The Fail Trail: Analyzing the impact

of a PR Crisis

Introduction

Crisis Management Theory– Proactive Reputation Monitoring

• Looking to understand the significance of, and if actively listening can decrease the severity of a crisis

– Proactive Reputation Management • Understanding if a brands initial reputation can decrease severity of

crisis – Proactive Reputation Response

• Determining if a follow-up response and action affects the opinion of the brand during a crisis

• Search Setup • Identified three global brands• Historical data over 6 month period• Each a different example of a crisis• All well known PR disasters

• Example of crisis: Employees “Caught in Act”• Employees post video on YouTube of health violations.• Domino’s responded with apology video and legal actions against employees.• We set up historical social search to go back and look at data from 1/16/2009 to 7/16/2009. That is 3 

months prior to the crisis and 3 months following.

Domino’s

• Example of crisis: “Bad Customer Service”• United breaks Passengers guitar and doesn’t pay for it.• Musician’s song about it goes viral.• We went back and looked at conversations from 4/06/2009 to 10/06/2009.

United

• Example of crisis: “Brand Hijacking”• Nestle tries to censor campaign against them regarding deforestation.• Facebook page gets taken over with negative posts.• We went back and looked at conversations from 4/06/2009 to 10/06/2009.

Nestle

Overall Analysis

Net Positive SentimentDominos United Nestle

7.56% 6.93% 24.89%10.94% 0.00% 14.57%13.37% -4.07% 18.42%5.64% -0.97% 17.14%

17.29% 1.07% 12.63%3.28% 4.44% 18.85%

13.27% 4.80% 19.75%-0.28% 4.61% 17.77%12.30% 2.03% 26.43%13.02% -0.75% 20.51%10.08% 2.73% 18.60%13.43% -0.57% 24.34%

-16.72% -9.02% 21.51%-6.80% -9.78% -11.24%10.00% -5.54% 1.78%2.87% -11.51% 13.01%7.78% -7.88% 18.72%

12.24% 1.16% 11.97%12.80% 4.09% 20.60%17.70% -5.91% 19.92%17.28% 0.00% 22.04%11.61% 0.79% 15.47%8.87% 1.02% 15.25%

11.55% 1.44% 16.27%16.29% 52.39% 21.66%18.10% 7.54% 18.38%

Average Net Positive Pre-CrisisDominos PC Average

United PC Average

Nestle PC Average

9.99% 1.69% 19.49%

• Net positive sentiment percentage is defined as the percentage of positive conversations minus the percentage of negative conversations.

• Prior to the crisis, Nestle had the greater average percentage of overall positive conversations while United had the fewest.

• Each crisis happened at week 13 and took four to six weeks to return to the pre-crisis average.

Domino’s Analysis

Dominios DFA

-2.43%0.95%3.38%

-4.35%7.30%

-6.71%3.28%

-10.27%2.31%3.03%0.09%3.44%

-26.71%-16.79%

0.01%-7.12%-2.21%2.25%2.81%7.71%7.29%1.62%

-1.12%1.56%6.30%8.11%

Dominos Average

9.99%9.99%9.99%9.99%9.99%9.99%9.99%9.99%9.99%9.99%9.99%9.99%

-0.58%-0.58%-0.58%-0.58%-0.58%14.05%14.05%14.05%14.05%14.05%14.05%14.05%14.05%14.05%

• There was a large spike in the distance from average when the crisis immediately occurred.

• Post-crisis, Domino’s average positive sentiment actually increased from 9.99% (prior to the crisis) to 14.05%. This could be attributed to what experts called immediate response to the crisis and the video apology they issued.

United Analysis

• The plunge in sentiment when the crisis occurred wasn’t as drastic as the other brands. This could be due to the already low sentiment surrounding the United Brand.

• Following the crisis the average positive sentiment was actually greater than it was prior as well. This is due to the giant spike in conversations towards the end of our 6 month search range, around a Starbuck gift card giveaway on all domestic flights on United.

United DFA

5.24%-1.69%-5.76%-2.66%-0.62%2.75%3.11%2.92%0.34%

-2.44%1.04%

-2.26%-10.71%-11.47%-7.23%

-13.20%-9.57%-0.53%2.40%

-7.60%-1.69%-0.90%-0.67%-0.25%50.70%5.85%

United Average

1.69%1.69%1.69%1.69%1.69%1.69%1.69%1.69%1.69%1.69%1.69%1.69%

-7.38%-7.38%-7.38%-7.38%-7.38%-7.38%6.95%6.95%6.95%6.95%6.95%6.95%6.95%6.95%

Nestle Analysis

• Nestle had the greatest drop in positive sentiment from the average at the time of the crisis. Fittingly, Nestle also had the highest overall positive sentiment and thus the “furthest to fall.”

• After the crisis Nestle’s brand returned to nearly the same average as it was prior to the crisis. The difference could be attributed to the lasting affect that the crisis had on some brand supporters.

‐15.00%

‐10.00%

‐5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Nestle

Nestle PC Average

4 per. Mov. Avg. (Nestle)

Nestle DFA

5.40%-4.92%-1.07%-2.35%-6.86%-0.64%0.26%

-1.72%6.94%1.02%

-0.89%4.85%2.02%

-30.73%-17.71%-6.48%-0.77%-7.52%1.11%0.43%2.55%

-4.02%-4.24%-3.22%2.17%

-1.11%

Nestle Average

19.49%19.49%19.49%19.49%19.49%19.49%19.49%19.49%19.49%19.49%19.49%19.49%9.29%9.29%9.29%9.29%9.29%9.29%

17.95%17.95%17.95%17.95%17.95%17.95%17.95%17.95%

Domino’s vs. Nestle Analysis

• Nestle and Domino’s are very similar in their sentiment pattern.

• Possible reasons could be that they are both in the food industry and have a positive average sentiment prior to the crisis.

• United has a more stable, but lower sentiment percentage, thus the percentage doesn’t move as much when a crisis occurs.

Insights

• Monitoring– If a brand is monitoring the conversations surrounding sentiment, they may be

more likely to take action on a crisis in a positive manner by learning from experiences.

– An example is United defending their customer service and increasing positive sentiment by issuing Starbucks gift cards on flights.

• Management– It seems as though a brand’s initial reputation and average sentiment does have

an effect on the crisis, but in an inverted fashion.– Both Nestle and United had a greater positive sentiment and dropped further.

United, on the other hand, didn’t drop as much during the crisis because people expected this from the brand.

• Response– Initial response is not necessarily a good thing, and interaction can influence an

audience’s perception of the brand.– An example is Nestle and how they attempted to defuse a growing social

situation by censoring content and going back and forth with commenters on their Facebook page. This is not an ideal way to respond to a crisis.

Future Analysis

Areas for Future Investigation:– Does the brand’s industry affect the impact of the crisis (similar patterns with

Domino's and Nestle)? – Does the public’s sentiment about a brand *before* a crisis affect the negative

impact of a PR Crisis? – Can a brand’s response lessen the long term impact of a PR Crisis?

THANK YOU!

Please contact us with any questions

Steve True: steve.true@alterian.com

@steventrue

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