Monday, April 12, 2010

Reputation Management in the Digital Age

Much of "litigation public relations" involves managing the client's reputation during a lawsuit or legal crisis. While the rise of YouTube, Facebook, MySpace, Twitter, LinkedIn, and others - the "Social Media" websites - have made reputation management more difficult, they have also opened new avenues for engaging the public. Earlier this year, Douglas J. Wood, a partner with the law firm Reed Smith, published an article discussing ways in which legal counsel can address and deal with the legal risks social media presents for corporate clients. In the following excerpt of his article, Wood discussed how United Airlines became the target of a YouTube video aimed at the company’s reputation:

United Airlines broke a passenger's guitar. They handled his complaint through traditional procedures, eventually refusing to pay for repairs. The musician launched a scathing, but admittedly entertaining, video on YouTube making United look incompetent. To date, there have been nearly six million views of the video.

United responded through traditional means, issuing a press release that said, "We will fully investigate what regretfully happened."

But United didn't satisfy the disgruntled musician.

So along came another video attack on YouTube with more than a half-million views. And a third video is promised.

Worse, in a recent flight, United managed to lose the same musician's bags, an event that was reported to millions in the blogosphere. The story was a lead item on CNN's Situation Room, reported by anchor Wolf Blitzer. According to the London press, United's stock value fell ten percent—$180 million—because of this flub.

While one can certainly question whether the London press reports are accurate, the fact remains that the video had a serious impact on United's equity. And to add insult to injury, Sen. Barbara Boxer, D-Calif., is championing the Airline Passenger Bill of Rights Act of 2009, citing the United debacle.

Last year Domino’s Pizza was blindsided by the posting of YouTube videos showing two employees doing disgusting things to food that was being prepared for delivery. Business Insider labeled Domino’s slow response to the crisis as one of the fifteen biggest PR disasters of the decade:

Domino's waited two days to respond, and in the meantime nearly one million people viewed the videos on YouTube. Simultaneously, the blogs and Twitter were ablaze with discussion of the incident. The pizza company soon fired the two employees and issued an apology (via YouTube video,) but the damage was already done.

In an article about the incident in the New York Times, a Domino spokesman acknowledged that the company’s response was sluggish:

As the company learned about the video on Tuesday, Mr. McIntyre said, executives decided not to respond aggressively, hoping the controversy would quiet down. “What we missed was the perpetual mushroom effect of viral sensations,” he said. . . . “We realized that when many of the comments and questions in Twitter were, ‘What is Domino’s doing about it’ ” Mr. McIntyre said. “Well, we were doing and saying things, but they weren’t being covered in Twitter.” . . . “It elevated to a point where just responding isn’t good enough,” Mr. McIntyre said.

One lesson from the United and Domino’s incidents is that reputation management often requires an immediate response, and a recognition that the public needs to be engaged not only in traditional media, but also in the medium that is creating the “buzz.”

Thankfully, in most instances, public relations support for a legal matter does not descend into a full-blown immediate crisis. In most instances there is time to involve all the key players - such as public relations, investor relations, government relations, outside and in-house lawyers, and digital and multimedia communications professionals - in the communications plan. There is usually time to brainstorm about the likely course a legal matter will take, and to prepare key talking points and media releases to targeted audiences for each scenario. This advance planning will not only aid in managing reputation over the course of the legal matter, but will also provide a framework if an immediate crisis erupts.

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