From the June 2012 issue of Treasury & Risk magazine

Media Monitoring's Role In Managing Reputation Risk

More companies turn to services that track what is being said about them.

Social media efforts can come back to haunt a company. Earlier this year, McDonald’s launched a campaign to promote the quality of its ingredients, using the Twitter hashtag #McDStories, only to see the clickable link hijacked by animal rights activists and other critics of the company. McDonald’s ended up pulling the hashtag.

As businesses shepherd their brands in an increasingly volatile media environment, more are turning to services that track what is being said about them.

Companies need help in this area, says Anthony Johndrow, managing partner at the Reputation Institute, a global consultancy. “In the past, public and private companies managed their reputation by staying out of the limelight, but we have moved to a reputation-based economy now that most products and services are commodities,” says Johndrow, pictured at right. “It is a company’s reputation that matters.”

Global exchange operator Nasdaq OMX recently launched a service that helps monitor and manage companies reputation. It joins an already crowded marketplace, including offerings such as the Factiva media-monitoring services.

Nasdaq’s service, Media Intelligence, provides real-time monitoring and evaluation of print, online, broadcast and social media mentioning a company’s brand. It tracks more than 50,000 online news outlets, 3 million social media sources and 1,000 broadcast and print outlets in more than 80 countries, and uses a technique called advanced natural language processes to analyze the tone of references to the company.

Nasdaq’s platform also allows Twitter users to engage directly with influential social media individuals, as identified by online analytics tools such Klout.

For companies seeking metrics to measure their reputation capital, Johndrow suggests tracking the performance of intangible assets, found by subtracting the company’s book value from its market capitalization.

The difference “is the value of the company’s intangible assets,” he explains. “It might include assets like intellectual property, but a company’s reputation accounts for quite a bit of it.”

By measuring the change between the two values and comparing it with competitors’ values, a firm can turn an ethereal concept like a reputation into a measurable and manageable performance metric, Johndrow says.



To read about insurance against reputation risk, see Guarding Reputations.



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