Does online reputation exist three answers and more questions d+i ll&c

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Does online reputation exist? Three answers and more questions

Madrid, April 17, 2012

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Título que describe el principal valor empresarial obtenido con la solución (1-‐3 lín.)

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1. HOW TO EVALUATE THE IMPACT TO OFLINE COMMENTS 2. IS THERE “ONLINE REPUTATION”? 3. CAN REPUTATION ON THE INTERNET BE MEASURED? 4. IS IT POSSIBLE TO MANAGE REPUTATION IN THE SOCIAL NETWORKS? DOCUMENT PREPARED BY CORPORATE EXCELLENCE LLORENTE & CUENCA

1. HOW TO EVALUATE THE IMPACT OF ONLINE COMMENTS Over the last five years, Llorente & Cuenca has been conducting an ambitious research project aiming to understand the impact of online communication on the reputation of companies. To this end, we closely cooperated with our clients and managed to clarify some areas that often become an object of a heated debate in academic and research institutions: Is there “online” reputation? Can it be measured effectively? Can it be managed? These are some of the questions that we can answer, with the answers serving as the basis for the BEO (Analysis of Online Comments, Balance de Expresiones Online) methodology. Other questions remain unanswered and are currently investigated jointly by Corporate Excellence – Centre for Reputation Leadership and Llorente & Cuenca in order to make progress in the understanding of the Internet as a source of corporate reputation.

HOW TO MEASURE REPUTATION ONLINE? THREE ANSWERS AND MORE QUESTIONS


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2. IS THERE “ONLINE” REPUTATION? Expansion of the so-called Web 2.0 has turned online media and social networks into an important communication environment, where millions of persons and organisations interact every day. It seems obvious that the content and experiences shared in the digital spaces such as Facebook, Twitter or blogs should affect perceptions, evaluation and expectations formed by the stakeholders of companies. But what does it mean? Should we consider these factors separately? Are there two kinds of reputation: online and offline? The term “online reputation” has become an object of discussion and commercial interest in the last few years. The term clearly expresses two key elements that worry and interest professionals: “reputation” and “the Internet”.

The problem is that it does not explain the relationship between these elements, which leads to the misunderstanding that there is a separate “online” reputation, i.e. perceptions, evaluations and expectations existing exclusively in the web and independent from other factors. First answer: The Circle of Reputation Sources This conceptual confusion was one of the first challenges that Llorente & Cuenca faced in our research. Our answer is in the “Circle of Reputation Sources”. The graph attempts to explain that the company’s reputation does not exist on the Internet. Instead, it exists in the minds of the people who are the company’s stakeholders. Reputation is the combination of perceptions, the basis of expectations and attitudes. Corporate Excellence – Centre for Reputation Leadership defines


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corporate reputation as the combination of collective evaluations developed by a stakeholder about a company, that drive value-generating behaviours. The same graph explains that what we see on the Internet are comments about a company shared by its stakeholders on the web, and that they may affect the perceptions of this company. In other words, in the term “online reputation”, “online” is the cause or the source, and “reputation” is the effect or the result. The graph also clearly expresses the central phenomenon in the process of building reputation: • On the one hand,

experiences of the persons who constitute stakeholder groups during their direct interaction with the company; they represent the most influential source of comments for the perceptions and evaluations of the stakeholders.

• On the other hand, the reality of the company itself (the result of its identity, activity and culture) are at the heart of everything and determine the experiences and comments of the stakeholders.

Besides, the “Circle of Reputation Sources” attempts to contribute to the research aiming to solve the main issue: first, to overcome the increasingly virtual boundaries between the “on” and “off” in the analysis of comments; and secondly, identify the environment or spaces most commonly used for posting comments on the Internet. In this sense, we singled out four kinds of important comments: • Observation: largely visual

messages that may generate essentially emotional perceptions that may be managed by means of design and advertising in the traditional channels of communication; or by means of sequential or wall posts in the multimedia networks (Youtube, Pinterest, etc.).

• Information: informative comments on actions that may generate simple cognitive perceptions and may be managed with the help of journalistic techniques in the conventional channels of communication, or by means of real-time social networks (such as Twitter).

• Conversation: comments

made in the dialogues, mostly the ones expressing an opinion, that may affect motivational perceptions. These usually may be managed with the help of events, promotions and public relations activities; now they are also managed through social networks such as Facebook.

“corporate reputation as the

combination of collective evaluations

developed by a stakeholder about a company, that drive

value-generating behaviours.”


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• Documentation: interpretational and informative comments that may develop complex cognitive perceptions. These are traditionally managed through publication of articles and now, also, through hypertextual web formats (websites, media resources, blogs, forums,…), that use Google as the main mediator.

Thus, our response to the question “Is there online reputation?” served as the basis for the methodology applied in the Analysis of Online Comments (BEO), in its two key points: • The analysis unit is a

comment published on the Internet that refers to the corporate brand of a studied company

• The analysis sample is drawn from the most representative environments or platforms based on the four main types of comments found on the Internet: ○ Observation

(multimedia): Youtube ○ Information (real time):

Twitter ○ Conversation (social):

Facebook ○ Documentation

(hypertextual): Google

This analysis led us to new interesting questions that we are still exploring. One of them became part of a further research that is undertaken jointly by Corporate Excellence – Centre for Reputation Leadership

and Llorente & Cuenca in the medium run: • What is the relationship

between comments and perceptions? In practical terms, what is the relationship between the BEO results and the Reptrak™ model developed by the Reputation Institute together with the Forum for Corporate Reputation.

3.CAN REPUTATION ON THE INTERNET BE MEASURED? Growing interest in online reputation has generated a demand for solutions that would allow to measure and evaluate it. In order to meet this demand, new monitoring tools sprouted up on the market that include IT-based analysis of the reputation with the help of semantic filters and sophisticated algorithms that follow all comments made about companies on the Internet, interpret the meaning of these opinions and even estimate the degree of influence that characterisers their authors. If we consider these developments, the answer to the question will be obvious: “The reputation on the Internet can be measured”. However, we do not believe that this question may be answered in this way, or at least in such a categorical manner. As experts on search engines and programming languages well know, computers have serious limitations that cannot be resolved automatically when it

“Growing interest in online reputation

has generated a demand for solutions

that would allow to measure and

evaluate it.”


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comes to evaluation of comments made by people with regard to the reputation. We single out at least three important limitations: • Monitoring capacity: no

search engine, not even Google, is capable of capturing the infinite number of messages that circulate on the web.

• Disclosure of the metrics: the most reliable indicators of influence are not transparent, and are measured with the analytical tools developed privately. Those metrics that are open to public access (such as Klout or Alexa) cannot be applied to all stakeholders of a company.

• Interpretation of the

language: machines are still unable to understand all meanings or feelings implied by a statement made by a human.

Second response: qualitative research Given these limitations, we believe that research on reputation manifested on the Internet cannot be based on quantitative, statistical or mechanical criteria. In this case qualitative methodologies should be applied with non-probabilistic samples and analysis done by people. Thus our response to the limitations that characterise measurements of the online reputation for the Analysis of Online Comments is the following:

• Select a sample of the most relevant comments on companies found by search engines of the main social meeting places online: Google, Twitter, Facebook and Youtube.

• Apply transparent influence metrics offered by applications open for public access and by the communication platforms themselves: number of followers, links, visualisation, number of references, etc.

• Study the comments of the

sample, using the techniques of content analysis. Based on this analysis our researchers will determine the dimensions and attributes of the communicated reputation, the profile of the stakeholders who produce these messages as well as the meaning and feelings denoted or connoted by these messages.

However, we keep looking for new and better measurement solutions. Llorente & Cuenca is cooperating with the Universities of Amsterdam, Glasgow, Trento, UNED and the Barcelona Media Research of Yahoo, within the frames of the European innovations programme LIMOSINE (Linguistically Motivated Semantic Aggregation Engines), aiming to enhance the capacity for information analysis of online comments during this five-years’ research. The results of this process will be reinforced by expert opinions provided by the members of

“LLORENTE & CUENCA is cooperating with the

within the frames of the European

innovations programme LIMOSINE, aiming to

enhance the capacity for information analysis

of online comments”


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Corporate Excellence – Centre for Reputation Leadership. 4. IS IT POSSIBLE TO MANAGE REPUTATION IN THE SOCIAL NETWORKS? The drive to understand and estimate the implications of the Internet on corporate reputation is closely linked to the companies’ desire to manage these implications in connection with the business objectives. Every day we observe new debates and solutions related to ROI of communication in the mass media and social networks, attempting to pinpoint the variables that may be used as levers for increasing the return on investment. This issue is similar to the questions raised by the concept of reputation, when we study the elements that generate intangible value and the way it affects income or capital dynamics in a company. In this context, we can attempt to answer whether it is possible to manage reputation in the social networks. And again, we should do it with a lot of care and precision.

Third answer: the matrix of awareness/recognition In line with the concept of online reputation that we are advocating here, we believe that the environment that can be reached and influenced at the moment rests in what is commonly referred to as “comments”. It is possible to manage the variables that increase the quantity and quality of the comments published in the networks about a certain corporate brand, and the ones that affect perceptions and evaluations (assessment) of a company by the stakeholders. We understand and apply the variables used for the Analysis of Online Comments in the same way: • By figuring out the number

of comments, we are trying to describe the “Awareness” variable, which captures the cognitive component of the reputation and is defined as “presence” or “reach” of relevant comments shared about a company on the Internet. How much it is mentioned or known.

• In order to estimate the quality of comments we suggest the “Recognition” variable that captures the value-related component of reputation and is defined through “authority” and “quality” of the opinions shared about a company on the Internet. How people think about a company and evaluate (assess) it.

“It is possible to manage the variables that

increase the quantity and quality of the

comments published in the networks about a certain

corporate brand”


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By combining the two variables and always taking into account how our object of study is related and compared to other objects, we can develop a positioning matrix that allows us to locate a company, its dimensions, attributes, stakeholders, and the platform where the comment was found in one of the following fields:

1. Efficient (Nt +, Nb +): More references and higher evaluation than the average for analysed sample.

2. Sufficient (Nt-, Nb+): Fewer references and higher evaluation than the average for analysed sample.

3. Insufficient (Nt-, Nb-): Fewer references and lower evaluation than the average for analysed sample.

4. Deficient (Nt+, Nb-): More references and lower evaluation than the average for analysed sample.

Depending on the company’s position in the matrix, its dimensions, attributes, stakeholders and the digital space, we may provide recommendations with regard to key aspects of managing online comments for each particular case: • If deficiency of Awareness is

detected, we know that we need to improve the management of online communication assets, promoting more valuable content among key stakeholders of the company.

• If deficiency of Recognition is detected, we know that we need to improve the management of participation in online communication, establishing more valuable relations with the company’s key stakeholders.

• If deficiency of both variables is detected, the management of both content and relations has to be improved.

Such is our response to the question that we posed earlier. The experience of its application shows that it is a useful management tool. However, we keep refining the tool thanks to everyday cooperation with our clients and the intellectual debate initiated by Corporate Excellence – Centre for Reputation Leadership. New solutions should be developed in order to address additional questions that emerged in the course of the study.


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Autors

Ángel Alloza holds a BA degree in Psychology from the Complutense University in Madrid and a PCD title from IESE. He started his professional career as a Technical Manager for Quantitative and Qualitative Market Research in Alef, Strategic Planning Manager at J.Walter Thompson and Managing Partner at Millward Brown International in Spain and Portugal.

In 1998, Ángel Alloza joined the Strategic Analysis Unit of Argentaria’s Presidency and Risks Area aiming to define and implement the new strategy and brand positioning. In January 2000, he joined the Communication and Image Department of BBVA (now Communication and Brand Department) and was responsible for different areas (corporate advertising, image, social activities, brand, identity, reputation and metrics). Ángel worked at BBVA until 2011 as the Director for Strategy and Evaluation in the global area of Communication and Brand. Ángel’s responsibilities in this function included global management of the brand, the reputation and the metrics. In April 2011, Ángel became the CEO of Corporate Excellence – Centre for Reputation Leadership.

Jorge Cachinero has an MBA from the IE Business School in Madrid and is a graduate in History from the Complutense University of Madrid. He took postgraduate studies in Political Science at St. Antony's College, Oxford University.From 1999 until his appointment at LLORENTE & CUENCA, Jorge held the position of Director of Corporate

and Communication Affairs for Iberia at JT Internacional. Before that he was General Manager for the Public Affairs Practice and a member of the management team for Europe at Burson-Marsteller, Public and Government Affairs Manager for Spain and Portugal at Ford España and Communication and Management Consulting Director at Holmes & Marchant.

Iván Pino has 15 years’ experience of management and consulting in the area of corporate reputation. Iván started his professional career in the CHF association, and later on established the department of communication in this company. For four years he worked as the head of the press service at the Ports of Ferrol and San Cibrao. Then Iván became the director of Imagen, the leading communication

agency in Galicia, Octo, and worked there for nine years. In November 2010, he joined the online communication team of LLORENTE& CUENCA as the Director for Spain.


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New Think Tank for Corporate Brand and Reputation The major Spanish Corporations have joined together to launch a centre of excellence named “Corporate Excellence - Centre for Reputation Leadership”, a think tank to promote corporate brand and reputation management as a strategic driver for business excellence. Our Trustees (BBVA, La Caixa, Iberdrola, Repsol, Santander and Telefónica) represent 65% of the IBEX-35 (250 million of euros in stock market capitalization). Also, relevant public and private corporations have joined this initiative including Adif, Agbar, Bankinter, Correos, Danone, El Corte Inglés, Gas Natural Fenosa, Meliá Hotels International and Renfe. This group of companies has more than 750.000 employees in 82 countries. Our vision The Centre aims to become an international technical and ethical point of reference to help companies achieve excellence and to lead the defense and strengthening of the integrated management of intangible assets through six areas: reputation, brand, communication, public affairs, metrics and training. Our Goals ● To consolidate brand and reputation management as a strategic driver to achieve business excellence. ● To show the financial return on the company's intangible assets. ● Creation of strategic alliances in order to support the relevance of reputation, as an essential element of

business management. Ten years of experience Corporate Excellence- Centre for reputation Leadership, is the result of experience obtained over the last decade by the “Foro de Reputación Corporativa” (founded in 2002) and the “Instituto de Análisis de Intangibles” (founded in 2004), both now part of this new think tank. www.corporateexcellence.org blog.corporateexcellence.org Tel.: +34 91 445 18 18 [email protected] Sagasta, 27, 3º izq. B 28004 Madrid –España–


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Consultoría de Comunicación líder en España y América Latina LLORENTE & CUENCA is the leading communications consultancy firm in Spain and Latin America. It has twelve partnersand 300 professionals who provide strategic consultancy services to companies in all sectors, with operations aimed at the Spanish- and Portuguese-speaking world. The firm currently has its own offices in Argentina , Brazil, Colombia, China, Ecuador, Spain, Mexico, Panama,Peru, Portugal and the Dominican Republic. It also offers its services through affiliate companies in the United States, Chile, Bolivia, Uruguay and Venezuela. Its progress on the international front led the firm to become one of the fifty most important communication companies in the world in 2010 and 2011, as reflected in the global ranking published by The Holmes Report. Organización

DIRECCIÓN CORPORATIVA José Antonio Llorente Socio Fundador y Presidente [email protected] Enrique González Socio y CFO [email protected] Jorge Cachinero Senior Director [email protected] ESPAÑA Madrid Arturo Pinedo Partner and Senior [email protected] Juan Rivera Partner and Senior [email protected] Adolfo Corujo Partner and Senior [email protected] Joan Navarro Vice-Pesidente and Senior Director of Public [email protected] Amalio Moratalla Director Senior [email protected] Juan Castillero Finantial Director [email protected] Hermanos Bécquer, 4 28006 Madrid (España) Tel: +34 91 563 77 22 Barcelona María Cura Managing Director Barcelona [email protected] Muntaner, 240-242, 1º-1ª 08021 Barcelona (España) Tel: +34 93 217 22 17 PORTUGAL Lisboa Madalena Martins Founding Member [email protected] Carlos Matos Founding Member [email protected] Rua do Fetal, 18 2714-504 S. Pedro de Sintra - Portugal Tel: + 351 21 923 97 00

Quito Gonzalo Ponce Partner and CEO [email protected] Avda. 12 de Octubre 1830 y Cordero. Edificio World Trade Center, Torre B, piso 11. Oficinas 1104-1105 Distrito Metropolitano de Quito (Ecuador) Tel: +593 2 2565820 Río de Janeiro Germán Pariente Partner and CEO [email protected] Rua da Assembleia, 10 – sala 1801 Rio de Janeiro – RJ (Brasil) Tel: +55 21 3797 6400 Santo Domingo Alexander Barrios General Manager [email protected] Avda. Abraham Lincoln. Torre Ejecutiva Sonora, planta 7 Santo Domingo (República Dominicana) Tel: +1 8096161975 ASIA Beijing Sergi Torrents General Manager [email protected] 2009 Tower A, Ocean Express N2 Dong san Huan Bei Road, Chaoyang District. Beijing (China) Tel: +86 10 5286 0338 PRESENCIA EN LA RED Corporate website www.llorenteycuenca.com Corporative blog www.elblogdellorenteycuenca.com Facebook www.facebook.com/llorenteycuenca Twitter http://twitter.com/llorenteycuenca LinkedIn www.linkedin.com/groups?mostPopular=&gid=144360 YouTube www.youtube.com/LLORENTEYCUENCA Delicious www.delicious.com/LLORENTEYCUENCA Slideshare www.slideshare.net/LLORENTEYCUENCA

AMÉRICA LATINA Alejandro Romero Partner, Latin America CEO and General Manager Mexico [email protected] José Luis Di Girolamo Partner and CFO Latin America [email protected] Antonio Lois Regional Director of Human Resources [email protected] Bogotá Claudia Esguerra General Manager [email protected] Carrera 14, nº 94-44. Torre B – Oficina 501 Bogotá (Colombia) Tel: +57 1 7438000 Buenos Aires Pablo Abiad General Manager [email protected] Enrique Morad Council President for the Southern ConeDeshacer [email protected] Av. Corrientes 222, piso 8 C1043AAP Ciudad de Buenos Aires (Argentina) Tel: +54 11 5556 0700 Lima Luisa García Partner, COO and CEO Latin America Peru [email protected] Av. Andrés Reyes, 420, piso 7 San Isidro, Lima (Perú) Tel: +51 1 2229491 México Alejandro Romero Partner, CEO and General Manager Latin America [email protected] Bosque de Radiatas, 22 – PH7 Col. Bosques las Lomas. Cuajimalpa de Morelos. C.P. 05120 (México) Tel: +52 55 52571084 Panamá Javier Rosado General Manager [email protected] Avda. Samuel Lewis. Edificio Omega, piso 6, Oficina 6ª. Panamá (Panamá) Tel: +507 263 9899


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Does online reputation exist three answers and more questions d+i ll&c

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