Only 3 months in and already it has been one of the most tumultuous and topsy-turvy years for one of the biggest of the entertainment industries.
I'm talking of course, about gaming. Not the gaming as in Pacman, quarters and nerds, but gaming as in Call of Duty, billion dollar global brands and a industry overtaking the movie industry in revenue.
Yes, in this modern world, gaming is something to be taken seriously as an entertainment medium and as a business . The coverage we've seen coming from the industry event known as the Game Developers Conference (GDC ) is testament to that.
I think it's fair to say that gaming has had a few high profile issues so far this year. Two rather large releases (that shall remain nameless) have been met with less than rapturous acclaim from journalists and by the consumers themselves, gamers.
As a direct result of these two, very different releases, as different as say...... two simulated alien colonial cities **knowing wink from author**, the reputational damage to the publisher and developers behind them has been palpable. Armed with a righteous sense of indignity, an often tenuous grip of the English language and a host of platforms to vent their frustrations on, the sharp end of the gaming community has been very vocal indeed.
At GDC the legacy of these high profile incidents drove some of its major themes. The three big themes we saw coming out of GDC all predicted a future direction of the gaming industry and in fact all the talk of future & change was a strong theme in itself.
The year of next-gen...? Certainly
The year of indie..? Could well be
The year of mobile gaming...? This writer is still not convinced on that one.
When we monitored the online chatter around GDC this year, we saw the usual patterns of low engagement in the build up to the event, big peaks during the event and a gradual tail off of chatter post event. This is nothing surprising or out of the ordinary, that's what any PR or marketing exec would have predicted.
The interesting thing that did emerge from our look at the buzz was the difference in coverage from the two big competing hardware brands over the course of GDC, Playstation and Xbox (omitting Nintendo as their latest console is already out)
It should be noted that not every mention is specifically about the hardware but even so, Sony have announced their PS4 system but Microsoft have kept quiet as yet but almost certainly have a successor to the all conquering Xbox 360 and the smart money is on them unveiling it at their press event on April the 26th.
That tactic looks to have paid off as Xbox brand coverage wiped the floor in volume of mentions over Playstation brand coverage. Whether its games, hardware, rumours or expectant chatter from gamers, a large proportion of the online buzz seems to be about Microsoft's new system and this is some achievement given Microsoft's recent gaming reputational issues with Windows 8 and tight lipped silence so far, on the next generation.
Whatever this year holds for the gaming world, next gen consoles, the fall of the big publishers, the rise of the indie publishers, microtransactions, always online DRM, mobile gaming, scalable engines, destructible scenery, yearly sequels, android consoles or even VR, that the influence of consumer sentiment expressed through social media, forums and comment tails is now a bigger driving force for gamers' buying habits than a games marketing campaign.
Publishers now have a reputation defined by many influences, some out of their control. A CEO's statements about monetization now has a significant effect on a publisher's brand reputation and this brand reputation, based on how a publisher's business actions are interpreted by press and gamers are becoming as much as a driver for game buying choices as review scores.
In a year where the industry is looking to its future, often its focus due to the nature of the beast, it's this writer's opinion that game publishers should be looking at how their brands are truly seen now so that the bright next future actually materialises.
A swift response, a heartfelt apology and news updates are key to averting a PR disaster, as BP and other advertisers have found.
For every well-planned ad campaign, there is also a PR disaster potentially waiting to undermine it. Most recently, Tesco has had to issue apologies about the presence of horsemeat in its burgers to reassure customers. When a crisis hits that's as big as the Deepwater Horizon oil spill in the Gulf of Mexico, it demands an all-hands-to-the-pump approach to marketing and years of attempting to rebuild reputation. Welcome to BP's world in April 2010. Immediately after the disaster, as you might expect, ads appeared in the press to inform consumers and show efforts to clean up. But, more interestingly, the $93 million the oil giant spent during 2011, and every US above-the-line ad since, have been almost entirely designed to refuel goodwill towards the company
Primarily, they have highlighted the brand's desire to rebuild local communities and provided updates on the clean-up work. YouTube was a key medium, with the BP channel showcasing the company's work to boost tourism and help locals get their lives back together. So was BP's Olympic Games sponsorship, designed to convey that the company is both responsibly aware and global. The "fuelling the future" campaign and its emphasis on finding alternative energy solutions was integral to this. However, a launch ad showing Jessica Ennis running along a beach was judged by some to have got off on the wrong foot. Sponsorship of the Cultural Olympiad and Paralympic activity have been activated below the line with events, competitions and workshops, some of which have attempted specifically to engage a teenage audience, while others aimed to regain trust in the UK and champion the company's British roots. Print, out-of-home and online ads celebrated athletes' and workers' contribution to the Games with BP's inclusive "here's to the home team" campaign.
Any fleet-of-foot responsiveness came in the form of ads congratulating athletic ambassadors on their success and informing consumers of how many journeys were offset during the Games. Now the brand is expected to draw a line under the oil disaster with a return next month to ads that showcase the contribution BP makes to society. Other brands have had less environmentally catastrophic disasters to deal with and have reacted in a variety of ways. Starbucks and Barclays tried to apologise in open letters after accusations of UK tax avoidance and Libor-rigging respectively - but still were taunted in social media. Domino's Pizza used the need to counteract a YouTube film - in which employees abused customers' food - as an opportunity to revamp areas of its business and apologise. The PR disaster was the catalyst for "pizza turnaround". This was a campaign that began with the chief executive apologising on YouTube and - via a massive social media drive, online delivery tracking and iPhone apps, plus taste tests, TV ads and more - resulted in a reputation that is arguably stronger than ever.
But perhaps some of the clearest examples of how to make the best of a social media gaffe come from KitchenAid and the American Red Cross. Speed of response and consistent apologies from the head of the company managed to pull KitchenAid back from the brink of social opprobrium after one of its corporate Tweets made a joke about Barack Obama's grandmother dying. And humour did it for the American Red Cross when an employee accidentally posted a personal message on the charity's official Twitter feed about "getting slizzerd". The employee and the brand deflated the situation with swift apologies and tongue in-cheek posts. Even Dogfish Head beer - the apparent cause of any "getting slizzerd" - got in on the act with a fundraising Tweet for the charity.
Strategic Opinion Trevor Hardy, Founder, The Assembly More truth, less marketing may be the right approach in the current climate, as the world of business and governments shift from one crisis to the next. A case in point is Starbucks in the UK and what could have been a taxing disaster for the business as many action groups,politicians and media announced their intent to boycott the brand. But Starbucks' approach was immediate and frank; not wrapped up in spin or excuses. It wrote open letters to customers, laid bare the real state of its finances in digital and social channels, and spoke in front of politicians. It was honest, in plain English, about where one could see questionable tax behaviour; it put a convincing case forward and encouraged debate. The power of the response across channels was that it was fast, unpolished and, like some of the best marketing, felt very little like marketing. Sometimes, the truth hurts; but, in Starbucks' case, the truth helped.
This article was first published in print and online at: campaignlive.co.uk
What is Reputation Research?
In order to thrive in today's ultra-competitive, connected market, companies and brands need to actively monitor and then manage their reputations. This means knowing what those key stakeholders inside and opinion-formers outside the company think of it. It means keeping an informed eye on what the mainstream media are writing and broadcasting about it. And it means making sense of what connected customers, consumers and stakeholders are saying about it. For in the age of social media, brand management is no longer the preserve of the brand manager.
Why should you carry out reputation research?
Companies and brands should conduct reputation research to benchmark how they are performing against market expectations and against competitors. By measuring, monitoring and benchmarking corporate and brand reputation, they can make informed, evidence-based decisions about what they need to do and say differently. Done right, reputation research should inform, define and refine comms strategy and behaviour in the round.
Who uses reputation research?
All sorts of organisations use reputation research. Public, private and third sector. Profit, not-for-profit and education. B2B and B2C. Any and all companies and brands that have a reputation at some level in the public domain. Organisations that have discrete and identifiable stakeholder groups who help to shape opinion and attitude that can impact - positively and negatively - on reputation and performance.
Typical buyers of reputation research include:
- Consumer brands that have lost their sparkle or are challenging for market leadership
- National, international and transnational Government departments seeking to engage and influence their constituency
- Multinational corporations looking to expand into new markets, either creating new categories or entering into hotly-contested space
- Financial services corporations operating in tightly regulated markets
- Academic institutions looking to reposition or consolidate their offering to prospective students
- Companies whose licence to operate can be compromised by misuse, such as the food, alcohol and automotive industries
Buyers come from a range of disciplines, from corporate communications to marketing, investor relations to marcomms, integrated comms to procurement.
How do you get the best out of reputation research?
To get the best out of reputation research, organisations need to abandon fear of what the research may show and empower and encourage their research partner to ask the questions of the stakeholders and opinion-formers that matter. They should enter into the process of commissioning reputation research with an open mind, ready to change, and not just looking for answers that confirm their hunches. Although they will have their preconceptions of what the answers might be, they need to trust in a skilled research partner to unearth the actionable insights that can enhance communications and business performance, even if those insights sometimes bring uncomfortable truths with them.
What are the costs and benefits of reputation research?
Like all genuinely insightful management information, reputation research comes at a cost, though starting with a toe-in-the-water piece of qual research among targeted stakeholders need not be expensive.
The benefits of reputation research can be huge. By correctly understanding and interpreting how the organisation performs on the reputation drivers that matter to its unique group of stakeholders, the leadership can make the informed, evidence-based decisions they need to improve both reputation and performance. Reputation research is about more than just effective communication. Proactively managing reputation leads to improved business performance.
At Echo Research, Ebiquity's reputation research practice and part of the Ebiquity family since 2011, we focus exclusively on reputation research. Through primary market research, in-depth media analysis and cutting through the clutter of social media, we help companies and brands protect, manage and grow their reputation to help grow their bottom line.
British consumers are increasingly turning to social media sites to 'hashtag' and 'bashtag' brands, rather than calling their customer service centres.
Brands also feel the change, and are starting to work out the best ways to engage and tackle the social media customer.
Echo Research and Fishburn Hedges identified six actionable insights that well-known brands, such as Barclaycard, BT and Sainsbury's often practice, such as 'choosing the right battle - but entering it fast' and 'not letting social media define you'.
But how did we reach this conclusion? To start with, Fishburn Hedges ran an online poll with 2,000 consumers nationwide, followed by in-depth interviews, conducted by Echo Research, with several blue-chip companies, including PepsiCo, HSBC and Oasis.
The social media savvy brands were more than happy to speak to us about topics including: their use of social media, who is responsible for their social media sites, whether they've ever experienced a customer backlash and how they dealt with it, and how they publicise their use of social media sites.
At Echo Research, we often conduct qualitative interviews to get to the heart of an issue, while probing and prompting our way through a series of questions and answers. We find that this traditional - analogue! - method is still one of the best for understanding a customer, stakeholder or opinion former, to ensure that an opportunity or threat is understood in depth, so that clear recommendations can be accurately passed to a client.
However, as our research shows, qualitative research works exceptionally well when hand-in-hand with quantitative research. The findings are more substantive and robust, yet also are rich with ideas and opinions. On this occasion, merging the insights from customers and brands offered a truly holistic picture of the current situation from both sides of the cash till to ensure that the findings are more insightful, powerful and genuinely actionable. We also have the technology to make sense of social media through our Echo Sonar platform, sorting the digital wheat from the chaff, enabling brands and companies to understand whether there is genuinely a storm brewing or whether it's just in a teacup.
Dan Soulas explains how what stakeholders think of your brand is responsible for an average of 31% of US share prices.
Few CEOs would question that corporate reputation ranks amongst their most important assets. However, hardly any would be able to say exactly how much it's worth.
More importantly perhaps, few would be able to say with any confidence that they knew exactly what they should be doing to manage and ultimately maximize the value it represents.
Our research, however, reveals that:
- Corporate reputation was adding close to $3.4bn of shareholder value to companies across the S&P500 as at August 2011.
- The proportion of a company's market capitalization attributable to reputation averages 31% across the S&P500.
In fact, a rise in the value of corporate reputation in the last four years has laid the foundations for the share price recovery that we see today. Although many corporate reputations suffered in the turmoil precipitated by the failure of Lehman Brothers in 2008, reputation has been an important driver of stock price growth since then.
Our analysis shows that in the immediate aftermath of the 2008 market collapse, the average contribution of reputation to company value in the S&P500 fell by 3 percentage points to 13%. Since then, it has grown steadily in absolute terms and now represents 31%.
Naturally as reputation has grown its share of company value, some companies have performed better than others. The average contribution of reputation of the largest 20% of companies (by market cap) tracked is 45%. The top performing organizations are Apple and Google with a 58% contribution.
By contrast the contribution of corporate reputation in the bottom 20% of companies analyzed is only 13% and, in many cases, poor reputation is destroying value and reducing market capitalization.
The bottom line is that corporate reputations are now underpinning investor confidence in companies' ability to deliver the economic returns expected.
On the whole, the larger, and arguably more "communications sophisticated" companies, are more successful at creating value through their corporate reputations.
Nevertheless reputational value can be a fickle friend and can, and sometimes does, change quickly. Although the reputation contribution of the companies common to both our 2011 and 2010 studies increased by an average of 11%, individual changes ranged significantly.
The 10 largest risers registered an average increase of 28 percentage points while at the other end of the spectrum the 10 largest fallers declined by 11 percentage points.
What chief executives really want to know, however, is how corporate reputation can grow shareholder value.
Our analysis shows that on average, a 5% improvement in the strength of a corporate reputation of an S&P500 company can be expected to deliver an increase in market capitalization of close to 3%.
Furthermore, a better reputation will also increase the investment community's confidence in a company's ability to deliver the returns it promises.
The bottom line is that investment in building corporate reputation pays dividends and investment in understanding which particular components of reputation offer the greatest returns will enable companies to maximize them.
In the early days of corporate social responsibility (CSR), it was enough to plant a few trees and attend the odd ribbon-cutting junket or photo opportunity. Companies could continue to support lax labour practices, and make few - if any - inquiries into the environmental conduct of their suppliers. So long as profits rolled in, customers - and shareholders - were satisfied. CSR-associated activities were seen as 'bolt-on', rather than critical to business. Indeed, our research shows that in 2000, only 11% of CEO's believed CSR to be integral to improving commercial success. Occasional CSR activity was enough, in a world where sustainable practices were seen as just another PR-related function.
Fast-forward to 2010: Global media attention has skyrocketed, trust and reputation are directly linked to sustainable practices, and both have an immediate, measurable impact on the bottom line. Clearly, the days of superficial 'greenwashing' are behind us, as evidenced by Echo's recent study 'A World in Trust,' analysing trends and practices in global CSR.
Working with the International Business Leaders Forum (IBLF), Echo's survey of over 50 global business leaders included Diageo's Paul Walsh, Coca-Cola's John Brock, and Whitbread's Alan Parker CBE among others, to analyse the latest thinking and insights in CSR. The qualitative data was complemented by business media content collected by media search engine Echo Sonar, and then scrutinised by Echo's analysts.
Our findings tell the story of a shifting landscape. Stakeholder research, feedback and co-creation are seen as key elements, while stand-alone CSR departments are in steady decline.
Indeed, an astonishing 96% of those surveyed told us that sustainability efforts needed to be integrated into their respective strategies and operations. Furthermore, 88% believe that businesses should demand similar commitments from suppliers.
This recognition comes at a critical point in time. Following BP's 'summer of the spill' and the more recent - and scarcely less devastating - toxic sludge in Hungary, companies recognise the increased global scrutiny that is upon them.
Importantly, as resources and raw materials are subject to increasing scarcity and price pressure, companies must not only improve conservation, but also drive innovation. An overwhelming 91% of interviewees believed that their companies would need to employ new technologies to address sustainability issues in the next five years in order to remain competitive. This is a clear example of sustainable practices powering business growth, and of these practices playing a greater role in long-term strategy.
Despite the fact that there has been recent doubt as to the business value of CSR, 69% of those surveyed believed that companies dedicated to long-term sustainability would see better financial results. Indeed, many organisations are holding fast in their commitment to sustainability as a business imperative, despite the decelerating effect of the recession.
The challenge is clear, the rewards evident: those companies that best integrate CSR into overall business practices will reap the rewards born of increased consumer confidence. Indeed, it was one of our interviewees who put it best, tying business and CSR together, as he said "Sustainability is conducting your business in such a way that future generations can do the same".