Your Bottom Line is Showing: Why reputation management matters to Investor Relations

Your Bottom Line is ShowingWhy reputation management matters to Investor Relations

Carolyn McGill-DavidsonPresident & CEOCNW Group

Reputation

Reputation is the degree of trust, admiration,

esteem and good feeling that stakeholders

have for a company.

- The Reputation Institute

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Reputation

Reputation and your bottom line

• Reputation capital constitutes up to 63% of the average

company's market value

• On average, 20% of a company’s sales can be explained by

reputation

The web has changed everything

• Consumer behavior

• News creation – The New Newsroom

• The investment community

• Investor decision making

How often do you use social media outlets to research products and services before making a purchase?

At least Occasionally 61%

• Because users find social media to be believable, it is not surprising that they choose to use this venue as a source of information about products and services before making a purchase decision. Three-fifths do so at least occasionally and three-in-ten do so most of the time.

• Regionally, Quebecers are more likely to use social media for research at least occasionally (71%).

Base: Users n=1516

Users are Turning to Social Media for Researching Purchases

Social media reaches mass adoption

Source: North American Technographics® Interactive Marketing Online Survey, Q2 2009 (US), North American Technographics Media And Marketing Online Survey, Q2 2008, and North American Social Technographics Online Survey, Q2 2007. Forresters Research, Inc.

Base: US online adults

The Past

The New Newsroom

The web has changed the newsroom

There are no deadlines anymore. The concept of a

deadline is something that was oh, so six months

ago. The deadline is now.

David Akin, National Affairs correspondent, Canwest News

Service (currently Sun Media National Bureau Chief, Ottawa)

“”

The web has changed the newsroom

You can’t sit back and relax. The deadline is now

and now and now and now. And it’s a constantly

evolving story.

Scott Anderson, Editor-in-Chief, Canwest News Services

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The web has changed the newsroom

The metabolism of media has been sped up to the

point where you don’t have hours to respond. You

have minutes. Things can go from molehills to

mountains instantaneously.

Mathew Ingram, senior writer

GigaOm blog network.

“”

Investors can no longer be considered just stock

buyers. They are consumers and business buyers – of

technology, energy products and everything else that a

company sells – and probably great communicators

when they buy something they like. They rely on media

as a primary source of information to guide their

purchase, whether it is a position in a company or the

widget that a company products.

Miri Segal & Henry Feintuch, IR Alert

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Institutional investors take the time to troll around

social media outlets and in many cases might

prefer to get the sort of raw opinion of somebody

inside a company who may be writing something

on Facebook or posting something to a message

board because it’s unfiltered.

Lorne Gorber, Vice President, Global Communications and

Investor Relations, CGI

“

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Social media is blurring the lines of IR & PR

The new

reality

On the web, good news spreads fast. Bad news spreads faster.

Motrin Moms

• On November 16, 2008 a blogger offended by a controversial

online video promoting Motrin for mothers set off a wave of online

discussions

• Within two hours of the post, anti-Motrin comments were the most

popular topic on Twitter

• Less than 24 hours later, Motrin pulled the ad from its website and

posted an apology from their VP of Marketing

Today, many business leaders are again asking

the wrong question: ‘What will social media do for

us?’ instead of ‘What will social media do to us?’

Augie Ray, Senior Analyst of Social Computing, Forrester

Research

“”

In today’s environment, markets react quickly to both

positive and negative news, and public companies

need to be in a position to respond quickly. Time was,

companies were only concerned about a 24-hour news

clock and responding by the end of the day. In today’s

environment, an accurate statement is required as

soon as possible – with regular updates – in order to

stay on top of the story.

Frank Switzer, Sun Life Financial

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We are aware of the potential impact on our reputation

from tweets and blogs, both positively and negatively.

We monitor all mentions of Sun Life and bring any

issues to the right place in the organization, while being

mindful of the confidentiality of our clients’ business.

Frank Switzer, Sun Life Financial

“

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Solutions to reputation risk start with locating existing

risks for the business and then understanding the

impact on reputation if these risks occurred. An early

warning system that identifies and possibly prevents

potential problems as well as communications and

contingency plan are the most effective ways of

addressing reputation risk.

AON Global Risk Management Survey, 2009

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Reputation Management

An effective reputation management program enables

business leaders to:

•Have real-time access to information and conversations

•Respond quickly and confidently to negative reports propagated

anywhere

•Assess shareholders, customers, partners and other stakeholders

to determine levels of satisfaction, investor sentiment and matters

requiring improvement;

•Anticipate best and worst case scenarios

•Plan, develop and adjust strategies

I think companies should be monitoring and should

be aware of what’s being said about them, because

a lot of the time you can shut down a rumour very

quickly if it is, in fact, not true, or at least deal with it

in a relatively timely manner. The broader story of

what social media is going to mean to businesses.

Andrew Willis, The Globe and Mail

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Your reputation is who you are. Perception to the

external world is reality. So it’s one to manage, or

to monitor, what is being said about you. It’s

another thing to take that information and to do

something with it, to act proactively.

Bryan Tucker, Media Relations,

Rio Tinto Alcan

“

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Any good communications professional who’s at a company

and seeing what people are saying about them on Twitter or

Facebook should be able to see where the stories are going,

should be able to get one step ahead, get the talking points

ready, sit the CEO down, tell him to shut up, whatever needs to

be done. I think that yes, you need to be there as a

communications person in a company and you need to be

paying attention because you can see where the media is

going to be a few steps ahead.

Boyd Erman, The Globe and Mail

“

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The new reality of reputation management

Seven things your company can do

• Be proactive

• Improve customer support

• Listen

• Participate

• Respond

• Move faster

• Realize everyone is a marketer

Augie Ray, Forrester Research

Resources

• ‘Safeguarding Reputation’ – Webber Shandwick

• Millward Brown’s Corporate Reputation Study, January 2007

• AON Risk Management Survey, 2009

• Social Media Reality Check

• North American Technographics Interactive Marketing Online

Survey, Forrester Research

• Break Down the Walls: The Advantages of True IR & PR

Integration, Miri Segal & Henry Feintuch, May 10, 2010

• Motrin Moms Backlash by the Numbers, Web Strategy by

Jeremiah

• Seven Things Your Organization Must Do Because of Social

Media, Augie Ray, Forrester Research Blog