“What happens in Vegas…will probably end up on YouTube.”

Since the onset of truly interactive computer-mediated communication more than a decade ago (Web 2.0), pundit questions mainly revolved around whether digital social media could ever be effectively monetized.

Wall Street finally responded last May 19 with enthusiastic institutional and retail investor response to the initial public offering (IPO) of LinkedIn.com. Securities for the business networking oriented social media outlet were offered on the New York Stock Exchange (NYSE: LNKD) and the results that day constituted the biggest IPO since search engine Google Inc. debuted in 2004. LinkedIn was initially priced at $45, but opened at $83 up 84%. The stock eventually peaked at $122.70 before closing at $94.25, a 109% gain for the day, representing $8.9 billion in market capitalization.

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Despite the impressive results for the initial offering of publicly traded securities for LinkedIn and the fact that there are no longer questions about whether social media has authentic monetary value, the IPO was widely seen by financial and market analysts as preliminary at best.

LinkedIn capitalized on being the “first mover” among social media companies, prompting many to ask what will happen when Twitter, Groupon and most of all, Facebook with its 600 million subscribers, (any or all) decide to take their respective shares to the public marketplace. Will they trigger a second Internet bubble?

Underneath all of the euphoria (irrational exuberance?) about digital interactive media, the use of ones-and-zeroes, transmitted in packets across switches and routers or wirelessly via the satellite, are troubling questions about this relatively new means of communication.

There are publicly traded and privately held companies with products to sell, non-profits with missions to fulfill, governments with essential services to provide, and politicians with electoral messages to deliver. Most are using digital publishing in an attempt to reach their target audiences, but at the same time (and maybe truly for the first time) these very same audiences, some with competing agendas, have unprecedented capability to target the messengers. Instead of “vertical” one-communicating-to-many, it is increasingly “horizontal” with the “audience” participating in the conversation. The game has changed and the rules are still being developed.

Today, we can look back upon a growing litany of examples of how ease-of-use interactive publishing and related conversations are upsetting the best-laid public relations and marketing plans of those charged with reputations to protect and brands to manage.

Consider that one blogger ultimately prompted the recall of Intel’s vaunted Pentium processor; bloggers repudiated a “60 Minutes” story extremely critical of former President George W. Bush, leading to the “resignation” of Dan Rather; a BART passenger video-taped and posted footage of the 2009 New Year’s evening shooting of Oscar Grant, leading to a conviction of the officer in question and setting off civil disturbances in Oakland; undercover cameras and super-sensitive microphones discredited ACORN and NPR;  Rep. Anthony Weiner (D-New York) was pressured into resigning in the wake of his Tweeting of his “junk” to selected females across the fruited plain. Train Station Shooting

What, where, when and who will be next to experience the loss of reputation and branding control to interactive media? Has the digital playing field been leveled to an unprecedented effect? Is this an unintended consequence of Web 2.0?

Think of it this way, reputations and brands are now traded commodities in the marketplace of public opinion. And just like securities, reputations and brand equities can rise with “shareholder” approval or they can crash under pressure from this same audience.

The question is not whether there are unintended loss-of-control consequences of Web 2.0, but instead what are the strategies to safeguard reputations and brands, and how they should be implemented? The birth of micro-blogging/content sharing sites: LinkedIn in 2003, MySpace in 2003, Facebook in 2004, Flickr in 2004, YouTube in 2005 and the 140-character-per-message Twitter in 2006, rapidly accelerated the growth to a staggering number of Web 2.0 subscribers.

The power of each of these social media sites and the ones that will inevitably follow (e.g. Google+) is magnified by the number of friends, connections, contacts that can be reached with a short message and a few key strokes. Will publicly traded and privately held companies, non-profits, governmental entities, appointed and elected officials ever regain hegemony over their cherished reputations and hard-fought brands or must they learn to live with a permanent loss of total control?

The answer is undoubtedly the latter. If this is indeed the case, then what are reasonable techniques and strategies that can be employed in this Web 2.0 era of digital self publishing with ease-of-use software tools? Here are five reputation-and-brand protection strategic recommendations for consideration by public relations practitioners, marketing/brand management professionals and social media evangelists.

1.)   Quality Products; Credible Messaging

The keys to success will be the specific relevance of the message, and the effectiveness of the delivery of the message or program in the time and space where the potential customers want to receive it, not where the marketers want to shout it out,” Irene Dickey and William F. Lewis. 

The point being made by academics Dickey and Lewis is the best way to defend a reputation or a brand is to deliver credible messages in a timely and effective way to customers. Doing the right thing at the right time deserves to be rewarded regardless of the unprecedented speed of global communications. Is a good offense the best defense?

Take Zappos.com as an example. The $1 billion online shoe seller has a distinct philosophy of under-promising and over-performing for its customer base. The company’s leadership is constantly exploring way to sustaining the high quality experience it is known for – to deliver “wow” to its customers, suppliers and partners. The targeted result: Positive and consistent word-of-mouth advertising. Said Alfred Lin, Zappos chairman, CFO and COO: “…Word of mouth works a lot faster on the Internet than it does person-to-person because you can just e-mail out a bunch of your friends and say ‘hey I just had this amazing experience.’ That was one of the reasons that we wanted to keep upgrading shipping.”

lin Erik Qualman in his Socialnomics cited a study by the Strategic Planning Institute that 96 percent dissatisfied customers don’t bother to complain, and 63 percent of these silent dissatisfied customers will never buy from the vendor again. Through networked customer feedback, it is much easier for a company to respond and make things right. Douglas Rushkoff offered very simple advice: “Marketers need to learn that the easiest way to sell stuff in the digital age is make good stuff.” 

2.)   Treating Reputations and Brands As Tradable Equities 

“More young people will learn about IBM from Wikipedia in coming years than from IBM itself,” New York Times Columnist Thomas L. Friedman 

Qualman was just as direct as Friedman when he stated that if you maintain a large, well-known brand you can rest assured (or not rest assured) that there are online conversations, pages and applications being constantly developed around a brand. He cited an August 2008 Facebook search for lawn-care equipment provider, “John Deere,” and discovered 500 groups dedicated to John Deere; more than 10,000 users total in the top-10 groups. Chief competitor, Caterpillar, also maintained a page in John Deere’s top-10 listings and one simply called “John Deere Sucks!!!” also made the top-10 list on the social media site. Along with the ascent of interactive social media has been a corresponding decline of consumer trust in brands.

According to advertising agency, Y&R, consumer trust in brands dropped from 52 percent in 1997 (generally agreed upon birth year of Web 2.0) to only 22 percent in 2008. It should also be noted that the worldwide recession began in 2008, but that does not alone explain the 30 percent drop in brand trust.

Canadian author Malcolm Gladwell wrote that Facebook and other social media sites are extremely effective at building networks, which he said “are the opposite, in structure and character, of hierarchies. Unlike hierarchies, with their rules and procedures, networks aren’t controlled by a single central authority. Decisions are made through consensus.”

3.)    24/7/365 Monitoring and Response

“The digital bazaar is a many-to-many conversation among people acting in one or more of their many cultural roles. It is too turbulent to be directed or dominated,” Author and columnist Douglas Rushkoff. 

What is the direct effect of Rushkoff’s assertion about the turbulent seas of social media with its many-to-many discussants in the conversation? For those charged with protecting a reputation and safeguarding a brand, it means that the most carefully laid marketing and public relations plans can be shattered in record time.

It means that just as global equities are traded virtually every day of the year as the sun moves over the Nikkei in Japan, the Hang Sang in Hong Kong, the DAX in Germany to the FTSE in London to then to the NYSE and NASDAQ in New York, the same is true for brands. The sun never sets on global markets and brands; in fact brands are being traded on a 24/7/365 basis in the digital interactive marketplace of public opinion.

Consider the infamous sucker punch by Oregon running back LeGarrette Blount against Boise State’s Bryon Hout immediately following their game in 2009, and captured in all of its intensity by ESPN’s cameras. Today, there are 17,400 search engine optimization (SEO) results on Google for the keystrokes, “LeGarrette Blount sucker punch.”

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For the University of Oregon Athletic Department and its carefully crafted image, the damage from Blount’s actions was swiftly demonstrated in cyberspace with an immediate YouTube video, Wikipedia post and literally thousands of comments on Twitter and Facebook. A reputation and brand can come under pressure at any time of day or night, requiring constant vigilance and assigning individuals specifically charged and authorized to respond on behalf of a company, governmental entity, appointed or elected official or an educational institution.

4.)   Fiduciary and Corporate Social Responsibility

“Can companies do well by doing good? Yes – sometimes.” Aneel Karnani.

Publicly traded and privately held companies and by extension the public relations and business development firms that counsel them must worship at the altar of fiduciary responsibility. Karnani in his 2010 Wall Street Journal piece stated the global movement for better corporate governance dictates that executives must seek the best return possible for their investors. He said that managers who sacrifice profit for the common good also are in effect imposing a tax on their shareholders and arbitrarily deciding how that money should be spent. If push comes to shove between fiduciary responsibility and corporate social responsibility, the former will usually prevail…but still there are benefits for society.

Wrote Karnani: “Consider the market for healthier food. Fast-food outlets have profited by expanding their offerings to include salads and other options designed to appeal to health-conscious consumers. Other companies have found new sources of revenue in low-fat, whole-grain and other types of foods that have grown in popularity. Social welfare is improved. Everyone wins.”

Should companies spread this fiduciary responsibility (and by extension improving society) message via social media tools? The risk is being accused of “green washing” or something worse by detractors of the brand. Companies do not have a choice about participating in this on-line discussion. The question is how well they do it.

In particular, publicly traded companies have a fiduciary responsibility to generate the best return for their investors – in many cases their own employees – and why shouldn’t they triumph their activities on behalf of shareholder value? If communities, workers and the environment benefit from healthier foods, less-power hungry devices, more fuel-efficient cars, while at the same time related companies are producing returns for investors, then let there be a race to use social media tools for the gratification of the companies as well as their detractors. Truth should be the defense against “greenwashing” charges. Let the conversation commence.

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5.)   Honesty, Openness and Transparency

Companies don’t have a choice on whether they do social media; they have a choice in how well they do it,” Erik Qualman, Socialnomics, 2009

In the case of social media, someone is always watching YouTube videos, posting JPEGs on Flickr, sending Tweets via Twitter, inviting connections on LinkedIn or friending or unfriending on Facebook. There are frankly millions of netizens and they are always on, around the clock and around the world. And the rate of innovation is accelerating at a pace never seen before in human history. It took 38 years for radio to reach 50 million users;  television 13 years; the Internet, four years; iPod, three years; Facebook added its first 100 million subscribers in just nine months.

Publicly traded and privately held companies, non-profits, governmental entities, educational institutions and appointed and elected representatives live in a fish-bowl world. The rules of the game have changed, and yet there are still rules of engagement. Ghostwriting of executive blogs should to be publicly disclosed. Companies need to focus on quality products, under-promise and over-deliver.

Statements need to be credible and respectful or as John Madden once said: “I will never say in private what I wouldn’t say in public.” The Web 2.0 digital world is demanding accountability, honesty and transparency. If these simple rules are followed the consequences associated with the loss of control should be benign. However, if the conduct is not becoming of a reputation that has been hard-earned and brand equity that has been built, both of these can come tumbling down in just a matter of mouse clicks.

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