Negative Publicity: How People Process It and How Brands Should Respond to It | Kyle Findlay & Alice Louw
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This deck presents case studies and a review of the cognitive theories behind how people process negative information about a brand, and suggests factors that a brand should consider before responding to a scandal. PLEASE NOTE: 1. See speaker notes for more info on each slide 2. Drop me an e-mail if you would like a copy (e-mail address on front slide). 3. Link to full paper - it's behind a paywall unfortunately :( http://www.esomar.org/web/publication/paper.php?id=2171
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Negative Publicity: How People Process It and How Brands Should Respond to It | Kyle Findlay & Alice Louw
- 1. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 Presented at: SAMRA 2010 & ESOMAR Online 2010 Comments, questions? E-mail: Kyle.Findlay@tnsglobal.com
- 2. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 “On behalf of all of our staff who came in early to make and serve your food… I would like to thank you for messing their day up and more seriously disrupting my afternoon nap. Please do us all a favour and don’t ever book a table at my restaurant again.” “I will try and contain my excitement and await the contribution from “the CEO of XYZ Fund Managers, Mr. JS”. Upon receipt I will pin it up in the bathrooms for customers perusal while they relieve themselves.” “In no way was I aware that any special measures had been taken by the restaurant on behalf of our party of four… One of the dinner guests for last night’s booking, the CEO of XYZ (altered) Fund Managers… will be following up in due course with his own thoughts on the matter.”
- 3. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 Does negative publicity exist? Does negative publicity exist? “The main thing it has done is make a huge amount of people aware of where we are, what we do”
- 4. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 “There’s no such thing as bad publicity [in restaurants], unless you poison them, interfere with their underage son or daughter, or you’re too expensive“
- 5. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 Influencing factors:Influencing factors:
- 6. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010
- 7. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 It’s always interesting for me to find out “how did you hear about us?”. During that period, 6-7 times out of 10 it was through the email correspondence
- 8. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 Reconstructive memory
- 9. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 1.Cognitive biases • Confirmation bias • Risk aversion 2.Cognitive dissonance 3.Cognitive fluency
- 10. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | Commitment across 25 categories 0 20 40 60 80 100 Claimed recall Verified noting Overall reaction (% very good) Likeable ad (top 3 boxes) Interesting ad (top 3 boxes) Believable ad (top 3 boxes) Committed users Uncommitted users Available non-users Unavailable non-users Source: Rice, J & Bennett, R. 1998. “The Relationship between Brand Usage and Advertising Tracking Measurements”, Journal of Advertising Research, May/June
- 11. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | Existing relationship Source: Findlay, K & Louw, A. “Negative Publicity: How do customers process it and how should brands manage it?”. South African Market Research Association 2010 Conference
- 12. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | 1.Situated/embodied cognition 2.Activating schemas
- 13. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 |
- 14. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 |
- 15. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | Ambiguous responseUnambiguous support Unambiguous stone-walling
- 16. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | Sources: Dilbert cartoon: http://www.dilbert.org/strips/comic/2010-07-27/ Tybout, AM & Roehm, M. 2009. “Let the Response Fit the Scandal”. Harvard Business Review,
- 17. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | “He’s never made a public apology… That’s fine. He can stick to his fucking rules of his own thing and stick to his story – fantastic. Good luck. You’re number one in Google for being an asshole and Cape Town will kill you.”
- 18. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | Source: Sass, E. 2010. "Nestle's Bites it On Greenpeace Controversy". MediaPost. URL: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=126171 vs.vs.
- 19. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | Source: Skurnik, I, Yoon, C, Park, DC & Schwarz, N. 2005. "How warnings about false claims become recommendations". Journal of Consumer Research, 1.Refutation 2.Retrieval 3.Storage
- 20. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | 1 2 3 Source: Tybout, AM, Calder, BJ & Sternthal, B. 1981. “Using Information-Processing Theory to Design Marketing Strategies”. Journal of Marketing Research, 28 (February), 73–79. 1.Refutation 2.Retrieval 3.Storage
- 21. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | 27 Nov 2009 Accident 11 Dec 2009 Announcement of Tiger’s “indefinite” leave from Golf 18 Feb 2010 Tiger Apologises
- 22. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | - 10% 0% 10% 20% 30% 40% 50% 60% Question: In the past 3 months has your opinion of (BRAND) become more favorable, less favorable or had no change? (N=1,000 TNS Express Omnibus Respondents – representative of the U.S. 18+ individual population) 11% 3% 3% 2% 5% Less Favorable 50% Source: Friedman, L & Smith, M. 2010. "The New Influence Tracking". Presented at The ARF 56th Annual Convention + Expo
- 23. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 |URL: http://www.youtube.com/watch?v=5NTRvlrP2NU
- 24. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | The Sponsors •Most sponsors fared fairly well •Discussion associating Tiger with sponsors relatively low compared to the total Tiger discussions •Accenture taken the largest hit – not surprising as Tiger had come to embody the Accenture brand Source: Friedman, L & Smith, M. 2010. "The New Influence Tracking". Presented at The ARF 56th Annual Tiger Woods - the Brand • Tiger posted huge loss in sponsorships • But, negative sentiment appears to be dissipating • Tiger is still one of America’s favourite athletes and America’s favourite golfer THE BRANDS
- 25. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | • Watts vs. Gladwell – Influencers vs. forest fire • Self-organised criticality
- 26. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | • Unpredictable, but… • …betweeness centrality • …K-shell decomposition
- 27. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | "The Cape Town factor comes into it... Cape Town loves [snubbing brands that they disapprove of]... They are fickle and they are proud of being fickle… It's a close-ranks thing. It starts to become a trend."
- 28. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 | Firm’s response is vital •Honesty is key •Refuting doesn't work •Ambiguity doesn’t work 41Relationships affect interpretation •Confirmation bias, risk aversion •Make excuses for/defend you Size matters •Small vs. big brands 2 Direct vs. indirect •Influences response strategy 3
- 29. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 |Source: http://www.food24.com/News-and-Guides/Features/Portofino-closes-20100408
- 30. Negative Publicity | Kyle Findlay & Alice Louw | SAMRA 2010 |
Notes de l'éditeur
- This paper/presentation looks at the cognitive processes that affect how people interpret information about brands (especially negative information). In addition to many anecdotal examples, it also looks at two primary research case studies of brands that were confronted with negative publicity - a major new entrant into the Cape Town restaurant scene and the Tiger Woods infidelity scandal.
- We conducted primary research for the purpose of this paper. Cape Town is world-renowned for its “foodie” scene. At the time of writing the paper, the new darling child in the local restaurant scene was embroiled in a scandal, a mere three months after opening. The scandal related to a belligerent email exchange between the owner of the restaurant and a customer that had cancelled his booking on the day of the booking. The owner took exception to this because it was the second re-scheduling of the booking and he had organised his staff to come in an hour earlier to accommodate the party of 4 (although the customer was not aware of this). This slide quotes excerpts from the email conversation that was widely spread via email (which was how the author’s first became aware of the exchange), social media and several of South Africa’s most popular blogs and websites.
- We video interviewed the restaurant owner. Question: “Has the scandal been a good thing or bad thing in the long-term?” Interview highlights: “Time will tell” “The main thing it has done is make a huge amount of people aware of where we are, what we do… [That ] this restaurant has now changed from what it was before [previous restaurant under different ownership]” “Looking at the amount of calls coming through, I think in hindsight it might not have been a good idea for my reputation, but from a business point of view, which is what it is all about I think, I don’t think it has done us any harm”
- Question: “Do you think there is such a thing as negative publicity or is all publicity good publicity?” Interview highlights: “There’s no such thing as bad publicity [in restaurants], unless you poison them, interfere with their underage son or daughter or you’re too expensive – fortunately we are neither [sic] of the above”
- This presentation focuses on four main factors which influence how a person internalizes and remembers/recalls information: The brand’s size and awareness levels prior to the scandal The strength of the relationships and the types of expectations people had with the brand prior to the incident Did the negative information reflect directly onto the brand, or was the brand only indirectly related? How did the firm respond to the scandal?
- Factor 1: Brand size and awareness prior to scandal Research shows that negative publicity generally has a negative effect on a brand in the short- to medium-term In particular, big brands are unlikely to benefit from increased awareness as most of the market already knows of the brand However, as the drawing captures, small brands can sometimes benefit from the increased awareness they receive through the incident – they can be propped up by the mountain of negative publicity to broadcast their message to a greater audience This increase in awareness might outweigh the effect of the negative publicity. For example, Paris Hilton became famous after a tape was leaked showing her having sex with an ex-boyfriend; and, according to Hotels.com, they saw a 300% increase in bookings to Kazakhstan after the release of the film Borat, despite the film’s negative caricature of the country
- Our interview with the restaurant owner supports the idea that small or new brands can benefit from increased awareness. Interview highlights: “It’s always interesting for me to find out “how did you hear about us?”. During that period, 6, 7 times out of 10 it was through the email correspondence. It was a lot.”
- Factor 2: Existing relationships and expectations In order to understand this factor, we need to revisit how our memories work Contrary to popular belief, we do not store every memory in perfect detail in giant mental warehouses, just waiting for retrieval Rather, memories are recalled by combining various mental constructs that might relate to an experience into a holistic ‘memory’. For example, think of your mother: doing so might conjure up images of your mom in the kitchen, her perfume, jewelry, the times she consoled you when you were hurt or unhappy, etc. Our brains weave these components together on demand when we reconstitute/recall a memory. These interconnected memory structures are more technically referred to as ‘schema’ We now need to take the brain’s physiology into account by recognising that neurons and neural clusters (the components that make up a schema) are constantly dying off. In addition, the links between neurons and neural clusters are constantly being rewired Therefore, our brains (and by extension, our memories) are not static! Rather, they are continually being rebuilt, and thus recreated. Every time we reconstitute a memory, we subtly colour it with our current beliefs, experiences and state of mind As a result, memories are shifting phenomena that often change with time!
- Many factors influence how the contents of our memories subtly shift over time with each reconstruction. This presentation focuses on three in particular: Cognitive biases (such as ‘confirmation bias’ and ‘risk aversion’) Cognitive dissonance Cognitive fluency As the drawing depicts, these factors help determine which ideas and stimuli are internalised (the round circles entering the brain), and which are consigned to the scrap heap by being ignored or forgotten (the odd-shaped pieces; unless they are moulded to fit in with our existing beliefs). Just like the toddler game of fitting round pegs into round holes, so too do the ideas that “fit” the best (by confirming our existing beliefs) slide into our brains most easily. COGNITIVE BIASES As the name implies, cognitive biases are phenomena which bias the way we interpret seemingly objective information. Probably one of the most common biases is confirmation bias, which describes our drive to confirm our beliefs. Everyone wants to maintain their worldview and beliefs. We are therefore more likely to look for things that confirm our beliefs and ignore (or make excuses for) things that contradict our beliefs. In a brand context, this means that if I have a strong positive relationship with a brand, I will focus on the positive information I see about the brand, while ignoring (or at least down-weighting) the negative information I receive. Similarly, if I have a strong negative perception or expectations of a brand, I will focus on the negative information I receive and will be more likely to ignore or forget the positive information because it does not sync with my existing beliefs. In the absence of prior relationships or expectations around a brand, another human cognitive bias kicks in, namely ‘risk aversion’. This bias has evolutionary roots, and is best summed up by the saying “a bird in the hand is worth two in the bush”. In other words, ancient hunters did better by hanging on to the food that they already had rather than risking it for uncertain gains, even if those uncertain gains might be greater. In modern terms, this equates to our general tendency towards preferring to hold on to what we know we definitely have rather than risking it on uncertain gains. In a branded context, this means that people will rather hold on to what they have (their money) than risk it on uncertain gains (product experience), especially in the presence of negative information. Research has shown that people assess negative information as more diagnostic of a brand than positive information. This is a clear illustration of risk aversion. COGNITIVE DISSONANCE Cognitive dissonance is the name given to that innate human drive to avoid information that conflicts our beliefs (i.e. information that creates dissonance in our mind). Much research has shown just how strong this drive is. We will often lie to ourselves and each other in order to maintain our own beliefs. It is this drive that makes us look for confirmatory information about a brand and discard contradictory information. It is also due to this phenomenon that two people can look at the same news article and come out with totally different interpretations, or why people from two different political parties or religions can assess a situation and come out with diametrically opposed interpretations that they feel 100% justified in maintaining. COGNITIVE FLUENCY Building on the above, cognitive fluency describes the above two concepts in even more general terms. At both a conceptual and biological level, our brains find it easier to process information that is familiar and understandable. Like a river taking the path of least resistance, so too do our brains take the most energy efficient route when processing information. This means that we will often take the easy, familiar explanation over the counter-intuitive and contradictory explanation without even thinking about it, even if the counter-intuitive interpretation is the correct one! Again, this explains why people will see what they want to see when it comes to brands and either ignore or make excuses for what they don’t want to believe.
- The concepts of confirmation bias, cognitive dissonance avoidance and cognitive fluency are clearly illustrated in this chart. The chart shows the level of claimed recall, positive reaction, level of interest and believability aggregated across 25 different countries and categories. In all cases, those people that are committed to a brand are more likely than uncommitted users to: Recall advertising for the brand Have a positive reaction towards the ad Like the ad Find the ad interesting Find the ad believable
- In our own research, we collated all the blog comments relating to the restaurant scandal. We then categorised the responses into three groups wherein the person posting the comment had… …a previous negative experience at the restaurant …a previous positive experience at the restaurant …no previous experience of the restaurant Based on these three groups, we found that: 100% of the people who had a negative previous experience perceived the scandal in a negative light 95% of the people who had a positive previous experience justified the scandal in a positive light or made excuses for the restaurant 67% of people who had had no previous experience of the restaurant perceived the scandal in a negative light, an illustration of risk aversive behaviour These results confirm the literature on how our brains process information. However, the strength of these effects is quite surprising!
- Factor 3: Direct exposure versus indirect association Two further concepts help us understand the potential impact a scandal can have on a brand depending on whether the brand is directly associated with the scandal or only indirectly associated. They are: SITUATED/EMBODIED COGNITION This term refers to the way in which humans think. Essentially, the thoughts that we have and the actions that we take are contingent on our environment and the stimuli we are exposed to in that environment. For example, if I enter a kitchen and smell freshly baked bread, I might think of my mother in the kitchen when I was a child. Thus, the aroma of fresh bread activates a neural cluster in my brain, which in turn activates the “mom” schema. In this way, the thoughts we have and the memories we recall are contingent on the stimuli we experience in our environment, hence our cognition (recalling “mom” schema) depends on our situation (exposure to fresh bread smell in kitchen) i.e. “situated cognition”. ACTIVATING SCHEMA As mentioned above, specific stimuli have the ability to activate specific schemas in our brains. From a brand point of view, the question then becomes, how likely is my brand to be activated/recalled/associated/etc. with a scandal? Unsurprisingly, research shows that this likelihood increases when the brand is directly related to the scandal rather than indirectly related…
- To visually (and anecdotally) demonstrate the relative difference in activation between direct and indirect association, we created a word cloud out of all the comments from the blog posts relating to the restaurant scandal. The size of an individual word in the word cloud is proportional to the number of times that the word was mentioned in the comments. In other words, the more the word was mentioned, the bigger it will be displayed. [See next slide for more information]
- We find that the owner of the restaurant (“Cormac”) is mentioned three times (3.08 to be exact*) as often as the restaurant itself (“Portofino”). This makes sense when we consider that the scandal involved the owner directly and the restaurant only indirectly. Put another way, the restaurant (indirect) received only a third as many comments as the owner (direct). As we shall see later in this deck, the impact of indirect association with a scandal can be even less in some circumstances… *I came to the relative difference in mentions by calculating the difference in size between the two words in terms of their area
- Factor 4: Firm’s response This is perhaps the most important factor dictating the impact a scandal has in the long-term. While brands generally experience a negative impact in the short-term (people have very short memories), the manner in which it responds will likely determine the impact in the long-term. The types of responses sit on a continuum: UNAMBIGUOUS RESPONSE… …which sees the brand take full responsibility for problems, including apologising to affected parties, unconditional recalls of faulty products, reparation for damages caused (such as replacements) and clear communication about the facts and the brand’s role in the process. Examples are the recent recall of Toyota Priuses over brake issues (2009-2010) and Pick ‘n Pay’s response to the poisoning of random pilchard cans [IOL, 2003]. Pick ‘n Pay actually emerged as one of the most trusted brands in South Africa due to their response [AskAfrika, 2004] AMBIGUOUS RESPONSE According to Dawar and Pillutla, most responses fall somewhere in between these two extremes. They give the example of a crisis faced by Perrier bottled water, which was accused of being contaminated with benzene. As the crisis unfolded, Perrier’s New York and Paris offices released inconsistent statements about the contamination and the remedial steps being taken, which led customers to believe the brand was ambivalent and confused [Kurzbard & Siomoks, 1992]. UNAMBIGUOUS STONE-WALLING… …in which case the brand institutes a media blackout, denies responsibility and does not embark on any corrective action. This might be a valid strategy when it really is not the brand’s fault and engaging in the issue is likely to fuel the controversy. An example of this approach is the scientific community’s refusal to engage religious extremists in debates around issues such as the age of the earth, and in the process giving credence to their naïve arguments. Similarly, this might be a valid strategy when the brand has a particularly strong and vocal user base that will defend the brand on the brand’s behalf. Based on these strategies for brand response, Dawar and Pillutla [2000] found the following phenomena: When people have weak existing expectations or relationships with a brand that experiences negative publicity, ambiguous (often the result of a poorly planned and co-ordinated response) and stonewalling responses can have severely negative impacts on brand equity as people attend to the evidence at hand. However, unambiguous responses led to no such decline. In situations where people have strong existing positive expectations and relationships, an unambiguous response can actually have the synergistic effect of pushing brand equity up to a higher level than before the negative publicity hit. Research house DDB Needham conducted a study amongst 2,465 respondents which found that a company’s handling of a crisis was ranked as 3rd most important purchase influence [Marketing News, 1995]. This finding echoes conventional marketing wisdom which knows that every product or brand problem is an opportunity to build a stronger relationship. An ambiguous response has the most pronounced impact on confirmation bias. Ambiguous and contradictory statements leave the door open for people to interpret them based on their own existing beliefs and biases, thus ambiguous responses are unlikely to win over critics. Unambiguous responses make it more difficult for critics to discount the evidence in favour of the brand. However, as we have discussed, cognitive dissonance avoidance means that critics will tend to discount the facts in favour of maintaining their own world model. Dawar and Pullutla sum it up like this: “…existing customers need reassurance about the firm’s responsiveness, whereas potential future consumers of the crisis brand need to be reassured about the absence of risk in consuming the product…” And… “Consumers’ existing positive expectations may provide firms with a form of insurance against the potentially devastating impact of crises [i.e. negative publicity]. For these firms, brand equity appears to be remarkably resilient to different types of firm response and less fragile than initially expected. Conversely, firms with weak consumer expectations may have to undertake aggressive support for their brands simply to preserve brand equity. Indeed, any ambivalence in their response is likely to be devastating.”
- Considering that it is generally recommended that a brand adopt an unambiguous approach, Tybout and Roehm [2009] suggest a simple four step process to dealing with negative publicity: Assess the incident Acknowledge the problem Formulate a strategic response Implement response tactics
- Taking what we have just discussed into account, how did the restaurant owner respond to his own scandal? To get another take on the incident, we interviewed Seth Rotherham, editor of the blog 2OceansVibe (www.2oceansvibe.com), the most popular blog in South Africa. Seth is a consummate PR man who knows how to spin a story. He was instrumental in breaking the restaurant scandal and had the following to say about the manner in which the scandal was handled by the owner (which syncs with what we have just discussed on the last two slides): Seth interview highlights: “He’s never made a public apology” “Since then, I’ve been phoned by no less than three different PR companies… who’ve come to me… saying he’s come to them asking if they can do his PR from now on. They’ve all refused because of the fact he hasn’t said an apology or because they don’t like his vibe… they are turning down money because of what he did (a), and b) because he’s never mentioned ‘sorry’” “That’s fine. He can stick to his fucking rules of his own thing and stick to his story – fantastic. Good luck. You’re number one in Google for being an asshole and Cape Town will kill you.”
- Another example of how NOT to handle a negative publicity incident in the digital age: Nestle's Bites It On Greenpeace Controversy http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=126171 by Erik Sass, Wednesday, April 14, 2010, 5:15 PM Let this be a lesson for every big company that uses social media: it's better not to behave like a petulant 14-year-old when things don't go your way. That said, I can sympathize with Nestle's hissy fit. Like any company with a marketing organization worthy of the name, Nestle's has a social media presence including, of course, a Facebook page. Meanwhile, like any global corporation, Nestle's also does things that attract criticism from environmental activists. Taken together, these two facts virtually guarantee a collision resulting in negative publicity somewhere down the line. That's what happened when Greenpeace took Nestle to task for allegedly contributing to the plight of Indonesian orangutans -- an endangered species whose rain forest habitat is threatened by the encroachment of farmland used to produce palm oil for Nestle's, among other buyers. Greenpeace has a Web site devoted to this cause, hosting a mini-documentary and a fairly gross video ad in which an office worker opens a Kit Kat only to find an orangutan finger (Greenpeace is not known for subtlety). Naturally, Greenpeace also posted the ad on YouTube. Nestle's first -- and possibly worst -- social media mistake was going after the YouTube ad. The same day that the video was posted -- March 17 -- the company forced YouTube to remove the ad, for reasons that still aren't clear (as mentioned it's kind of gross, but nowhere near as gross as some other stuff on the video-sharing site). Regardless of the reason, the attempt to censor the video was not a smart move, as it generated way more negative publicity than if they'd just left it alone, while the video was still available at other locations like Vimeo and the Greenpeace site itself. This bullying in turn precipitated a flood of negative comments targeting Nestle's on Twitter and Facebook, including the company's own Facebook page. Some of the critics were "strangers," but some of them were people who were actually Nestle's Facebook "fans" -- whom the company had presumably worked hard to recruit and lovingly cultivated with so much social media savvy. When its Facebook fans became critical of the brand, however, Nestle turned into an angry adolescent, exchanging insults with critics and "de-friending" them, as if this would somehow stem the tide of negative PR. This ludicrous, petty behavior was the worst possible response, failing to insulate the company from criticism while stoking the negative PR storm: I mean, social networks thrive on this kind of stuff (OMG, drama! Tell everyone!). Eventually cooler heads prevailed and Nestle's reversed itself, issuing an apology and agreeing to stop using the offending palm oil, but it was too late: its behavior on Facebook was touted as uncool, and Nestle's will be lucky if those de-friended peeps, like, ever talk to it again? But it's an interesting case study in how a social media presence -- which many big companies treat as a humdrum necessity, almost an afterthought -- can suddenly take center stage (and not in a good way).
- From the last few slides, it seems clear that anything less than an unambiguous response is likely to be detrimental to a brand. However, how does a brand go about winning over even its critics, who we know are less likely to remember and believe the facts? Alice Tybout and co. have done research into ways in which one can tailor one’s communications so that they influence the associations that are made in people’s minds. In the 1980s, McDonald’s was battling a vicious rumour which said that McDonald’s burger patties were made of red worm meat. Tybout and co. [1981] used this situation to conduct research which showed that the traditional and intuitive strategy of directly refuting a rumour is ineffective. As already discussed, people hear and remember the information that syncs up with their own beliefs and perceptions. If an individual is upset or angry with a brand for some reason, repeating the charges against the brand, even if to refute them, only serves to justify existing negative perceptions. Reconstructive memory will ensure that a few days or weeks down the line (if not sooner); said refutations will have morphed into statements of complicity within the minds of brand critics [Paulos, 2007; Schwarz, et. al., 2007; Nyhan & Reifler, 2009]. Tybout and co. [1981] conducted research into what they referred to as the “refutation strategy”. What they found was that repeating the charges against you and refuting them had no positive effect on people’s perceptions of a brand. Subjects still felt the same about the brand as if they had only heard the negative publicity (in this case a rumour) by itself. Adding further credence to the ineffectiveness of refutation strategies, Skurnik, Yoon & Schwarz [2007] provide evidence that trying to counter-act myths with facts does not work. As we have seen, people will believe what they want to believe and repeating the charges against your brand will only reinforce their beliefs. To prove this point, researchers asked respondents to read a flyer released by the American Centers for Disease Control which repeated the myths around the flu vaccine followed by the facts (see the flyer on this slide). While most respondents were able to accurately recall the myths and facts immediately after reading them, when they were tested again only 30 minutes later, they misclassified 15% of the myths as facts but only 2% of the facts as myths! Returning to the McDonald’s example, realising that a refutation strategy is ineffective, Tybout and co. looked at alternative strategies for dealing with negative information about a brand. They suggest two approaches to responding to negative publicity derived Information Processing Theory, described as a “retrieval strategy” and a “storage strategy”: “[A storage strategy] requires introducing a second object at the time rumor information is stored. The presence of the second object is intended to foster the association of the rumor attribute with that object rather than with the object (McDonald's) initially specified in the rumor. Moreover, if the second object is positively evaluated by rumor recipients, some of this affect is likely to become associated with the rumor attribute (worms), making it less negative. Hence, even if the rumor attribute is still associated with the initial object (McDonald's), it will not have as adverse an effect on that object's evaluation as would be the case in the absence of the storage strategy. [A retrieval strategy] requires affecting information retrieval. The strategy is based on the notion that judicious choice of a stimulus will direct retrieval of thoughts in memory away from rumor-stimulated associations. Even if the new stimulus does not completely inhibit the retrieval of object-rumor attribute associations, it is likely to dilute these associations with other thoughts in active memory." The researchers tested the strategies by variably exposing cells of subjects to the McDonald’s rumour (a plant in the group recounted the rumour). Those exposed to the rumour were then treated with one of the three strategies – refutation, storage or retrieval.
- These charts summarise the results of Tybout and co’s experiments with various strategies. As you can see, a Refutation strategy made no difference to people’s evaluation of the brand in comparison to a group that had only heard the rumour. However, both Retrieval and Storage strategies lead to almost twice as many positive evaluations of the brand.
- The recent Tiger Woods infidelity scandal is a perfect example of the various concepts we have been discussing this far. Timeline of the event is shown on this slide. Note that Tiger (and all the sponsors) initially “went dark” after the incident (stone-walling) before finally apologising several months later.
- Respondents were asked: “In the past 3 months has your opinion of (BRAND) become more favorable, less favorable or had no change?” Most sponsors did not see a major decrease in favourability, with the exception of Accenture, which is most directly related to Woods. By comparison, Toyota saw a 50% decrease in favourability relating to the brake issues with some of its models, which occurred around the same time. This confirms what we have already discussed about direct versus indirect association when it comes to negative publicity.
- Eventually, Tiger showed contrition for his actions (as close to an apology as we are likely to get?) when Nike flighted this ad featuring a recording of Woods’ father, Earl, from before his death overlaid on an image of Tiger looking unhappy (and sorry?). Advert description: Camera slowly zooms in on Tiger Woods’ face, which has a stoic, remorseful expression. Overlaid, we hear the voice of Tiger Woods’ father, Earl Woods, saying: “Tiger, I am more prone to be inquisitive… to promote discussion… I want to find out what your thinking was... I want to find out what your feelings are... and, did you learn anything? Followed by a black screen with just the Nike swoosh symbol on it.
- What was the outcome several months later? The Sponsors Most sponsors fared fairly well as they were only indirectly related to the incident Discussion associating Tiger with sponsors relatively low compared to the total Tiger discussions Accenture taken the largest hit – not surprising as Tiger had come to embody the Accenture brand Tiger Woods - The Brand Tiger posted huge loss in sponsorships But, negative sentiment appears to be dissipating due to the enormously strong existing relationships that people have with Tiger and his ‘brand’ as confirmation bias and reconstructive memory sets in, ensuring that… …Tiger is still one of America’s favourite athletes and America’s favourite golfer! [see Appendix for charts detailing this]
- How ideas spread in the digital age Managing negative publicity and word-of-mouth is of vital importance in the digital age. Customers are better connected than ever before in the history of humanity, which means that the ease with which they can spread information and be influenced by their peer group and social network has no precedent. It is vital for brands (and anyone with a public voice) to understand how what they say and what is being said about them can propagate in the digital world… Who spreads negative publicity (and all other information)? One of the most popular theories for how information (such as negative publicity) spreads in social networks is that espoused by New Yorker journalist and author, Malcolm Gladwell. Gladwell popularised the idea of the ‘maven’ – a particularly connected and influential person capable of spreading vast amounts of information and kick-starting trends due to the credibility they enjoy within their social group. According to the model made popular by Gladwell, mavens act as vectors of influence and information spreading. Therefore, if you want to get your message out or nip a pernicious rumour in the bud, the most highly connected individuals in a network should be your first port of call [Gladwell, 2000]. Contradicting this mode of thought, father of modern network theory, Duncan Watts, points out that everyone is as likely to start a trend [Watts, Salganik & Dodds, 2006; Watts, Peretti & Frumin, 2007; Watts & Dodds, 2007; Watts, 2007; Watts, 2007; Thompson, 2008]. Research by Watts and others points out that highly connected individuals are no more likely to start a trend than anyone else. While their research does point to connected individuals’ ability to influence a marginally greater number of people in one go, they are no better at getting an idea or trend to take on a life of its own by being passed from person to person on a massive scale. Highly connected individuals create larger ripples in the social pond, but these ripples are no more likely to cause a tsunami than anyone else’s. Like any other complex system, no-one can predict which ideas will cause an information cascade by being passed from person to person like a collapsing trail of dominoes. The spread of ideas and information (such as negative publicity) is inherently unpredictable. Watts uses the analogy of the forest fire (as depicted in the drawing on this slide). If the forest is dry, any spark will start a forest fire and no-one then post-fact gives the spark undue importance for starting the blaze since it would likely have started anyway – its first cause was inconsequential. Similarly, while we like to attribute amazing skill and genius to individuals that start a trend, it is unlikely that the trend would have started if their social network was not ready, or primed, to “burn”. In systems theory, the concept of a dry forest waiting to burn is referred to as “self-organised criticality”. The most well-known and studied example of self-organised criticality is an everyday pile of sand. If one were to pour more sand onto an existing pile, this would cause many tiny avalanches, until the pile comes to rest at a stable point. However, although seemingly ‘stable’, throwing just a few more grains of sand onto the pile will likely cause more avalanches. This is because complex systems organise themselves right on the edge of chaos, right on the precipice of the cliff, where something as small as a single additional grain has the ability to push the system over the edge. It is this behaviour that Watts’ forest fire analogy captures. Social networks, like any other complex system self-organise to the point of criticality i.e. right at the edge of the cliff. On the edge of a cliff, anyone can nudge the system and cause an avalanche [Bak & Paczuski, 1995; Clar, Drossel & Schwabl, 1996; Clar, Schenk & Schwabl, 1997; Malarz, Kaczanowska, & Kulakowski, 2002]. Our faulty understanding of causality then causes us to give undue importance to the nudger, whoever they may be. Despite being inherently unpredictable, humanity requires the perception of control over its environment (as discussed in the section on cognitive dissonance and uncertainty). Thus, much time and effort has been poured into understanding how best to influence a system such as a social network. If highly connected individuals (or nodes) are not sufficient to start a trend, then what is? Recent research [Carmi, et. al., 2007; Kitsak, et. al., 2010] shows that two criteria are necessary for a node to exert real influence on a network (although this still does not guarantee that a trend will kick-off): A node’s “degree” refers to the number of connections that the node has to other nodes in the network, and this is who Gladwell refers to as “mavens”. However, this is not enough since highly connected nodes can be situated on the outskirts of a network, isolating them from the main bulk of activity, therefore, we also need… Position within the network relative to the information being spread. Some nodes might have few connections but act as a gateway between distinct clusters within the network Maksim Kitsak and co. use a technique called “k-shell decomposition” to decompose a network into three constituent parts: the core, peer-connected nodes and periphery. 80% of traffic (i.e. information) comes through the core, which makes up the inner shell. Surrounding this shell is an intermediate layer of nodes that are connected to each other so that, if the core were to be removed, they could still communicate (peer-connected), and finally, enveloping this shell is the outer periphery layer, full of isolated nodes that are likely to be cut off if you remove the core. Identifying real influencers requires knowing their position within a k-shell decomposed network relative to the information being spread (see Appendix 2 for visual examples of a network and its k-shell decomposition) . As Kitsak puts it, “…a less connected person who is strategically placed in the core of the network will have a significant effect that leads to dissemination through a large fraction of the population.” [Kitsak, et. al., 2010] Understanding influence is about understanding a person’s position and importance within the network as a gatekeeper and potential vector of influence relative to where the information enters the network. Knowing who to target helps one understand how to propagate favourable information and nip unfavourable information in the bud by educating these vectors about the true information (bearing in mind that most people are not stupid and can quickly pick up on disingenuous and misleading statements, so these need to be avoided at all costs unless a brand wants to precipitate an even greater backlash – only the truth will do).
- Which ideas get spread? As we have already discussed, it is nigh impossible to predict the exact idea that will “go viral” – a firm’s worst nightmare if the idea happens to be a piece of negative publicity about their brand. We know that in order for word to spread, the network has to be ready to receive the message, whether it knows it or not (recall Watts’ forest fire analogy and the self-organised system right on the precipice of criticality). Because we cannot make exact predictions, we hedge our bets by targeting the nodes that will give us the best chance of success and we use k-shell decomposition to identify these nodes. The question still remains though, what type of message is most likely to be spread? Research by Jen-Hung Huang and Yi-Fen Chen [2006] confirms a few things about how customers process information online: Online recommendations from other people are perceived as significantly more trustworthy than expert recommendations, therefore… Online recommendations from other people influence customer choices significantly more than expert recommendations Unsurprisingly, word-of-mouth is the most trustworthy source of information online. Researchers at the Max Planck Institute for Evolutionary Biology, Ralf Sommerfeld and co. go even further than this to show how gossip is more powerful than the truth. Even when presented with the facts from an expert source, people are more likely to believe their peers (unsurprisingly, cognitive biases and cognitive dissonance come into play here) [Sommerfeld, et. al., 2007; Davydov, 2007]. So what we have is a scenario where people are highly interconnected and they are more likely to listen to each other than an ‘expert’ source (or that of a major corporate brand, for example). How then does a brand counteract negative sentiment? We have already discussed the type of person that needs to be educated as to the true facts, but we have also discussed people’s irrationality when it comes to processing information – there is no guarantee that they will internalise your message or remember it the way you intend them to. So, how do you communicate ideas that stick and which people are likely to spread as antidote to the negative publicity? Seth Godin provides some tips for spreading ideas (see Appendix 3 for a more detailed list): “For an idea to spread, it needs to be sent and received. No one "sends" an idea unless: a. they understand it b. they want it to spread c. they believe that spreading it will enhance their power (reputation, income, friendships) or their peace of mind d. the effort necessary to send the idea is less than the benefits No one "gets" an idea unless: a. the first impression demands further investigation b. they already understand the foundation ideas necessary to get the new idea c. they trust or respect the sender enough to invest the time … Notice that ideas never spread because they are important to the originator. Notice too that a key dynamic in the spread of the idea is the capsule that contains it. If it's easy to swallow, tempting and complete, it's a lot more likely to get a good start.” [Godin, 2005] Bringing this back to what we have discussed thus far, ideas that sync with people’s existing level of understanding and belief spread more easily (thanks to cognitive fluency). Unfortunately, this leaves the door open to fear, a major reason why negative publicity gets circulated in the first place. Two recent examples of false ideas that have taken on a life of their own come from the scientific literature. The first could be used as an example of how fear makes some ideas more attractive and likely to spread, while the second example is a potent mix of fear and political agenda… [Harmon, 2010] Major debates currently rage around the link between childhood flu vaccines and autism. A paper was published which described a potential indirect link between the vaccine and autism. Even though the paper was subsequently publicly retracted (with several of the co-authors distancing themselves from the controversial interpretation), and despite a large body of contrary evidence, a survey still found that about a quarter of parents thought the vaccines could cause autism and 12% had refused to have their children vaccinated [Harmon, 2010]. Similarly, in the never-ending war on drugs, anti-drug proponents raised their hands in glee and were all too happy to accept the results of a government-funded study which purported to show a link between MDMA (ecstasy) use and brain damage. When it was revealed that the lab’s suppliers had erroneously mislabelled methamphetamines (a.k.a. speed or tik – a far more dangerous drug) as MDMA, and no such link existed, the paper was retracted. Despite this retraction, however, many still believe that MDMA causes brain damage. As lead Liz Wager, chairperson of the Committee on Publication Ethics (COPE) in the UK says, "People latched onto it," and it "fit into their political agendas" [Harmon, 2010]. So why do people spread ideas and how do brands get them to spread positive information that can counteract negative sentiment? People spread ideas that: They can understand and which they can process within their existing beliefs They can gain some form of personal reward from such as increased peace of mind, culturally valuable knowledge (such as what Brad Pitt and Angelina Jolie did most recently) or greater understanding They gain some form of social reward for spreading it such as a perceived increase in reputation (credibility, expertise, etc.) The gains of spreading are greater than the cost of spreading, which speaks to the need to make an idea as easy to pass on as possible by neatly packaging it for smooth transfer
- Seth gave his thoughts on how he thought Cape Town would respond to the incident… Interview highlights: "The Cape Town factor comes into it" "Cape Town loves that [snubbing brands that do things they disapprove of]... they are fickle and they are proud of being fickle" "It's a close-ranks thing. It starts to become a trend."
- A few key points come out of this case study for brands faced with negative publicity: Strong customer relationships are the key to withstanding negative publicity Brands with positive customer relationships will be more resistant to negative publicity, whereas brands with poor customer relationships are likely to suffer due to cognitive biases and fluency issues which influence how people interpret the negative information. Negative publicity is a double-edged sword for new brands entering the market The tendency of individuals without prior brand relationships to adopt a risk aversive strategy and upweight negative information suggests that new brands will be more vulnerable to negative publicity - although the positive impact of increased awareness could outweigh this concern. In such situations, any publicity really may be good publicity (based on an interview with the owner of the restaurant, he believes that his establishment benefited from the exposure in the long run). The speed at which publicity travels online can be both a pro and a con for businesses While negative publicity has the potential to spread very rapidly in an online environment due to network effects, it also likely to dissipate quickly due to the constant turnover of online information. The period of time during which a brand must withstand negative publicity, is likely to actually be quite short-lived*. This is confirmed by research by Berger and Le Mens which shows that the rise in popularity of an idea is roughly proportional to its decline. In other words, what goes up, must come down [Berger & Le Mens, 2009]. The case study clearly confirmed some of the insights discussed earlier in this paper. For one, people are quite predictable in their drive to maintain their existing beliefs and world views. This is exemplified by the fact that most people who had previously had a negative experience with the restaurant made negative comments, while the overwhelming majority of the people who had previously had positive experiences had only positive comments to make in defense of the restaurant. In addition, those who had no previous experience of the restaurant were more likely to take the negative publicity to heart. These insights highlight the often counter-intuitive nature of dealing with negative publicity in the context of the human mind. Hopefully this paper goes some way to illustrating the processes at work, and in the process, helps brands to make more informed decisions. *The only caveat to this insight is for circumstances where services such as Google index negative publicity articles so that they persist at the top of search results for extended periods of time.
- PROLOGUE In April 2010, it was announced that the owner of the restaurant had decided to close it down, citing the unpredictability and long hours as his reasons. Below is the actual announcement from: http://www.food24.com/News-and-Guides/Features/Portofino-closes-20100408 “Portofino closes by: Cormac Keane Controversial Cape Town restaurateur, Cormac Keane, first to wave the white flag as season ends. I have decided to close Portofino. Why? There are too many variables in the restaurant business, too many things out of the restaurateur’s control. Will the staff turn up? Will the suppliers turn up and will it be with the correct order? Will people come and eat at the restaurant and will it be profitable? Far too many wills for my liking. Most people will not see many similarities between the restaurant business and the movie business. I do, I worked in a London casting agency a couple of years ago, it was bottom of the ladder stuff but it gave me a good insight into the industry. I was astounded at the amount of projects that never got off the ground. We would spend weeks sometimes months casting a movie; people would put their blood, sweat and tears, their lives into trying to get a script commissioned and then a movie made. 9.9 times out of 10 it would come to nothing. I left that business, vowing never to do something where effort was not fairly rewarded. Fast forward a couple of years and I have learnt that the restaurant business is exactly the same. Lots of work (which I don’t mind) and little or no reward. I do not regret my restaurant adventure; it has been an interesting experience. I have learned a few lessons and made a few friends and unlike most other restaurants that close every supplier and staff member gets paid and I have found new jobs for most of the staff. Once I decided that I was going to close it was like a cloud lifting, I didn’t realise how much it had taken over my life. Pretty much every day for 7 months, morning, noon and night. It becomes all consuming and is not a lifestyle that you can or should sustain if you want to keep your hair. I think restaurants in general are going through a tough time in Cape Town at the moment, there are a few well established ones who always do well but at the moment there are a lot more struggling with high rents and running costs. I don’t think the World Cup will be the saviour so many are holding out for. People are eating out less and are spending less and the hospitality business has to find new ways to evolve and survive in such a climate. What now? I’m going to drive around Africa. I am ashamed to admit that I have never really left Cape Town and the only wildlife that I have seen is my neighbour’s dog and the resident rat in the roof of my house. That, and the stack of books that are beside my bed, will keep my mind off the restaurant business for long enough to forget.”