No one is perfect and sometimes, just sometimes, it is simply a flash in the pan.
Follow Sam on Twitter: @samknowles
For the last three days of last week, the great and the good of the world's reputation and PR measurement and evaluation community came together in Dublin under the banner of our representative trade body. It was time for the 4th Annual European Summit of AMEC - the Association for the Measurement and Evaluation of Communication for long.
Measuring the outputs, outtakes and critically the outcomes of communications activity designed to sustain and build corporate and brand reputations used to be relatively straightforward. Each reputation research house had its proprietary methodology for aggregating, interrogating and making sense out of media coverage and stakeholder opinion and sentiment.
But then, like an overflowing crèche of boisterous toddlers suddenly appearing as if from nowhere, social and digital media made things a whole lot more complex. Brand management was firmly wrested from the hands of brand custodians. Influential and connected consumers, customers and opinion-formers found platforms for their voices. Dialogue replaced monologue, and many more voices mattered. Brand owners responded with a variety of strategies, from investing in intelligent, bespoke metrics
to burying their heads in the sand and hoping social media would go away.
And those in the business of measuring and evaluating reputation all did something - some did a very great deal of smart stuff - but most of these somethings were idiosyncratic and unaligned. The Darwinian business imperative of dominant competitive advantage did a fundamental disservice to clients looking to compare apples with pears.
Since the advent of social and digital media channels, AMEC, which represents those who matter in the reputation measurement game, has really come into its own in setting and aligning standards across our diverse industry. The first public-facing landmark in this process was the creation of the Barcelona Principles at the 2010 AMEC Summit. Bringing together existing best practice, this set of seven principles set the industry on the right path for measurement across all different facets of earned media, encompassing traditional and the proliferation of social media channels. It also sounded the first (of many) death knells for less meaningful measurement practices, including the zombie pariah of the industry, AVE - Advertising Value Equivalency.
Last year, jumping across the Iberian Peninsula to Lisbon, AMEC's members were introduced to the valid metrics framework, a standardised approach to help ensure reputation research agencies and clients measure the same kinds of metrics in the same kinds of ways. This was an approach of similarity, not a cookie-cutter model. The framework conceptualises all indirect communications as moving a target audience across a spectrum of engagement and empowers those in the business of comms measurement with a common worldview and methodology for mapping progress on that journey.
And so to Dublin last week, where highlights of the dialogue and debate included clients from private and public sector - and their M&E agencies - demonstrating the power of the valid metrics framework in action. On the last day, the standout session saw leading thinkers in the field @kdpaine and @tmarklein unveil AMEC's new, industry-standard template to drive transparency across social media research, analytics and measurement services. The philosophy of Barcelona was followed by the strawman of Lisbon and now - at last - the dynamic working model of Dublin. It truly felt like we'd moved from the talking shop to the workshop, from the ethereal to the practical. We got so down and dirty in Dublin, I have no doubt that delegates will have had the nail brushes out over the weekend.
Industry and trade association events are interesting for many reasons. They're like a prolonged period of ceasefire, when companies usually at one another's throats leave competition in the hotel lobby and work together for everyone's benefit (while at the same time representing their own smart thinking to their peers). They let you learn what the competition is up to, and provide inspiration - often from unexpected sources - for your own innovation. You learn skills and content
relevant for business development, forge alliances and open up prospects through networking.
What I found distinctively different about the Dublin Summit last week was how, under the light-touch leadership of @BarryLeggetter, AMEC is an organisation that can do all of this and more. It's not only representative, it's not only relevant, it's also increasingly - and impressively - action-oriented. The week will lead to what's already been dubbed the Dublin Declaration, the industry will do what it does better, and clients will be better served.
You can't ask more than that. And as befits a grouping of comms measurement professionals increasingly focused on making sense out of social media dialogue, the quality of Twitter action throughout the #AMEC2012 Dublin event was top class. You'll get a sense of the debate in this Traackr A-list, even if the tool to track conversation is not one that delegates chose to endorse.
Roll on 2013.
What is Reputation Research?
In order to thrive in today's ultra-competitive, connected market, companies and brands need to actively monitor and then manage their reputations. This means knowing what those key stakeholders inside and opinion-formers outside the company think of it. It means keeping an informed eye on what the mainstream media are writing and broadcasting about it. And it means making sense of what connected customers, consumers and stakeholders are saying about it. For in the age of social media, brand management is no longer the preserve of the brand manager.
Why should you carry out reputation research?
Companies and brands should conduct reputation research to benchmark how they are performing against market expectations and against competitors. By measuring, monitoring and benchmarking corporate and brand reputation, they can make informed, evidence-based decisions about what they need to do and say differently. Done right, reputation research should inform, define and refine comms strategy and behaviour in the round.
Who uses reputation research?
All sorts of organisations use reputation research. Public, private and third sector. Profit, not-for-profit and education. B2B and B2C. Any and all companies and brands that have a reputation at some level in the public domain. Organisations that have discrete and identifiable stakeholder groups who help to shape opinion and attitude that can impact - positively and negatively - on reputation and performance.
Typical buyers of reputation research include:
- Consumer brands that have lost their sparkle or are challenging for market leadership
- National, international and transnational Government departments seeking to engage and influence their constituency
- Multinational corporations looking to expand into new markets, either creating new categories or entering into hotly-contested space
- Financial services corporations operating in tightly regulated markets
- Academic institutions looking to reposition or consolidate their offering to prospective students
- Companies whose licence to operate can be compromised by misuse, such as the food, alcohol and automotive industries
Buyers come from a range of disciplines, from corporate communications to marketing, investor relations to marcomms, integrated comms to procurement.
How do you get the best out of reputation research?
To get the best out of reputation research, organisations need to abandon fear of what the research may show and empower and encourage their research partner to ask the questions of the stakeholders and opinion-formers that matter. They should enter into the process of commissioning reputation research with an open mind, ready to change, and not just looking for answers that confirm their hunches. Although they will have their preconceptions of what the answers might be, they need to trust in a skilled research partner to unearth the actionable insights that can enhance communications and business performance, even if those insights sometimes bring uncomfortable truths with them.
What are the costs and benefits of reputation research?
Like all genuinely insightful management information, reputation research comes at a cost, though starting with a toe-in-the-water piece of qual research among targeted stakeholders need not be expensive.
The benefits of reputation research can be huge. By correctly understanding and interpreting how the organisation performs on the reputation drivers that matter to its unique group of stakeholders, the leadership can make the informed, evidence-based decisions they need to improve both reputation and performance. Reputation research is about more than just effective communication. Proactively managing reputation leads to improved business performance.
At Echo Research, Ebiquity's reputation research practice and part of the Ebiquity family since 2011, we focus exclusively on reputation research. Through primary market research, in-depth media analysis and cutting through the clutter of social media, we help companies and brands protect, manage and grow their reputation to help grow their bottom line.
British consumers are increasingly turning to social media sites to 'hashtag' and 'bashtag' brands, rather than calling their customer service centres.
Brands also feel the change, and are starting to work out the best ways to engage and tackle the social media customer.
Echo Research and Fishburn Hedges identified six actionable insights that well-known brands, such as Barclaycard, BT and Sainsbury's often practice, such as 'choosing the right battle - but entering it fast' and 'not letting social media define you'.
But how did we reach this conclusion? To start with, Fishburn Hedges ran an online poll with 2,000 consumers nationwide, followed by in-depth interviews, conducted by Echo Research, with several blue-chip companies, including PepsiCo, HSBC and Oasis.
The social media savvy brands were more than happy to speak to us about topics including: their use of social media, who is responsible for their social media sites, whether they've ever experienced a customer backlash and how they dealt with it, and how they publicise their use of social media sites.
At Echo Research, we often conduct qualitative interviews to get to the heart of an issue, while probing and prompting our way through a series of questions and answers. We find that this traditional - analogue! - method is still one of the best for understanding a customer, stakeholder or opinion former, to ensure that an opportunity or threat is understood in depth, so that clear recommendations can be accurately passed to a client.
However, as our research shows, qualitative research works exceptionally well when hand-in-hand with quantitative research. The findings are more substantive and robust, yet also are rich with ideas and opinions. On this occasion, merging the insights from customers and brands offered a truly holistic picture of the current situation from both sides of the cash till to ensure that the findings are more insightful, powerful and genuinely actionable. We also have the technology to make sense of social media through our Echo Sonar platform, sorting the digital wheat from the chaff, enabling brands and companies to understand whether there is genuinely a storm brewing or whether it's just in a teacup.
Dan Soulas explains how what stakeholders think of your brand is responsible for an average of 31% of US share prices.
Few CEOs would question that corporate reputation ranks amongst their most important assets. However, hardly any would be able to say exactly how much it's worth.
More importantly perhaps, few would be able to say with any confidence that they knew exactly what they should be doing to manage and ultimately maximize the value it represents.
Our research, however, reveals that:
- Corporate reputation was adding close to $3.4bn of shareholder value to companies across the S&P500 as at August 2011.
- The proportion of a company's market capitalization attributable to reputation averages 31% across the S&P500.
In fact, a rise in the value of corporate reputation in the last four years has laid the foundations for the share price recovery that we see today. Although many corporate reputations suffered in the turmoil precipitated by the failure of Lehman Brothers in 2008, reputation has been an important driver of stock price growth since then.
Our analysis shows that in the immediate aftermath of the 2008 market collapse, the average contribution of reputation to company value in the S&P500 fell by 3 percentage points to 13%. Since then, it has grown steadily in absolute terms and now represents 31%.
Naturally as reputation has grown its share of company value, some companies have performed better than others. The average contribution of reputation of the largest 20% of companies (by market cap) tracked is 45%. The top performing organizations are Apple and Google with a 58% contribution.
By contrast the contribution of corporate reputation in the bottom 20% of companies analyzed is only 13% and, in many cases, poor reputation is destroying value and reducing market capitalization.
The bottom line is that corporate reputations are now underpinning investor confidence in companies' ability to deliver the economic returns expected.
On the whole, the larger, and arguably more "communications sophisticated" companies, are more successful at creating value through their corporate reputations.
Nevertheless reputational value can be a fickle friend and can, and sometimes does, change quickly. Although the reputation contribution of the companies common to both our 2011 and 2010 studies increased by an average of 11%, individual changes ranged significantly.
The 10 largest risers registered an average increase of 28 percentage points while at the other end of the spectrum the 10 largest fallers declined by 11 percentage points.
What chief executives really want to know, however, is how corporate reputation can grow shareholder value.
Our analysis shows that on average, a 5% improvement in the strength of a corporate reputation of an S&P500 company can be expected to deliver an increase in market capitalization of close to 3%.
Furthermore, a better reputation will also increase the investment community's confidence in a company's ability to deliver the returns it promises.
The bottom line is that investment in building corporate reputation pays dividends and investment in understanding which particular components of reputation offer the greatest returns will enable companies to maximize them.
Social media demands that companies link both their paid and unpaid communications and measurement. Andrew Challier asks what this means for brands.
In the age of the informed consumer, big brands are subject to an unprecedented level of scrutiny. That scrutiny extends way beyond the confines of their products and financial performance.
If brands are under the microscope, it is social media which has provided the means to dramatically increase the order of magnification. The bigger the brand, the bigger the target, and so the bigger the threat posed by what would historically be labelled a 'PR crisis' but which now should be seen just as much as a 'brand crisis'. BP, Toyota, almost any bank and, most recently, News International have all suffered from the attentions of the social media 'chatterati' as well as the mainstream media.
On the plus side, however, the opportunity to manage the crisis - via the same social media channels - is greater than it ever has been.
We all recognise that 'reputation management' seeks to mitigate the negative and accentuate the positive. In this new world, however, we also need to recognise that reputation management is no longer the preserve of the Corporate Affairs function, nor is 'brand management' the sole preserve of Marketing. The consequences of misaligned communication have never been more critical.
A greater variety of Influencers
Reputations and brands are impacted by a wide variety of stakeholders, internal (staff) and external (consumers, investors, lobbyists etc) and businesses need a way to measure, manage and influence these various constituencies. Paid media is an important part - but only a part - of the picture. Brands need to benchmark and analyse both paid and unpaid media, to help identify both the 'danger signs' and the opportunities.
To create effective tools, a brand needs to understand the context for how its key products (within key markets) - and those of its competitors - are being discussed in social (and editorial) media around the world. This helps start to build an understanding of the issues of most importance and how they might choose to engage with relevant groups/audiences in a relevant way.
At the same time, by benchmarking paid-for messaging versus their principal competitors, companies can analyse the extent to which they are able to 'own' important topics and the extent to which they or their competitors are achieving better alignment between what is seen as important and the messages transmitted. Benchmarking the price paid for that media and the quality of its placement completes this circle.
Choosing the right measures and tools
There is an increasing amount of message monitoring software available to brands - paid, unpaid and social media etc. Most of it adds little value: whilst it aggregates the data, it lacks the human intelligence to draw meaningful, business-relevant conclusions. Clients are demanding an integrated 'vital signs' marcomms monitoring service tailored to their individual needs. Such a system need not be complex (in fact, the less complex the better), but the benefit is magnified when the total picture is assembled from a single, impartial perspective. And it only works to its true potential when brands have identified the correct KPIs within the business that can be reasonably linked to the benchmarking.
While brands might wish for the holy grail of a 'one size fits all' brand optimisation tool - simply drop all the ingredients in the top, pull a lever (or push a button) and out drops an optimised plan at the bottom - the reality is that there are very good reasons to use a combination of methodologies and tools.
For example, digital measures frequently underplay the contribution of offline marketing and other media 'levers' and, while econometric modelling is great at budget allocation and provides a powerful basis for budget optimisation between markets, brands and different channels, it rarely reflects the importance of reputation.
Different - and appropriate - techniques are available for measuring the corporate value of reputation. The 'brand lesson' which we preach, therefore, is to understand how these different measurement techniques are best used - not to provide a universal panacea, but to inform better quality decision making.
Ensure that corporate and brand messaging are aligned - addressing the key issues in a coordinated manner.
British Airways is aiming to rekindle pride among staff and consumers via a new 'heritage' marketing campaign; the aim is to regain the trust of both the general public and its own employees disillusioned by strike action, cancelled flights and low morale.
Ensure that the company organisation is aligned organisationally. This doesn't have to imply a merger between corporate affairs and marketing.
Nestlé has appointed Pete Blackshaw - author of Satisfied Customers Tell Three Friends, Angry Customers Tell 3000 - as Global Head of Digital and Social Media, with dual reporting lines into the global heads of both Corporate Affairs and Marketing.
Ensure that tracking and measurement are able to answer these two questions from a consistent and comparable perspective: - What are people saying about us and our competitors? - What are our competitors saying about themselves?
In response to client demand, Ebiquity has developed an integrated message alignment reporting and benchmarking service, which draws upon data from its Portfolio and Echo Sonar monitoring software, and which feeds into both the marketing and corporate affairs functions.
Fate, coincidence, alignment of the stars - call it what you want all I know is that last night I had one of those strange experiences where you feel someone out there has an inside track on your life (and I'm not ruling that out by the way as I've just re-read 1984).
Let me fill you in.
Just last week, Echo Research - the global leader in communication and reputation measurement - was acquired by Ebiquity plc, the global leader in media and marketing measurement. Put simply it means that together we can now measure and analyse how effectively a company's communication is working together to achieve its goals - are their PR, advertising, marketing, sponsorship, online etc all aligned and on message and if not why not?
Yesterday was our 'getting to know you' day, as our two teams shared ideas, approaches and were introduced to their new colleagues - an inspiring day all round. So imagine my surprise when on the way home I read Gideon Spanier's excellent article in The Evening Standard, where he very neatly outlined the breaking down of the barriers between content and advertising.
We have reached the point when neither can be seen in isolation, or as standalone components of the communications mix. Now all communications must be joined up, working together to tell the story, to tell it clearly and show that it means what it says.
So no wonder I felt like Winston Smith for a split second - this is exactly the space that Echo and Ebiquity operate in - Gideon was talking to me, about me. Then the paranoia wore off and reality set in. This convergence of media, communications and marketing and their collective impact on reputation were the precise reason that our two companies had come together. This is the direction our world is moving.
Clients have been telling us for some time now that they want to link the various strands of their communications mix across the business, to understand what the common voice is and that all are working to the same ends - but this comes with a realisation that it's far easier said than done. Gone are the days of marketing, advertising, sponsorship and communications departments working in silos - now the opposite is true - so how do they work together?
Of course social media is to blame; it always is, no matter what the subject.
To me, it's simply about authenticity. Think back to the bad old days where the consumer's voice was a letter to faceless bods in a company that didn't even know you existed. A one-way (if you're lucky two-way) conversation to share your grievances and that was it - nobody else knew about it apart from close friends, family and anyone else you cared to tell about it and ok, they may have sympathised with you but the point is it didn't change anything - we all just carried on being a bit disgruntled - that's how it worked.
Through the power of one way media they could tell you they were the most customer-friendly company in the world or had your best interests at heart but the reality could have been quite different - authenticity was undermined.
Social media has put paid to that! Nothing is secret in social media, nothing is personal and nothing can be ignored. If you let someone down, you'll hear about it on social media (ask Dave Carroll) So if you're claiming one thing in your communications and you're delivering something else - you'll know what to expect.
Okay, that's been the established model for a while now but it's brought about a subtle change whereby authenticity is now placed at the heart of everything leading companies must do - there is nowhere to hide so you might as well be up front about it and you MUST be consistent about it.
Mix your message, confuse your stakeholders or worse, fail to deliver against your promises and you'll be found out. So, no, it's not about how good your advertising is any more or how well your PR is working for you - it's about how well they're working together, how clearly they are delivering your message and how well they are instilling trust.
For those that get it right then that social media machine will shout it from the rooftops and the word will spread like wildfire - get it wrong and Room 101 awaits.