The Internet and Corporate Reputation

Transcription

1 The Internet and Corporate Reputation What you need to know Windfall Media

2 How the internet is affecting the corporate reputation of AIM quoted companies Online reputation The power of search engines and speed of re-publication on the internet means that damaging tweets and blog posts can become big news very quickly and remain on the internet for search engines to pick up, often with detrimental effects on corporate reputation and share prices. An increasing danger is for malicious individuals and opportunists to post allegations on market information websites, either to cause damage to the company or profit from the subsequent swings in share prices. These allegations, invariably made anonymously, can gain significant traction and create uncertainty, which is often the apparent intention of perpetrators. AIM companies AIM companies are particularly susceptible to such attacks since their share prices may be more vulnerable in the market to such rumours than larger companies. In conjunction with The Quoted Companies Alliance (QCA) we have conducted a survey of CEOs and FDs of AIM companies to see how they are using social media and how internet attacks have affected their businesses. The results are surprising. What is clear is that whilst this is a very real and growing problem, businesses are not as prepared as they should be to spot and respond to online attacks. A snapshot of the results is shown below. For a more detailed analysis, see the last page for relevant contacts. 1. Social media is alive and kicking in AIM companies 30% of AIM companies use social media for marketing & PR Two thirds of the companies we surveyed are using social media or are considering using it as part of their marketing and PR strategy. Whilst Facebook and Twitter proved most popular, significant use is being made of corporate blogs and discussion forums. Does your company use social media as part of a marketing/public relation/ investor relations strategy? If so what social media do you use? Twitter Facebook 37% 33% 30% Yes No, not considering No, but considering 23% 6% 9% 11% 11% 23% 17% Corporate Blogs Company s own forum Industry forums You Tube Other

3 2. Don t ignore the risks for corporate reputation AIM companies are experiencing damaging material and rumours on the internet 43% of companies surveyed have been victims of untrue allegations or rumours on the internet, of which over 50% were made anonymously. Are you aware of your company being the victim of allegations or rumours on the internet? 57% 43% Yes No Of those who experienced damaging allegations, 50% of the allegations were made on blogs, 40% on discussion forums and 10% on social media websites. 60% of the companies that had been victims of untrue allegations or rumours on the internet said the allegations were likely to have an impact on the company s share price. If so, has such damaging material been posted on: Do you think the damaging material had any impact on the company s share price? 10% 20% 40% 50% Blogs 20% 60% Likely Discussion forums Unlikely Social Media Websites Unsure There is increasing concern about the effect of online rumours on share prices on the AIM market and this survey demonstrates that some companies are not as ahead of the game as they should be. Tim Ward, Chief Executive, The Quoted Companies Alliance (QCA)

4 3. Monitor your online reputation Speedy reaction is key to avoid a knock-on effect on share price Only 60% of the companies surveyed are actively monitoring their online reputations, mainly through PR agencies. Only 4% were using specialist monitoring companies. 34% still relied on search engines such as Google. Is your company actively monitoring its online reputation? If so, by what means? 8% 4% 40% 60% Yes 34% 54% Through PR agencies Search engines Other means No Using specialist monitoring companies Social media monitoring is a vital first step in managing corporate reputations online. The latest software can allow companies to track conversations in real time and act quickly to douse the flames of false rumours and innuendo. Andrew Orchard, Managing Director of Windfall Media, specialists in crisis management, online surveillance and advisory services to a wide variety of listed companies Over recent years, we have worked on numerous cases where significant reputational damage has been caused to companies and their executives from online sources. Often, a speedier response may have mitigated much of the damage. Dan Tench, Partner, Olswang

5 4. Be prepared and don t stick your head in the sand Legal, PR and monitoring specialists know when to react, and when to do nothing 46% of the victims of untrue allegations or rumours chose to do nothing, with only 31% seeking removal through legal means and 15% using other techniques such as search engine optimisation. How did the company respond to the damaging material? 15% 31% 8% 46% Ignore it Seek removal through legal means Respond through other means Respond directly on the internet There are simple steps that can be taken relatively quickly to trace anonymous internet users through IP address tracing and disclosure orders from the court. This information can often be vital for companies to understand who they are up against and whether taking action will resolve or inflame the problem. Dan Tench, Partner, Olswang In our experience, many companies are unaware of the tools available to them for dealing with damaging material on the internet. PR, search engine optimisation, and legal means all have a role to play in protecting a company s online reputation. Those companies that monitor their online reputation effectively and have a specialist team on hand will be quicker to react and make the right decisions. Delay often leads to further damage. Ashley Hurst, Senior Associate, Olswang

6 Key Contacts Dan Tench Partner +44 (0) Ashley Hurst Senior Associate +44 (0) About Olswang We are a full service law firm with strong practices in corporate, commercial, employment, outsourcing, tax, financial services, regulatory and competition, litigation and intellectual property. We have a team of over 600, including nearly 100 partners, across six European offices. We are partnered with US technology focused law firm Cooley, and have a best friends network of leading independent law firms throughout the world. About The QCA The Quoted Companies Alliance is a not-for-profit trade organisation that works for small and mid-cap quoted companies in the UK and Europe to promote and maintain vibrant, healthy and liquid capital markets. For more details please contact Tim Ward, Chief Executive, on either or mail@theqca.com. About Windfall Media Windfall Media is a social media analytics company. It combines proprietary blog search technology with human expertise to deliver strategic analysis of social media conversations, threats and opportunities. It specialises in crisis management, providing online surveillance and advisory services to a wide variety of listed companies. Berlin +49 (0) Brussels London +44 (0) Madrid Paris Thames Valley +44 (0)