The Blogosphere, and its Increasing Impact on Business
HIGH STAKES
High Stakes™ provides best practices for communicating on the most critical corporate, legal, and international issues of the day.
THIS ISSUE: THE BLOGOSPHERE'S INCREASING IMPACT ON BUSINESS
THIS ISSUE: THE BLOGOSPHERE'S INCREASING IMPACT ON BUSINESS
On September 8, shares of UAL - Parent company of United Airlines, one of America’s most recognized corporate brands, fell 75 percent in less than two hours. On October 3, the stock of iconic Apple Computers plummeted 10 percent in less than 10 minutes. While this might not come as much of a shock during the current financial crisis, what is surprising is the fact that the nearly fatal stock crash of United and the precipitous drop of Apple were caused not by poor financial reporting, but by inaccurate reports from the blogosphere.
United stock plummeted after a false bankruptcy report was posted to the Income Securities Advisors, Inc. blog on Bloomberg’s Website. Apple’s stock tumbled after a false report claiming Steve Jobs had suffered a heart attack was posted to CNN’s iReport.
In March, High Stakes examined the emerging impact of the social media on business. As the events of the last six weeks amply demonstrate, the impact is no longer merely “emerging;” it has arrived. Today, companies face a simple choice: Engage the blogosphere and influence the online conversation, or pretend it isn’t there and let others control the story.
In this issue, we present the blogosphere’s rules of engagement…take an in-depth look at the 2008 State of the Blogosphere report from Technorati – the industry’s leading blog authority – and tap Technorati CEO Richard Jalichandra for his insights…and glimpse further at what’s next for social media and how companies will have to evolve to keep up.
The 2008 State of the Blogosphere report from Technorati shows that bloggers are smart, affluent, capable, influential, and more than willing to make your company the subject of high praise, abject ridicule, or no-holds-barred exposés. And with data released earlier this year by Omnicom Group showing that 71 percent of journalists now check blogs on a regular basis for story ideas, there’s no doubt that bloggers wield the power to break stories, shape perceptions, and affect buying decisions around the world.
The question before business today is no longer whether to join the online conversation, but how.
Before engaging the universe of more than 112.8 million bloggers globally, it is important to understand fully the diverse group of individuals that powers this digital medium:
- 70 percent of bloggers have college degrees;
- 65 percent of bloggers have a household income above $75,000 and 25 percent have a household income above $100,000;
- 44 percent of bloggers are parents;
- 56 percent of bloggers are employed full time; and
- The highest concentrations of bloggers in the U.S. are in the technology, cultural, and business centers of San Francisco, New York City, Chicago, and Los Angeles.
Next, expect the spotlight to shine on you:
- 89 percent of bloggers post about brands that they love or hate;
- 63 percent of bloggers post about company information or gossip; and
- 79 percent of bloggers post about everyday experiences in retail stores or with customer service.
Given the fact that there are more than 112 million active blogs in the world – and that the popular ones attract more than 10 million U.S. readers a month – companies that choose to ignore the blogosphere do so at their own peril.
Monitor the blogosphere. Job one is to implement a system that tracks all postings related to your company and your top brands. Not only do you gather invaluable intelligence about the views of your customers, investors, and other stakeholders, you develop an early warning system that facilitates solutions to problems before they become crises and reshapes negative stories before they reach the mainstream media.
Engage the online conversation. The harshest critique of your company or brands is only the beginning of a conversation. So treat it that way. By posting comments to blogs that highlight your company – either negatively or positively – or even by starting your own blog, you send a powerful message to your stakeholders that you value their opinions and are committed to offering them the best service possible. Every critical blog entry about your company or brand is an opportunity to engage the conversation and the millions of consumers of social media content.
Remain vigilant. Just as good conversations require more than one sentence, effective blogs publish new posts as often as possible. When a corporate blog is updated only once a month, it lacks relevancy in a medium that operates in virtually real time. Moreover, frequent posts enhance your blog’s search engine optimization, which means that, when Internet users search online, they are likelier to see your blog – and your messages – atop your competitors. Nearly a quarter of all online content returned from search engines about your brand link to blog posts. Failing to aggressively engage this medium gives your competitors and detractors a valuable leg up on search optimization.
Diversify messengers. The online community isn’t only interested in how the C-Suite sees things. They want to know what the rank and file think as well. Authorize certain employees at all levels to occasionally contribute to the online conversation. Even though employee posts must be subject to the approval of management before going live, they do still communicate trust, openness, and transparency to your online audience.
Make it a true conversation. As Richard Jalichandra reminds us in the interview below >>, your blog is not about you; it’s about your stakeholders. Understandably, companies dread the idea of public comments on the corporate blog. Know, however, that you can and should set clear parameters as well as review comments before they go live.
Richard Jalichandra, CEO of Technorati, is a veteran Internet executive who has played leadership roles across the spectrum as client, as publisher, and in agencies and advertising networks.
One of the most widely-respected authorities on the blogosphere, Mr. Jalichandra shared his thoughts with High Stakes:
Richard Jalichandra: What I found most interesting was the level of sophistication and professionalism. The average blogger has been at this for three years, and more than half have had more than one blog. Bloggers are making serious investments both in terms of time and money – even more so with bloggers who have advertising on their sites. They’re also incredibly advanced in their use of web 2.0 tools and traffic generation, and this last fact has big implications for marketers who advertise with bloggers…These authors are all about information and influence, and they’re everywhere in the social media space, always linking back to their blogs as part of their identity.
Another point of interest: We asked bloggers about their blogging style. There’s definitely a perception by some that bloggers are largely gossiping and ranting. We found that the majority of bloggers defined themselves as “sincere” or “expert” and that less than 1 in 5 consider themselves to be “Snarky” or “Confessional.”
Another point of interest: We asked bloggers about their blogging style. There’s definitely a perception by some that bloggers are largely gossiping and ranting. We found that the majority of bloggers defined themselves as “sincere” or “expert” and that less than 1 in 5 consider themselves to be “Snarky” or “Confessional.”
Having watched the industry grow, do you believe that companies have come to fully understand the impact that blogs can have on their business prospects and reputation?
Richard Jalichandra: Almost all bloggers - 90 percent - are talking about brands, so your brand is in the blogosphere whether you want it to be or not. But we’re definitely seeing companies engage. One in three of the bloggers we surveyed has already been approached to be a brand advocate. A lot of the clients we talk to are in the early stages. They may not be participating yet, but they’re listening to what the bloggers and their audiences are saying about them.
It’s a big shift to go from the controlled messaging of the past to the transparency mandated by social media. There are no secrets in the blogosphere. When brands do reach out, in a genuine and open way, they’re very happy with the results. Bloggers are fair, professional, and very receptive.
Many companies are establishing defensive postures with respect to the blogosphere. Are there specific opportunities for companies and brands to proactively and positively engage the conversation that they have yet to realize?
Richard Jalichandra: With three-quarters of the U.S. Internet audience reading blogs, blogs are mainstream media now, and the brands that will succeed are the ones that realize this. But it’s more complex than simply sending out a press release. It’s sitting down and having a conversation.
[Companies] should also realize that the conversation doesn’t have to be about them. They can create, take part in, or simply be present alongside whatever conversation is most relevant to their audience.
In Technorati’s 2008 State of the Blogosphere report, you found that more than four in five bloggers post product reviews or blog about brands they love or hate. Given the sheer size of the blogosphere, how can a company keep up with everything that is being said that affects its brand?
Richard Jalichandra: Again, it’s about changing your way of thinking. This is an incredible opportunity to instantly see the full scope of consumer sentiment around your brand. Brands no longer have to rely solely on focus groups or market research as their only sources of information. It’s all right there.
Tools like Technorati’s blog search let you see everything that’s being said about any brand or topic and how the levels of attention are moving up or down. Sentiment analysis is another very useful tool. Everyday utilities like RSS and Google Alerts are indispensable as well.
Can you share any examples of companies that failed to understand the rules of engagement for the blogosphere? What could they have done better?
Richard Jalichandra: The June dust-up between the Associated Press and the blogosphere was one of the most fascinating stories of the year. The AP began issuing takedown notices, and requesting that bloggers pay for content. Bloggers cited “fair use” laws and [pointed out] that the AP frequently used content from bloggers. Michael Arrington of TechCrung and many other high-profile bloggers called for a boycott of AP content and the story received a lot of mainstream media attention. The AP ended up softening its stance, working with the Media Bloggers Association to resolve the situation.
Many companies are looking for best practices for engaging the social media space in particular. Can you share one or two examples of successful corporate engagements in 2008? What was it that made these specific approaches successful?
Richard Jalichandra: One of the most successful examples from one of our clients was Hummer. We created a custom channel around the NFL Draft, which they sponsored – so Hummer was able to reach an audience with sky-high affinity to their brand [and] in a more engaging way by tapping into one of their passion points. The key takeaway here was Hummer associating its brand alongside a conversation relevant to its target audience. You don’t always need to place your brand in exactly contextual content to what you’re selling. Instead, you can achieve great results by associating with any content that your audience likes.
What are your must-read top five business blogs?
Richard Jalichandra: I can’t play favorites – but I would bet that if you asked anyone their top five must-read business sources, at least one of them will be a blog. That said, I probably read ten to fifteen business blogs per day.
What are the three most important things for any company to remember as it prepares to engage the blogosphere?
Richard Jalichandra: First, listen. This is not a problem to solve but an unprecedented opportunity to truly know what people think. Know who is blogging about your brand and what they have to say.
Second, be authentic. There are no secrets in the blogosphere. The one-way conversation that worked 10 years ago with traditional media doesn’t translate to the blogosphere.
And third, remember that it’s not about you. The conversation might be about your brand, but it’s more likely about the issues and topics that surround your brand or market segment, or simply the passion points for your audience. Find the most relevant conversation and participate or simply be present alongside it.
Internet leaders like Richard Jalichandra say the biggest shift in the blogosphere will be the transformation of blogs into advertising mediums.
As Mr. Jalichandra says, “The contextual nature of the content, combined with loyal audiences who view the authors as credible, makes blogs much akin to advertising on any mainstream editorial site. And as bloggers raise their game to professional status, advertiser concerns with UGC [User Generated Content] will be significantly lessened.”
For businesses that have finally embraced in the past year the power of online advertising on traditional online destinations, it is time to consider the benefits of “micro-tising” – advertising within niche websites and blogs primarily populated by your target audience(s). Executed properly, the return on investment has the potential to far outweigh that of traditional online advertising.
And, as Mr. Jalichandra says, “You don’t always need to place your brand in exactly contextual content to what you’re selling. Instead, you can achieve great results by associating with any content that your audience likes.”
What better time is there to invite High Stakes readers to join Levick’s online community than in an issue devoted to blogs? Levick’s Bulletproof Blog offers Insights and analysis on the most pressing communications issues facing companies, countries and brands today. This is the blog for bulletproofing a reputation when it matters most – and we invite all of you to share your ideas and opinions.
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Labor and Employment:
Outsourcing jobs is the latest among many recent communications challenges for management – especially if newly elected politicians pursue their agendas.
Accidents and Disasters:
Accidents test the corporate mettle like few other crises. Can you communicate calmly, coolly, and collectedly when conditions are anything but?
Labor and Employment:
Outsourcing jobs is the latest among many recent communications challenges for management – especially if newly elected politicians pursue their agendas.
Accidents and Disasters:
Accidents test the corporate mettle like few other crises. Can you communicate calmly, coolly, and collectedly when conditions are anything but?
Airlines:
At the height of the holiday travel season, we’ll examine how the airlines can best deal with the ups and downs of an industry in constant turmoil.
At the height of the holiday travel season, we’ll examine how the airlines can best deal with the ups and downs of an industry in constant turmoil.
More to come:
- Antitrust
- Board or Board Member Liability
- Coming to America
- Diversity
- Education
- Executives Behind Bars
- Food
- Global Capital Markets
- Intellectual Property
- Internal Communications
- Internal Investigations
- Monetizing Moments
- Money Laundering/Money Transfers
- New Media/Social Networking
- Product Liability
- Professional Services Crises
- Public Equity
- Whistleblowers
- Reputation Management – Celebrity
- Reputation Management – Corruption
- Reputation Management – SEC Investigations
- Tourism
- Trade
Next month in High Stakes: BUSINESS COMMUNICATIONS IN A 'POST-PARTISAN' WORLD