The Fail Trail: Analyzing the impact of a PR Crisis

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What happens to a brand’s reputation when they face a PR nightmare that plays out on social media?

Alterian analyzed three case studies -Nestle, United Airlines and Dominos - to measure the effect a crisis has on a brand. How severe was the public’s reaction? How long did it take for the brand’s reputation to return to their pre-crisis average? How varied was the impact for each of these slightly different cases? Does the way a brand responds impact the severity of the crisis?

Check out our analysis of what happens when a PR nightmare strikes.

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The Fail Trail: Analyzing the impact of a PR Crisis

  1. 1. The Fail Trail:Analyzing the impact of a PR Crisis
  2. 2. IntroductionCrisis Management Theory – Proactive Reputation Monitoring • Looking to understand the significance of, and if actively listening can decrease the severity of a crisis – Proactive Reputation Management • Understanding if a brands initial reputation can decrease severity of crisis – Proactive Reputation Response • Determining if a follow-up response and action affects the opinion of the brand during a crisis• Search Setup • Identified three global brands • Historical data over 6 month period • Each a different example of a crisis • All well known PR disasters
  3. 3. Domino’s• Example of crisis: Employees “Caught in Act”• Employees post video on YouTube of health violations.• Domino’s responded with apology video and legal actions against employees.• We set up historical social search to go back and look at data from 1/16/2009 to 7/16/2009. That is 3  months prior to the crisis and 3 months following.
  4. 4. United• Example of crisis: “Bad Customer Service”• United breaks Passengers guitar and doesn’t pay for it.• Musician’s song about it goes viral.• We went back and looked at conversations from 4/06/2009 to 10/06/2009.
  5. 5. Nestle• Example of crisis: “Brand Hijacking”• Nestle tries to censor campaign against them regarding deforestation.• Facebook page gets taken over with negative posts.• We went back and looked at conversations from 4/06/2009 to 10/06/2009.
  6. 6. Overall Analysis Average Net Positive Pre-Crisis Net Positive Sentiment Dominos PC United PC Nestle PC Dominos United Nestle Average Average Average 7.56% 6.93% 24.89% 10.94% 0.00% 14.57% 9.99% 1.69% 19.49% 13.37% -4.07% 18.42% 5.64% -0.97% 17.14% 17.29% 1.07% 12.63% 3.28% 4.44% 18.85% 13.27% 4.80% 19.75% -0.28% 4.61% 17.77% 12.30% 2.03% 26.43% 13.02% -0.75% 20.51% 10.08% 2.73% 18.60% 13.43% -0.57% 24.34% -16.72% -9.02% 21.51% -6.80% -9.78% -11.24% 10.00% -5.54% 1.78% 2.87% -11.51% 13.01% 7.78% -7.88% 18.72% 12.24% 1.16% 11.97% • Net positive sentiment percentage is defined as the percentage of positive 12.80% 4.09% 20.60% conversations minus the percentage of negative conversations. 17.70% -5.91% 19.92% 17.28% 0.00% 22.04% • Prior to the crisis, Nestle had the greater average percentage of overall positive 11.61% 0.79% 15.47% 8.87% 1.02% 15.25% conversations while United had the fewest. 11.55% 1.44% 16.27% 16.29% 52.39% 21.66% • Each crisis happened at week 13 and took four to six weeks to return to the pre- 18.10% 7.54% 18.38% crisis average.
  7. 7. Domino’s Analysis Dominos Dominios Average DFA 9.99% -2.43% 9.99% 0.95% 9.99% 3.38% 9.99% -4.35% 9.99% 7.30% 9.99% -6.71% 9.99% 3.28% 9.99% -10.27% 9.99% 2.31% 9.99% 3.03% 9.99% 0.09% 9.99% 3.44% -0.58% -26.71% -0.58% -16.79% -0.58% 0.01% -0.58% -7.12% -0.58% -2.21% • There was a large spike in the distance from average when the crisis 14.05% 2.25% immediately occurred. 14.05% 2.81% 14.05% 7.71% 14.05% 7.29% • Post-crisis, Domino’s average positive sentiment actually increased from 14.05% 1.62% 9.99% (prior to the crisis) to 14.05%. This could be attributed to what experts 14.05% -1.12% called immediate response to the crisis and the video apology they issued. 14.05% 1.56% 14.05% 6.30% 14.05% 8.11%
  8. 8. United Analysis United United Average DFA 1.69% 5.24% 1.69% -1.69% 1.69% -5.76% 1.69% -2.66% 1.69% -0.62% 1.69% 2.75% 1.69% 3.11% 1.69% 2.92% 1.69% 0.34% 1.69% -2.44% 1.69% 1.04% 1.69% -2.26% -7.38% -10.71% -7.38% -11.47% -7.38% -7.23% -7.38% -13.20% • The plunge in sentiment when the crisis occurred wasn’t as drastic as the -7.38% -9.57% other brands. This could be due to the already low sentiment surrounding the -7.38% -0.53% 6.95% 2.40% United Brand. 6.95% -7.60% 6.95% -1.69% • Following the crisis the average positive sentiment was actually greater than 6.95% -0.90% it was prior as well. This is due to the giant spike in conversations towards 6.95% -0.67% 6.95% -0.25% the end of our 6 month search range, around a Starbuck gift card giveaway 6.95% 50.70% on all domestic flights on United. 6.95% 5.85%
  9. 9. Nestle Analysis30.00% Nestle Nestle Average DFA25.00% 19.49% 5.40% 19.49% -4.92%20.00% 19.49% -1.07%15.00% 19.49% -2.35% Nestle 19.49% -6.86%10.00% 19.49% -0.64% Nestle PC Average 19.49% 0.26% 5.00% 4 per. Mov. Avg. (Nestle) 19.49% -1.72% 0.00% 19.49% 6.94% 19.49% 1.02% ‐5.00% 19.49% -0.89% 19.49% 4.85%‐10.00% 9.29% 2.02%‐15.00% 9.29% -30.73% 9.29% -17.71% 9.29% -6.48% 9.29% -0.77% • Nestle had the greatest drop in positive sentiment from the average at the 9.29% -7.52% time of the crisis. Fittingly, Nestle also had the highest overall positive 17.95% 1.11% sentiment and thus the “furthest to fall.” 17.95% 0.43% 17.95% 2.55% 17.95% -4.02% • After the crisis Nestle’s brand returned to nearly the same average as it was 17.95% -4.24% prior to the crisis. The difference could be attributed to the lasting affect that 17.95% -3.22% 17.95% 2.17% the crisis had on some brand supporters. 17.95% -1.11%
  10. 10. Domino’s vs. Nestle Analysis • Nestle and Domino’s are very similar in their sentiment pattern. • Possible reasons could be that they are both in the food industry and have a positive average sentiment prior to the crisis. • United has a more stable, but lower sentiment percentage, thus the percentage doesn’t move as much when a crisis occurs.
  11. 11. Insights• Monitoring – If a brand is monitoring the conversations surrounding sentiment, they may be more likely to take action on a crisis in a positive manner by learning from experiences. – An example is United defending their customer service and increasing positive sentiment by issuing Starbucks gift cards on flights.• Management – It seems as though a brand’s initial reputation and average sentiment does have an effect on the crisis, but in an inverted fashion. – Both Nestle and United had a greater positive sentiment and dropped further. United, on the other hand, didn’t drop as much during the crisis because people expected this from the brand.• Response – Initial response is not necessarily a good thing, and interaction can influence an audience’s perception of the brand. – An example is Nestle and how they attempted to defuse a growing social situation by censoring content and going back and forth with commenters on their Facebook page. This is not an ideal way to respond to a crisis.
  12. 12. Future Analysis Areas for Future Investigation: – Does the brand’s industry affect the impact of the crisis (similar patterns with Dominos and Nestle)? – Does the public’s sentiment about a brand *before* a crisis affect the negative impact of a PR Crisis? – Can a brand’s response lessen the long term impact of a PR Crisis?
  13. 13. THANK YOU! Please contact us with any questions Steve True: steve.true@alterian.com @steventrueUK/EU: +44 (0) 117 970 3200 | US: +1 312 704 1700 | Asia/Pac: +61 (2) 9968 2449 Web: www.alterian.com | Blog: www.engagingtimes.com | Twitter: @Alterian Slideshare: Alterian | YouTube: engagingtimeslive | Facebook: The Real Alterian
  14. 14. info@alterian.com www.alterian.com www.EngagingTimes.comStayConnected… www.youtube.com/user/EngagingTimesLive @Alterian www.slideshare.net/Alterian LinkedIn Groups: Alterian www.facebook.com/AlterianFB

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