Navigating Social Media for Brand and Reputation

The Internet has transformed virtually every company, empowering consumers, increasing the threat of new entrants, and creating new competitive opportunities or risks. In his Nobel Prize winning paper, The Nature of the Firm (1937), Ronald Coase noted that the primary economic rationale for integrated corporations was the lowering of search and transaction costs. The Internet has stripped these advantages from many companies. As a result, a “Long Tail” has developed (Anderson, 2004), allowing many businesses to use the Internet to realize significant profit from selling to niche rather than mass markets.

The term social media relates to those web-based activities that allow individuals to publish, share or network with others. Social media are like a big cocktail party. Markets are the conversations taking place. How one handles these conversations becomes more critical. It also changes marketing since relationships are more difficult to monetize than transaction. As a result, we are seeing a convergence of marketing, advertising and public relations.

Research by Razorfish and eMarketer have found that a majority of customers are influenced in their perceptions of brands by social media. These findings support the Edelman Trust Barometer findings that “a person like me” has become the primary influencer of perceptions.

There are still many who are confused as to whether they should have a strategic plan, a social media plan or a “Twitter” or “Facebook” plan. I would offer the following recommendations:

Technology will continue to evolve and change. Focus on strategy & reputation objectives, not on the technology.
Understand that social media are not all the same. Some are good for listening; some for sharing; some for networking; and others for publishing. Engage in all appropriately.
Become a real member of the community—once you have built credibility as a legitimate member of the social community, you might be asked for some suggestions and information.
Focus on your organization’s values—they must be honest and transparent. Values are the foundation of reputation. Clarify your values and hold people responsible for upholding them—they are now on full display.
Engage your employees and help them to understand their role in living your strategy, brand attributes and reputation objectives. Make certain that you have clear guidelines for employee use of social media.
Build Relationships. As Jim Grunig has noted, this may be the core competency of public relations. Relationships build value and multiple stakeholder relationships may well build value exponentially.
Monitor, listen and remain calm. Not everything said will be positive. You do not have to defend every criticism. Stop thinking of yourself as a corporate messenger and focus on being a relationship manager.