In 1928, the controversial public relations pioneer Edward Bernays wrote: “The conscious and intelligent manipulation of the organised habits and opinions of the masses is an important element in democratic society.”

Bernays would be horrified to find that today “the masses” can disseminate their own opinions to tens of thousands of viewers via blogs and videos on websites such as YouTube and MySpace.

For companies worried about how consumers and activists view their business practices, these new media channels present a fresh challenge, undermining a traditional command-and-control approach to corporate communication and reputation management.

“It’s frightening for companies to think that their brand reputation is in the hands of third parties but, by definition, it is,” says Rob Key, chief executive of Converseon, a New York-based digital communications company. “The heads of corporate communications in many ways are still dealing with traditional media relations and haven’t embraced this broader social media environment.”

The internet has long been a powerful medium for anti-corporate messages. Moreover, material posted on these websites often remains accessible via search engines long after it is first published. A Google search for “Nike”, now considered a leader in managing labour conditions in its factories, still brings up a “Boycott Nike” website.

What has changed in the past few years, however, is the technology. Until recently, someone wanting to express an opinion on the web needed to have some technical know-how. Videos were hard to post online.

Today, simple publishing tools have given anyone the power to broadcast their views on the web. “With the advent of YouTube and blogs, the publishing mechanisms are in place,” says Mr Key. “So now it’s power to the people, not just power to the techies.”

A video on YouTube entitled “Sweatshops” highlights the potential of new media. Among those interviewed is Jackie Huber, author of the book Creating Customer Evangelists. “Imagine a pirated video from inside a sweatshop appearing online somewhere and then somebody really using that to help this cause,” Ms Huber tells the interviewer.

Lessons in the dangers and the potential of the new media can be gleaned from politics. Like the anti-
corporate activists, political detractors are finding ways to manipulate search engines. Type the word “failure” into Google and it brings up President George W. Bush’s biography on the White House website. At the same time, US political candidates are setting up pages on MySpace and posting online videos to appeal to younger voters.

Activists in other spheres are following suit. Greenpeace now posts videos on YouTube and has a MySpace page. On the US version, it currently has more than 27,000 “friends”.

“It does put us on a more level playing field,” says Tracy Frauzel, who manages online communications for Greenpeace UK. “The internet is becoming a conversation among a large group of people rather than just the companies with the biggest budgets.”

A growing amount of user-generated content relates to issues such as human rights, ethics and the environment. A report published this month by Edelman, the public relations firm, found that in 2006, more than 3.5m posts appeared on these subjects – more than one every 10 seconds. More than 75 per cent of these were on environmental issues.

“Companies right now complain about lack of accountability of NGOs – well, these guys are paragons of accountability compared to a blogger,” says Chris Deri, head of Edelman’s corporate responsibility practice. “A blogger has zero accountability, he has no advertisers, infrastructure or cost model to worry about and nobody’s going to sue him.”

So far, blogs relating to social or environmental issues represent a fraction of all blogging activity – less than 1 per cent, according to the Edelman report. However, Mr Deri believes this could soon change. “The exposé by some 19-year-old blogger of a factory in Thailand is only months off,” says Mr Deri. “And the question is, are [companies] going to respond?”

Alan Marks, Nike’s head of media relations, believes the new forms of communication will be powerful both as a means of marketing products and engaging those concerned with corporate responsibility.

“We’re learning from what we’re doing as a brand the power of digital to create strong connections with your audience,” he says. “And we’re looking at the same thing for our corporate responsibility audiences – how to use digital more effectively to have real-time conversations.”

McDonald’s has already started having such conversations. In January, the company launched Open for Discussion, a blog on which Bob Langert, the company’s head of corporate responsibility, posts entries. The site carries highly critical postings from individuals – most notably on the recent US Happy Meal promotion offering miniature Hummer vehicles as toys.

“You have to have a thick skin because you’re entering a dialogue where you have people that will have all sorts of opinions,” says Mr Langert.

This thick skin is something companies will need as they enter a world in which detractors can easily make their presence felt. “Companies have recognised that it’s going to be easier to motivate people that feel strongly and are passionate than to motivate people that are passively engaged,” says Marian Salzman, director of strategic content at WPP’s JWT advertising agency. “It’s really a very tough time to be stewarding a brand into these arenas.”

Moreover, initiatives can backfire. A blog in which a couple travelled across the US, parking overnight in Wal-Mart stores, was criticised after it emerged that one of the bloggers was employed by the Washington Post. Expenses for the writing and the trip were funded by Working Families for Wal-Mart, a group that highlights the chain’s positive contributions to its workers. Edelman, which designed the initiative, apologised (through the PR firm’s own blog) for failing to disclose completely the bloggers’ identity.

The incident highlights the new level of transparency demanded by online users, who are quick to uncover “flogging” (fake blogging) and to deride companies for any differences that emerge between their rhetoric and their actions.

“Companies that try to maintain postures that are different from their corporate behaviour will be natural candidates for scrutiny and derision,” says Elliot Schrage, head of communications and public affairs at Google and formerly head of global affairs at Gap.

Yet while many companies have policies on how to engage with traditional media and even on blogging, few have any in-house rules covering the kind of instant response required by bloggers and social networks.

Nevertheless, say communications consultants, this should not prevent companies from engaging in the online debates. Moreover, their communications must, they say, be matched by their actions. “There’s a level of vigilance that didn’t exist two or three years ago,” says Mr Key. “Companies are going to have to continue to be good corporate citizens because if they don’t they’ll be called out on it very rapidly.”

Advice for managers venturing online

See what’s out there. New services can help companies analyse their online reputations. Blog-focused search engines such as Blogpulse or Technorati allow companies to search by keywords.

Respond pro-actively. Companies need to take part in discussions about their brands; these discussions will take place regardless, often in the most unpredictable ways. The discovery of the geyser-like effects of putting Mentos mints into Diet Coke or Pepsi led to thousands of videos on YouTube demonstrating the phenomenon.

Manage online conversations. Companies that enter the blogosphere need to be prepared to post even the most critical comments about their brands, products or behaviour. They also need to respond quickly and with the right voice. Communications that come across like corporate press releases will attract criticism.

Match rhetoric with action. No amount of online communication will save a company’s reputation if it is not reflected in its behaviour. And any gap between corporate pronouncements and corporate action will be quickly spotted and will be generally derided.

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