I didn’t ask Alexa who Scott Galloway was…

I didn’t ask Alexa who Scott Galloway was, but I did happen to Google him because our persistent professors at the University of Melbourne kept mentioning how he’s the ultimate marketing guru. With my last semester almost out of the way, I took the opportunity to use time spent on my commute to read Scott Galloway’s The Four.

Best. Decision. Ever.

In his book, not only does Scott give a closer look into how The Four giant companies operate, he also gives a fresh, candid outlook on how technology has redefined social, search, brand, and retail.

One of the many interesting elements in the book is how he describes the men behind The Four, their drive and what seemed like madness at the time – their sheer determination to change how billions of people would use technology to make their everyday lives more convenient. The opinions I have about the four – Amazon, Facebook, Google, and Apple – have significantly become stronger after I read this book – further stroking my curiosity to see the next steps they take to stay at the top of their game.

I got to learn heaps about Amazon since it isn’t as big in India as it is in the US. Funnily enough, around the same time I was reading the book, Walmart invested $16 billion in Flipkart, an Indian e-commerce unicorn, which is, coincidentally, the worth of Amazon India. The author extensively elaborates on Amazon’s DNA and its relationship with its shareholders. While the success of this giant is attributed to our primitive need to gather things plus the convenience to shop from just about anywhere that e-commerce provides, Scott makes it abundantly clear how pure e-commerce is dangerous – not to mention how being at the mercy of Google is a terrible, terrible idea. This, I think, is a red flag for any business that primarily relies on this other giant – Google – to generate leads.

I am very proud of the fact that I do not fall for this third giant that Scott talks about in his book. I am not an Apple person. However, I was intrigued by how the author explained the magnitude of Apple’s success owing to its iconic founder, artisanship, vertical integration, global reach, and its premium price. I also agree with Scott’s expectation for Apple to be the (bigger) giant and invest in (you’ll have to read the book for this one) vs develop another cool phone screen.

Surprisingly, Scott wrote about Facebook’s unwillingness to take any responsibility for the amount of misinformation on this ‘social network’ platform way before its public hearing. In Scott’s words, Facebook truly has committed involuntary manslaughter of the truth on an unprecedented scale. Only time will tell how The Four either righteously rule the digital world or fall by the hands of their competitors.

From using his T-algorithm to predict the next giant in line, to learning what it takes to stand out of the crowd – by the end of his book, I couldn’t help but wish I was sitting in one of his marketing classes at the New York University Stern School of Business. Scott’s book is an extremely entertaining approach to the digital world – perfect for every marketing and communications student and professional.

Best Practices for Crisis Management on Social Media

In the current fast-paced media environment, organizations need to adapt and learn how to timely respond to media hype. Many communities, corporations and nations choose silence in times of crisis. Theorists have attempted to analyse the undertone of using silence or the absence of communication with the media.

Sellnow, Ulmer, and Snider (1998) argue that organizations refrain from any communication because of the possibility that it may be used against them in court. Regardless, Coombs (2012) argues that silence conveys ‘uncertainty’ and allows others to ‘take control’, further suggesting that the organization is ‘not in control’. In fact, Richards (1998) mentions that silence indicates the organization may be guilty or might have something to hide. The Volkswagen case on emissions standards is an apt example where the California Air Resources Board and the U.S. Environmental Protection Agency exposed the company for illegally installing software in its cars to dodge standards for reducing pollution (Pandelaere, et al., Companies Fare Worse When the Press Exposes Their Problems Before They Do). It was found that the CEO, Michael Horn, was tight-lipped about this ordeal even though he was notified a year earlier. Additionally, Volkswagen kept their silence even when EPA gave them a chance to come clean. As a result, the company faced negative publicity as this ‘information vacuum’ gave media a reason to suspect the organization and ‘build a case’ against it.

To fill the information vacuum, it is of critical essence for the organisation to be proactive with its narrative.

Heath (2004) elaborates on story guidelines: state an account of all elements (like characters, location, audience) in the story; elaborate on the organization’s control over the situation; double check the story in terms of logic and evidence; test whether the story is, in fact, ‘verifiable’. If an organization can follow these guidelines and timely fill the information vacuum with its narrative, it stands a good chance to manage the crisis successfully.

United Airlines PR disaster

Giving an account of the recent United Airlines PR disaster, the response by the company CEO, Oscar Munoz was inefficient to say the least. It was an unprecedented unfortunate event where a passenger was forcedly removed from a boarded flight. This was filmed and viewed worldwide, costing the company not only long-term reputational damage but also a loss of millions in market share (Winston, Pepsi, United, and the Speed of Corporate Shame). As a response to this fiasco, Munoz’s first statement wasn’t aligned with the seriousness of the contents in the video. The elements in his story weren’t rightfully mentioned as he referred to forcibly removing a passenger as simply ‘reaccommodating customers’ (Image 1). To curb the damage caused by the crisis, it was vital for Munoz to fill the information vacuum with an earnest response. Not only was his response one day late (Sakzewski, United Airlines: What can we learn from company’s ‘breathtakingly bad’ crisis management?), he was completely out of touch with the narrative and associated emotions of his stakeholders. While the video itself was ‘verifiable’ content, Munoz’s subsequent attempts at apologizing were evidently inadequate to pacify the crisis. Eventually, his fourth statement via television mentioned that he felt ‘ashamed’, acknowledged that ‘no one should even be mistreated this way’ and apologized to the passenger (Anon., United Airlines will stop using police to remove passengers from full flights, CEO Oscar Munoz says). Munoz’s final apology was cohesive and aligned to Heath’s guidelines for a proactive narrative.

crisis management
Image 1: United CEO’s response to United Express Flight 3411

Pepsi’s Kendell Jenner Ad

In contrast, when crisis hit Pepsi for its advertisement where Kendell Jenner is seen skipping a photo shoot to join a protest, the organization was quick to fill the information vacuum. After it received huge backlash for incorporating imagery from a Black Lives Matter protest and portraying protests as a fun event rather than a serious gathering, the advertisement was taken down immediately (Taylor, Pepsi’s new ad shows Kendall Jenner joining a protest and giving a cop a soda — and people are furious). Responding to the negative reactions, the company released a statement where they stated they wanted to convey the message of ‘unity, peace and understanding. The statement (Image 2) went on to acknowledge their mistake by stating: ‘clearly we missed the mark and we apologise. We did not intend to make light of any serious issue’. Pepsi followed through Heath’s guidelines as it had a proactive narrative, quick apology and took ownership for their tone-deaf campaign.

crisis management
Image 2: Pepsi’s statement after the Kendell Jenner ad backlash

To approach crisis management on social media, Cheng’s article examines crisis communication strategies and describes an Interactive Crisis Communication (ICC) model which focuses on the importance of measuring stakeholders at a time of crisis and strongly suggests building a long-time positive dialogue between the organization and stakeholders through a reliable third party. The ICC model mentions numerous strategies across different stages of crisis out of which ‘stealing thunder’ has noticeably proved successful in mitigating crisis. Claeys, Cauberghe and Pandelaere (2016) reveal findings from their research on ‘stealing thunder’ which involves disclosing the crisis before the media does.

Studies show that when an organization discloses its crisis, not only is it identified as a more credible firm, the problems disclosed are also perceived as less severe.

Additionally, another study confirms that people pay less attention to self-disclosing news from an organizational crisis due to its nature of being perceived as old news (Pandelaere, et al., Companies Fare Worse When the Press Exposes Their Problems Before They Do).

While it might be tempting for organizations to hide a crisis from their most important stakeholders – the public, dealing with the situation upfront, self-disclosing crisis details, ultimately stealing thunder can prove to be a sensible option because it evades negative attention and reputational damage to the company.

Another successful practice for crisis management is choosing the right channel to target the right stakeholders.

Gilpin (2010) mentions that:

social media has reduced the time for an organization to react to a crisis, thus, when responding to a crisis, organizations must choose the right platform to convey their message

For example, Domino’s 2009 YouTube crisis involved responding to a fraudulent video published on the same platform. First, to respond to the crisis, Domino’s choice of platform (YouTube) was apt as this approach entailed a direct relationship with its targeted audience; second, the company could communicate through visually-rich content in place of a traditional press release waiting to get picked up by news reporters. Managing crisis through the right channel proved to be fast, engaging and effective for Dominos.

Bowen and Heath (2007) elaborate on the following five perspectives that reinforce an ethical narrative by organizations:

  1. the company should embed ‘moral obligation to society’;
  2. focus on its relationship with its stakeholders;
  3. delicately handle any form of harm it could cause;
  4. lawfully execute ethical actions;
  5. should be truthful as an organization

After relevant research and a deeper look into the case studies mentioned, it is clear that crisis communication is more important than ever before much due to the increasing need for ‘immediacy’ in communication with stakeholders.

Best practices for crisis management on social media include identifying evolving crisis and timely filling the information vacuum with a logical narrative. It is essential for organizations to understand the implications of keeping silent during crisis and steal thunder by self-disclosing crisis details through the right platform.

In conclusion, organizations worldwide are functioning in a space where stakeholders can point out and magnify any errors made. There is a dire need for organizations of every size to comprehend the importance to regularly monitor the media in order to pacify any evolving negative PR story – called crisis creep (Regester and Larkin, 1997). Scholars agree that being upfront about the situation in times of crisis and investing in transparent conversations with stakeholders ultimately helps limit fake stories and negative publicity surrounding the company (Carmichael, Putting the Right Information on Twitter in a Crisis). Since crisis management in the digital age is still an evolving territory, we are bound to learn more about dealing with information vacuum in the near future.

 

This research essay was first put together as a part of my coursework for master of marketing communications at the University of Melbourne.

Introduction to Crisis Management and Information Vacuum in Social Media

A crisis can broadly be characterized as an incident that consists elements of surprise, danger, and uncertainty which can affect communities, corporations, and even nations. McLean (Clock is ticking on Malaysia Airlines in crisis management) states three ‘crisis realities’ that organizations may crumble under if unprepared – the lack of information, time and the right resources. The dearth of these three realities can create a ‘crisis smog’ – blinding organizations with the pressure to deliver an informative response.

When a crisis occurs, people are hungry for information and need someone to communicate accurate information to them (Carmichael, Putting the Right Information on Twitter in a Crisis). Marra (cited in Pang, Dealing with external stakeholders during the crisis: Managing the information vacuum) emphasizes on media’s demand for ‘immediate information and answers during a crisis’. Coombs acknowledges this hunger for information and media’s continuous search for crisis details, while the stakeholders, people directly and indirectly affected by the crisis, start to consider media as a primary source of information. This, ultimately, turns into a vicious cycle.

Although credible information timely communicated by an authoritative source can reduce public outrage and help people come to terms with the crisis, a gap between the occurrence of the crisis and the response can create an ‘information vacuum’.

To avoid inaccurate and rudimentary information in the ‘vacuum’, scholars have called for attention to fill the space with useful information. Citing a practitioner who states that misinformation becomes news in the absence of information, Marra explicitly expresses the necessity to fill the vacuum.

Crisis Management on Social Media

To fill the information vacuum and communicate with key stakeholders at a time of crisis, new media presents itself as alternative route to manage crisis damage. In this day and age, social media plays an undeniably significant role in crisis management.

First, due to the high speed at which news travels on social media as compared to other channels, organizations, regardless of their size, need to constantly monitor and track their online presence (Pownall, How social media impacts crisis communications). Because social media creates a kind of ‘urgency’, it is wise for organizations to respond as quick as possible to a crisis. Additionally, social media is a convenient channel for people from anywhere in the world to share their perspective on. Keeping this in mind, Kauffman how mainstream media finds it easier to pick up information from this source even if it may not be as ‘well-informed’.

Second, transparency is paramount in the digital age which is a reason enough for organizations to be open and responsive, especially during a crisis (Klein, Transparency: Social Media Is Forcing You to Tell the Truth). In other words, when a crisis first breaks out and the facts are unclear, social media plays an intrinsic role in a crisis management strategy.

Social media channels’ immediacy creates both opportunities and challenges for communication professionals.

As described by Pownall, a reputation & communications adviser, social media has several advantages including but not limited to: a source of insight for organizations to identify how various stakeholder groups think and feel, thus, making it easier to maintain a direct relationship with them; a platform where crisis strategy can be tested real-time; a platform where various media formats can be used to communicate facts and express emotions. Directly or indirectly, these plus points present themselves as opportunities to professionals who are a part of the crisis management team in organizations. While immediacy created by social media channels provides numerous opportunities, it presents challenges as well. Pownall mentions how organizations are expected to respond almost immediately to a crisis while at the same time they are expected to be thoroughly consistent with their messages across channels; it is a necessity to monitor incoming comments and feedback with an innate understanding of how to respond (or not respond) to them; communication professionals who do not understand the dynamics of social media could turn out to be a risky hire as they can easily make poor decisions at a time of crisis.

According to a recent Nielsen report, there is an overall increase in the time spent on social media among consumers. Adding to this, today anyone with a device connected to the internet can publish – anytime, anywhere (Alejandro, Journalism in the age of social media). Therefore, when the information vacuum is not timely filled with credible information it often leads to huge pitfalls as social media is notorious for giving birth to hearsays and hoaxes. For instance, in March 2016, a fake website copied the design of the New York Times and published an article stating that Elizabeth Warren endorsed Bernie Sanders for president. This hoax was shared by a staggering 700,000 people to the point where The Times had to clarify that they had nothing to do with the fraudulent article (Garcia & Lear, 5 stunning fake news stories that reached millions). An instance that highlights the influential nature of social media channels is when Facebook and Twitter users broke the news of Michael Jackson’s death before any major news network did. This news was consumed so widely over social media that some websites even crashed due to the heavy traffic flow. This further proves Alejandro’s point that ‘in the social media sphere, news is word of mouth on steroids.’ In another instance, Twitter co-founder, Evan Williams apologized for social media site’s role in getting Donald Trump elected as the President of the United States (Schladebeck, Twitter co-founder apologizes for site’s role in Trump presidency).

Evidently, social media plays a vital role across industries and because of its prominent nature, organizations need to identify best practices in their own industry and master the art of crisis management. Eventually, this will help them maintain authoritativeness and long-term meaningful relationship with their stakeholders.

 

This research essay was first put together as a part of my coursework for master of marketing communications at the University of Melbourne.

Why Daniel Wellington wins on Instagram

Established in 2011, Daniel Wellington is a watch company named after a British traveller. With its headquarters in Uppsala, Sweden, this brand has named its watches after different cities in England. As stated on its official website, these series of minimalistic, vintage-looking watches equipped with interchangeable NATO and leather straps mainly target young audiences. Daniel Wellington, also known as DW, although designed in Sweden, is manufactured in China with internal quartz movements from Miyota, a reliable Japanese supplier (Pulvirent, How Daniel Wellington Made a $200 Million Business Out of Cheap Watches). The founder, Filip Tysander, has been able to build a $200 million business by selling these classy-looking inexpensive timepieces almost entirely from social media promotions.

Filling the void for watch brands online, Daniel Wellington owns the current decade in terms of online popularity. Through their social media approach, DW has been able to gain over 3 million followers, leaving behind top competitors in its industry. In addition to DW’s pricing, distribution, and timing to enter the watch market, it’s communication strategy is one of its major reasons for its success (This 31-year-old built a $180 million fashion empire in 5 years – here are his secrets to success – Business Insider Nordic).

How has new media worked for Daniel Wellington?

In terms of marketing, Pulvirent elaborates on the company’s novel approach on social media – working in collaboration with social media influencers, bloggers, and celebrities, to promote their brand worldwide. Working with social media stars has been observed to build a positive brand image, gaining more customers thus generating further sales (Feng et al., Cross-culture study of the use of social media in Sweden and China). Based on its foundation on public influence and how ‘noncompany actors influence customers to value the brand’ (Holt, How brands become icons: The principles of cultural branding), Daniel Wellington has been able to achieve viral branding.

With the decline in responses from customers on conventional online marketing, viral branding positions customers as an important factor in creating a brand, hence giving them the power to ‘discover’ brands.




According to Holt, companies underhandedly connect with influential customers to further develop their brand’s value. Similar to this approach, to create its brand identity, Daniel Wellington has given out free watches and special promotional coupon codes to thousands of influencers (Mediakix Team, Instagram marketing case study: Daniel Wellington watches). These influencers or brand ambassadors who have hundreds of thousands of followers act like ‘social proof’ for the product, in this case, the DW watch. Since people are attracted to products that others engage with, having social media stars onboard as brand ambassadors has pushed Daniel Wellington to gain more number of customers.

Stemming from this type of influential marketing, is online word-of-mouth, also known as e-WOM.

As the campaign progresses and influencers share their review of the product, followers are lured to turn into consumers and further spread feedback – both good or bad (Armelini & Villanueva, Adding Social Media to the Marketing Mix). E-WOM has worked in favour of DW as this organic channel has helped the brand sell over a million watches (Lee, How Daniel Wellington Sold A Million Watches In A Year Via Word-of-Mouth and referral marketing blog). Additionally, Armelini and Villanueva mention how e-WOM is easier to manage since it is interactive, unlike traditional channels like advertising. Online word-of-mouth makes it possible for all customers, past or present, to come together as a brand community and share their reviews which helps future customers base their decision to choose the brand or not. Overall, Daniel Wellington’s collaboration with influencers on Instagram has helped it build brand awareness and increase its online visibility (Leibowitz, Why your new business needs to market on Instagram). In line with its marketing strategy to collaborate with top influencers, Daniel Wellington recently added top social media celebrities including the famous Kardashian half-sister Kendall Jenner (75.9 million Instagram followers), an accomplished model Lucky Blue (2.8 million followers), and the stylish Rola (4.4 million Instagram followers) to their influencer list (PR Newswire).

Although influencer marketing has been observed as a communication strategy that combines trust with casualness, it is also sometimes perceived as a ‘in-your-face’ kind of marketing

(Montesi, Do Influencers Have a Future with Instagram Marketing?)

An influencer at the Advertising week Europe 2016 spoke of the need to educate followers about the nature of contract between an influencer and a brand (Charles, Instagram influencer hits out at ‘annoying’ blogger tactic by watch brand). Additionally, Daniel Wellington has been criticized for over-branding. The brand is known to be fussy with its Instagram influencers as they choose those who have an Instagram feed aesthetically similar to that of Daniel Wellington’s brand personality (Gilliland, Four common mistakes brands make with influencer marketing). On several occasions, this has led to more focus on the brand image than the product itself. Thus, in its approach to appear sophisticated, Daniel Wellington can ‘overbrand’, losing its initial aim of focusing on marketing their products.

Daniel Wellington is known for its Instagram feed full of professional photography that brings in the ‘glamour’ look to the brand handle. DW’s photos bring a very stylish and classy feel to Instagram users, depicting a life of luxury and adventure (Vesilind, Instagram We Love: Daniel Wellington). In her article, Vesilind goes on to point out the five different kinds of photos published on the Daniel Wellington Instagram profile which contribute in making it a huge success: gorgeous outdoor scenarios, artfully arranged ‘flat lays’ referring to the organized pictures taken from above, aesthetically pleasing pictures of humans taken from a far, pictures with subtle hints of festive seasons and finally, adorable pictures of animals. In other words, Daniel Wellington’s sophisticated Instagram feed depicts tastefully arranged art, centered on the showstopper – the Daniel Wellington watch itself. This attractive Instagram feed entices users to follow and engage with the brand.

Instagram is notably among the top social media platforms to engage with users. Thus, making it an apt platform for Daniel Wellington to interact with its followers and encourage audience engagement. Daniel Wellington has incorporated User-Generated Content (UGC) in their communication strategy. The brand makes use of this powerful tool by encouraging their followers to post their own images of Daniel Wellington products by using their branded hashtag (#danielwellington). Every day one of their customers’ photo – wearing or focusing on a Daniel Wellington watch – is chosen and republished on their own Instagram feed using #DWPickoftheDay. This motivates customers to create their own content in the form of images or videos and publish them on Instagram in the hope to be chosen as the brand’s ‘pick of the day’ (Taylor, Daniel Wellington & Instagram). This would not only validate their work as ‘creative’ but also expose their content to DW’s millions of followers. So far, Daniel Wellington’s branded hashtag campaign, combining influencers and followers, has generated over 1.2 million Instagram photos and videos. In another article, Ojeda (How To Create A Brand That Grows On It’s Own) mentions that for brands to be successful, organic growth plays a significant role. Keeping this in mind, it’s safe to conclude that Daniel Wellington has a source of high-quality user-generated photos at their disposal, making it one of most successful brands on Instagram.

Will DW’s success with Instagram last?

To summarize Daniel Wellington’s communication strategy, the brand has been highly successful in dodging paid media as the company’s CEO never invested in traditional forms of media. The brand has established itself as one of the most viral watch brand on Instagram. Daniel Wellington started out with simple platforms as owned media like its website, and social media platforms like Facebook, Twitter, and Instagram, but today, its relies on its earned media, especially on Instagram, to communicate with its most important stakeholders – its customers.

Across all its channels, Daniel Wellington’s key messaging is consistent – engaging with customers and potential customers through its social media channels, especially Instagram, where it actively encourages quality user-generated content, using Instagram influencers for ‘natural’ product placements and generating traffic through promo codes.

Despite being one of the most used apps by millennials, Instagram is found to have substantial lacking for businesses (Latiff and Safiee, New Business Set Up for Branding Strategies on Social Media – Instagram). Even though Instagram requires another platform for a customer and seller to engage in a transaction, Daniel Wellington’s communication strategy through Instagram has seemed to work to build its brand. Daniel Wellington has been recognized as an accomplished brand, however, it has been noted that brands like Daniel Wellington are the reason for the end of the Swizz watch industry. In his article, Biggs (The Swiss watch industry is doomed) criticizes the economical pricing of Daniel Wellington and how similar brands are the reason luxury Swizz brands fail to keep up. He elaborates, stating that watches today are a mere commodity, blaming Daniel Wellington for selling ‘poorly-constructed watches’, thus providing customers a low-quality watch. With a recent study revealing Instagram as the worst social media application for young people’s mental health (Fox, Instagram worst social media app for young people’s mental health), it may be possible that Instagram might not remain as popular as it is today. In which case, brands like Daniel Wellington would have to take on other social media channels to promote their products and services.

With another study revealing the decline in the sale of smartphones (Swant, 7 Internet Trends From Mary Meeker’s 2017 Report That Marketers Should Know About), Daniel Wellington would need to consider other channels to market their product since access to all Instagram features are currently available only through its mobile application. As digital media continues to grow, Daniel Wellington can possibly find itself exploring or even experimenting with other social networks or applications to grow their customer base and retain their innovative brand identity. Even though Instagram started out as an image-sharing app, with every social network moving towards video, this platform is sure to introduce advanced features as it has with its launch of the live video platform (Burgess, Instagram’s future and where Kevin Systrom goes next).

With the fast-changing social network scenario, Daniel Wellington may be expected to add and remove elements from its marketing mix. Besides their online communication strategy, Daniel Wellington’s offline presence is noticeably grown over time. Their recent Hong Kong expansion adds to their existing 34 stores worldwide. In their attempt to make the brand identity more popular on the global scale, Daniel Wellington aims to open approximately 300 stores by the end of 2018. For now, Daniel Wellington’s communication strategy seems to be working in its favour. The steps taken by the company to spread their presence offline are also considered to be quite successful with the current times. With Daniel Wellington’s founder’s investment in a new technology fund helping Swedish start-ups make a positive social impact, it can be speculated that the billionaire has a visionary approach to social entrepreneurship as well as his products (Turula, The billionaire founders of Klarna and Daniel Wellington just announced a new ‘first of its kind’ tech fund). With time, Daniel Wellington’s communication strategy that highlights its products on social media, especially through Instagram, is bound to evolve with advancements in technology.

 

This communications strategy evaluation was first put together as a part of my coursework for master of marketing communications at the University of Melbourne.