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Media still key to corporate reputation

By Wright Communications - 25 May 2017
Social media is all the rage, but new research shows traditional media is as important as ever for an organisation’s reputation.

According to leading market research firm Colmar Brunton, organisations with strong corporate reputations get about four times as much positive media coverage as companies with weak reputations.

As part of its Public Sector Reputation Index, Colmar Brunton compared the media coverage of organisations with strong reputations (a 'Rep Z' score of 105 or over) to those of average reputations (between 95 and 105) and weak reputations (95 and below).

Coverage disparity

For those with strong reputations, more than half of all media coverage (60%) was positive, while only 7% was solely negative (32% was both positive and negative).

Organisations with average reputations also had more positive coverage (45%) than negative (13%), with a further 42% being a mixture of both.

However, those with negative reputations received almost three times more negative coverage (41%) than positive coverage (15%).

It is no surprise that positive media coverage is linked to having a strong reputation, but this research highlights just how important it is.

It also suggests negative headlines have a stronger effect than positive ones, given the disparity in coverage between organisations with average and weak reputations.

Here are some tips to help you navigate the media minefield, with local and international case studies:

Your reaction matters

No matter how hard you try, if you are in business you will probably have a crisis or major issue at some point.

What really affects your reputation in the long term is not the event itself, but the way your business or organisation deals with it. Good communication is crucial but there is no substitute for action; as they say, 'actions speak louder than words'.

Just look at the outrage over the recent incident where a United Airlines customer was literally dragged kicking and screaming off a flight.

United compounded its stuff-up by failing to accept responsibility and appearing to blame the passenger for his predicament.

This ensured the negative media coverage kept going for days, giving social media magicians ample time to come up with 'memes' mocking the airline.

In contrast, Air New Zealand was praised for its response to the fatal crash of a test flight in France in 2008.

To come out of such a tragedy with its reputation intact, and even enhanced, is a testament to the company's ability to deal with a crisis.

The rules are different

Private sector businesses are treated differently than public sector organisations or not-for-profit charities, with different things to watch out for in terms of media coverage and public perception.

For private businesses, customer service is paramount when it comes to reputation. For public sector organisations, stewardship of public money is what tends to get the headlines.

Just look at the controversy Ministry of Business, Innovation and Employment (MBIE) faced in 2015 after it spent $140,000 on a screen and $67,000 on a sign at its flash new office.

This added up to about three minutes of Government spending, but it was the appearance of extravagance and waste that was the problem.

For publicly listed companies, being up-front is key. Fletcher Building recently faced tough questions from investors after it warned its profit could be up to $150 million lower than what it had forecast only one month earlier.

The profit downgrade, due to cost blowouts at two of its major projects, completely overshadowed what is expected to be a profit of more than $600 million for the year.

Sometimes it's not worth it

Every major action a company takes needs to be judged not only in terms of the financial impact, but also the potential impact on the company's reputation.

During last year's Olympic Games in Rio, Sky Television went to court to try to stop Fairfax Media using clips of Sky's Olympic coverage on the Stuff.co.nz website. Fairfax was supported by other media including TVNZ and NZME.

Not only did Sky Television fail in court, it also lost in the court of public opinion, with many Kiwis annoyed by its actions.

Sky Television obviously felt morally justified in taking the case, but in hindsight this was an issue where the negatives outweighed any potential benefits if it had indeed won.

It was also a handy reminder that it is not a good idea to make enemies of the media!

 

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