Burson-Marsteller Digital Crisis Communications Study

REPUTATION IN THE CLOUD ERA
DIGITAL CRISIS COMMUNICATIONS STUDY

2011.08.02

EVERYTHING THAT FAMOUSLY GOES WRONG
IS NOW CALLED A ‘PR DISASTER’
 BP’s oil spill
 Toyota’s recalls
 Tiger Woods’ spectacle
 News Corporation’s hacking scandal

METHODOLOGY
 PSB conducted a total 826 online and Region Method
Sample Margin
size of error
face to face interviews globally
amongst business decision makers in
May and June 2011 EU
UK, France,
Online 204 +/-6.8%
Germany, Italy,
 Business decision makers are defined Spain
as respondents who:
 Aged over 25,
 Full time or self employed/business US Online 251 +/-6.2%
owner
 Have an active interest in business and
current affairs issues, APAC Mix of
Japan, India, online and
 Have final or significant decision making China, Korea, face to
201 +/-7.5%
power in their business. Indonesia face

 Overall, half the respondents were from LatAm Mix of
large enterprise businesses and half Mexico, Brazil, online and
170 +/-6.9%
were from SME businesses Chile, Argentina, face to
Colombia face
 Data has been weighted to reflect
GDPs of each region

©BURSON -MARSTELLER , LLC | ©PENN, SCHOEN & BERLAND
2
ASSOCIATES

OBJECTIVES

To understand how crisis is
To explore the extent and need
experienced – how common
for crisis plans
and what types

To understand crisis
To examine how companies
preparation in the context of
approach crisis management
growing impact of social and
planning
digital media

3
ASSOCIATES

CRISIS IS AN ORDINARY
PART OF BUSINESS

4
ASSOCIATES

59% OF BUSINESS LEADERS HAVE EXPERIENCED A
CRISIS IN THEIR CURRENT OR PREVIOUS COMPANY
Q39/40(combined): Has your company experienced a crisis while you’ve been working there?
Has a company you worked for previously experienced a crisis?

66%
41% OF ENTERPRISES
HAVE EXPERIENCED
HAVE NOT
EXPERIENCED A 59% A CRISIS
vs.
CRISIS HAVE
EXPERIENCED
A CRISIS 53%
OF SMES

5
ASSOCIATES

APAC BUSINESS LEADERS ARE MORE LIKELY TO HAVE
EXPERIENCED A CRISIS, WHILE LATAM ARE LEAST LIKELY
Q39/40(combined): Has your company experienced a crisis while you’ve been
working there? Has a company you worked for previously experienced a crisis?

67% 68%
61% 64%
59% 59%
APAC

55%

MANUFACTURING
53%
EU

TECHNOLOGY
GLOBAL

46% 46%

GLOBAL
US

SERVICE
LATAM

HEALTHCARE
Have experienced a crisis Have experienced a crisis

6 ©BURSON-MARSTELLER , LLC | ©PENN, SCHOEN & BERLAND ASSOCIATES

CONTROVERSIAL COMPANY DEVELOPMENTS ARE
THE MOST COMMON CRISIS ENCOUNTERED
Q44: What sort of crisis did your company encounter?
(Among those who experienced a crisis)

Controversial company developments (e.g. lay offs) 31%

Logistic difficulties (e.g. problems with transport/delivery) 20%
Danger to product safety (e.g. defective or contaminated
parts) 19%

Technical accidents (e.g. natural disaster or explosion) 18%

Online or digital security failure 16%
Critical or negative new media campaigns (e.g. criticism
over social media) 16%

Intense political scrutiny of your company 12%

Intense regulatory scrutiny of your company 10%

Criminal actions (e.g. bomb attack or fire) 9%
Global
7
ASSOCIATES

COST OF EXPERIENCING A CRISIS
Q151: Approximately, how much did the crisis cost your company?
(Among those who have experienced a crisis)

Crisis cost 23% Global
More than half more than
a million GBP
31% Large Enterprises
half a million
pounds 14% SMEs

Crisis cost up 60%
to half a
Up to half a million GBP
51%
million
pounds 69%

10%
CrisisCrisis cost
cost nothing
10%
nothing
11%

8
ASSOCIATES

DROP IN REVENUE AND CUT-BACKS/LAY-OFFS MOST
COMMON IMPACTS OF CRISIS
Q150: You said you company has experienced a crisis. What was the impact on your company from the
crisis? (Amongst those who experienced a crisis)

Drop in revenue 32%
Cut-backs and/ or lay-offs 24%
Loss of corporate reputation 18%
Global
Destabilisation of the entire company 18%
Loss of public trust 17%
Increased regulatory scrutiny 13%
A drop in share prices 13%
Increased scrutiny from new media 12%
Law suits from individuals or groups 11%
Increased political scrutiny 10%
Extensive fines 10%
Inconsistent statements were made to the media 9%
Loss of media trust 8%
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ASSOCIATES

79% ARE ONLY 12 MONTHS FROM A POTENTIAL CRISIS –
HALF THINK THIS WILL HAPPEN IN THE DIGITAL SPACE
Q29-37: How likely do you think it is that your company will experience any of the
following potential crisis in the next 6-12 months?
(Top 2 Very + Somewhat likely to experience this type of crisis)

Global

Controversial company developments 50%

21% Online or digital security failure

Logistic difficulties
47%

47%

79% Intense regulatory scrutiny of your product or
company
45%

Critical or negative new media campaigns 43%

Danger to product safety 42%
Technical accidents 40%
Intense political scrutiny of your product or
40%
company
Likely to experience a potential crisis Criminal actions 33%

Not likely to experience a potential crisis

10
ASSOCIATES

PRODUCT SAFETY AND ONLINE SECURITY FAILURE
SEEN TO HAVE HIGHEST IMPACT ON REPUTATION
Q27: Which of the following potential situations do you think would impact the
reputation of your company most?

Danger to product safety (e.g. defective or contaminated
parts) 40%

Online or digital security failure 35%

Technical accidents (e.g. natural disaster or explosion) 31%
Critical or negative new media campaigns (e.g. criticism
over social media) 30%

Criminal actions (e.g. bomb attack or fire) 28%

Controversial company developments (e.g. lay offs) 23%

Logistic difficulties (e.g. problems with transport/delivery) 21%

Intense regulatory scrutiny of your company 20%

Intense political scrutiny of your company 16%
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ASSOCIATES

APAC ARE MORE CONCERNED ABOUT PRODUCT SAFETY
WHILE LATAM WORRY ABOUT TECHNICAL ACCIDENTS
Q29-37: How likely do you think it is that your company will experience each of
the following in the next 6-12 months? (Top 2 Very + Somewhat likely to
experience this type of crisis)

53% 54% 47%
42% 43% 41% 40%
APAC

LATAM

APAC
36%
33%
LATAM

32%
GLOBAL

EU

GLOBAL

EU

US
US

Danger to product safety Technical accidents (e.g. natural disaster and
explosion)

12
ASSOCIATES

COMPANIES ARE NOT
PLANNING SUFFICIENTLY

13
ASSOCIATES

ONLY HALF OF COMPANIES HAVE A CRISIS PLAN

Q97: Does your current company have a crisis management plan?

54% 46%
HAVE A DO NOT
PLAN HAVE A
PLAN

14
ASSOCIATES

APAC COMPANIES AND THOSE IN MANUFACTURING OR
TECHNOLOGY ARE MORE LIKELY TO HAVE PLANS
Q97: Does your current company have a crisis management plan?

64%
62% 62%
54% 55%
APAC

51% 54%

MANUFACTURING

TECHNOLOGY
US
GLOBAL

47%
EU

GLOBAL
35%

SERVICE
29%

HEALTHCARE
LATAM

Has a crisis plan Has a crisis plan

15 © B U R S O N - M A R S T E L L E R , L L C | © P E N N , S C H O E N &
BERLAND ASSOCIATES

INDIFFERENCE AND COST ARE KEY BARRIERS TO
DEVELOPING A PLAN

Q181: What are the key barriers to developing a crisis management plan for your company or
organisation? (Amongst those without a plan)

It's rarely going to be needed 33%

It’s too difficult to set up or manage 18%

It's too expensive 14%
Global

It's not a high enough priority 13%

I don’t feel I have enough information about what is out
there and how it could benefit me
10%

It would take too much time to plan 10%

16
ASSOCIATES

NEARLY HALF OF THOSE WITH A CRISIS PLAN FEEL
THAT THERE ARE STILL GAPS
Q109: To what extent, do you think that your company’s crisis plan will be
adequate in the event of a crisis? (Amongst those with a plan)

The current
Current crisis plan will be satisfactory
crisis plan
in event of crisis
will be 49%
satisfactor…

It will cover
Current crisis plan will cover the
company to some extent company
the but there are
to somegaps 47%
extent, but…

The crisis
Crisis plan will not offer proper
coverage and needs to bewill not
plan reviewed
offer proper 3%
coverage…

17
ASSOCIATES

47% HAVE INCREASED THEIR INTERNAL RESOURCES
FOR RESPONDING TO A CRISIS, WHILE 7% HAVE
DECREASED
Q50: In the past 5 years, has your company increased or
decreased its internal resources for responding to a crisis?

47% 46%

6%

Increased Stayed about the same Decreased

18
ASSOCIATES

BENEFITS OF PLANNING

19
ASSOCIATES

COMPANIES WITH A PLAN RECOVER FASTER

Q46: About how long would you say that it took your company to recover from the crisis?
(Among those who have experienced a crisis)

20% No Plan
One month or less
32% Plan

29%
Up to 6 months
31%

41%
6 months or longer
34%

20
ASSOCIATES

THOSE WITH A PLAN ARE MORE LIKELY TO HAVE
HANDLED THE CRISIS EFFECTIVELY
Q150: You said you company has experienced a crisis.
What was the impact on your company from the crisis? (Amongst those who experienced a crisis)

41%

33%
30%
27%
22% 22% 21% 20%
15% 16%

Drop in revenue Cut-backs and/ or lay- Loss of corporate Destabilisation of the None, the crisis was
offs reputation entire company handled effectively with
little or no damage to the
company

Plan No Plan

21
ASSOCIATES

DIGITAL HAS MADE CRISIS
MANAGEMENT MORE
CHALLENGING

22
ASSOCIATES

40% THINK IT IS HARDER
TO PLAN FOR A CRISIS TODAY
Q51: Do you think it is more or less difficult for companies like yours to plan
for a crisis than it was 5 years ago?

40% 41%

19%

More difficult About the same Less difficult

23
ASSOCIATES

IT IS MORE DIFFICULT TO PLAN DUE TO THE
CHANGING NATURE OF COMMUNICATIONS

Q53: Which, if any, of the below are reasons why you feel it is more difficult to plan for a crisis
today? (Among those who feel it is more difficult to plan)
50%
Global

37% 35%
31% 29%
25%

Need to respond Overall challenges More globalized Increased public Increased anti- Rise of citizen
extremely quickly of digital nature of demand for corporate sentiment journalism / social
communications communications transparency in public and/or media (e.g.
media Facebook, Twitter)

24
ASSOCIATES

COMPANIES BELIEVE THAT THE RISE OF DIGITAL
COMMUNICATIONS HAS INCREASED VULNERABILITY
TO A CRISIS
Q58: To what extent do you think the rise of digital communications has increased or decreased your
company's vulnerability to crisis?

55%
42%

4%

Increased Neither increased nor decreased Decreased

25
ASSOCIATES

SOCIAL MEDIA PUTS INCREASING PRESSURE ON
COMPANIES TODAY

81% When it comes to new media
of respondents believe that
new media’s role in driving 66%
reputation during a crisis is of respondents believe new
on the rise media has significantly
increased the potential cost
of a crisis
65%
of respondents feel that new However, after a crisis,
media makes crises more
difficult to manage… 55%
believe new media
(including social media) has
…And 65%believe it is
made it easier to recover
hard to know who
influences opinion online
26
ASSOCIATES

RECENT HIGH PROFILE CRISES (E.G. BP AND
WIKILEAKS) HAVE REVEALED PRESSURE POINTS
Q55: What do you think are the biggest issues for companies in crisis like. BP, Sony and those
attacked by Wikileaks when responding to the online public debate?

Inability to respond effectively to new media (including
social media) 43%

Slow response time 39%

New media (including social media) channels flooded
with negative commentary 34%

Lack of dedicated team to respond to new media 29% Global

Treating old and new media types differently 22%

Being undermined by employees 20%

Not seeking the support or assistance from third parties 19%

27
ASSOCIATES

HALF OF COMPANIES DO NOT FEEL CONFIDENT
HANDLING NEW MEDIA DURING A CRISIS
Q134/135: Which of the following statements is closer to your view?

Engaging and monitoring Understanding who online stakeholders are
social media channels and how to engage with them

46% 50%
54% DO NOT
50% DO NOT
DO HAVE HAVE FULL DO HAVE
HAVE A
FULL EXPERTISE A GOOD
GOOD
EXPERTISE GRASP
GRASP

28
ASSOCIATES

THANK YOU !

29
ASSOCIATES

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