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CRISIS COMMUNICATIONIn The YouTube Age

7 August 2009

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Crisis communicationsin the YouTube age

By Julian Matthews,Trinetizen Media

www.trinetizen.com

August 7, 2009

Part 1: 3 PR disasters

you want to avoid

No 1: Nissan.com

Nissan vs Nissan

Uzi Nissan, founder of Nissan Computer Corporation, owner of websiteNissan.com

“In Dec 1999, more then five years after I registered nissan.com, legal action was instituted by Nissan Motor seeking $10M in damages, and to restrain me from the use of my family name for business purposes on the Internet.”

Documents on ncchelp.org

Over 10,000 messages on ncchelp.org

“I just got a message reading about how you are trying to ROB Mr Nissan of Nissan Computer Corp of his domain name. Shame on you. That is just so typical of some of the more heartless, overbearing, petty, evil corporations out there. Why will you not let this man use his name? Didn’t he have the domain name BEFORE you? You will regret your lame decision on this matter. Don’t get the American public started cuz once we are outraged there is no stopping us. Have a rotten day OK? Thanks.” Aaron O’Brien

“To the Nissan bullies:Nissan is a common Hebrew name and it is the name of one of the months of the Jewish calendar. The name of the month has been in existence since biblical times. I would suggest to Nissan Computers to sue you for name infringement as you have used both his family name and the name of the Hebrew month many years after his name had been in existence and had been registered.  Just because you have more money doesn't give you the right to bully people around. As for me, while I am proud of my Honda and of my Volvo, I will never own a Nissan car, and see to it that none of my friends will either.” Dr. Bar-Av

Will the real Nissan.com please stand up?

• “I feel like David against the Japanese Goliath. Nissan Motors filed the lawsuit against me hoping to bully me into giving up my domain name,” He estimated legal costs to be between US$250,000 and US$1 million.

• Feb 5, 2008: Nissan Motor Corp lost case. Ordered to pay US$58,000 as cost.

• March, 2008: Nissan Motor is attempting to obtain a Federal Trademark Registration for PCs and PC peripherals. “We feel that Nissan Motor, in this action, is staging a future case against us in the computer and peripherals market.” 

No 2: Dell laptop explodes at Japanese conference

• June 21, 2006: Dell laptop explodes at conference in Osaka, Japan

• Witnesses take dramatic photos

• Popular tech sites post pictures online, virally spreads via bloggers

• Worst scenarios speculated: "It is only a matter of time until such an incident breaks out on a plane."

Good news, get it out fast.

Bad news, get it out faster.

Dell’s response1. Determines cause – battery supplier,

executes costly remedial action with safety in mind.

2. Liaises with authority: Works with U.S. Consumer Product Safety Commission to announce global recall of 4.1 million laptop batteries.

3. Used website: Sets up recall website for customers to check affected units.

4. Assures safety: Guarantees replacement batteries are safe.

Sony delays response,problems deepen…

• Aug 14: Dell recalls 4.1m batteries• Aug 24: Apple recalls 1.8m batteries• Sept 15: Virgin Atlantic, Qantas and Korean Air

ban use of Dell and Apple laptops on board its planes, unless the batteries were removed.

• Sept 28: Lenovo/IBM: 526,000 batteries• Sept 29: Dell increases recall to 4.2m • Sept 29: Toshiba recalls 830,000 batteries

ThinkPad explodes in LAXGizmodo.com, Sept 16

“So we're waiting for a flight in the United lounge at LAX, this guy comes running the wrong way, pushing other passengers out of the way and quickly drops his laptop on the floor. The thing immediately flares up like a giant firework for about 15 seconds, then catches fire….”

Charred remains of IBM notebook on terminal floor

Crisis Escalates, Spreads Virally

Sony finally responds…

Sept 30, 2006: Sony finally announces global recall of 9.6 million PC batteries. The recall and replacement would cost as much as 50 billion yen (about US$423 million).

Sony execs’ bow not deep enough?

“We want to put this behind us. I take this problem seriously and I want to finish the replacement program as quickly as possible for the sake of our users and corporate customers,”Corporate Executive Officer Yutaka Nakagawa, Oct 24, 2006

Sony’s crisis post-mortem

• Was slow to take blame, disclose information and coordinate global recall

• Let clients make multiple announcements making crisis protracted and painful

• Only worked with US Consumer Product Safety Commission (and Japan’s Economy, Trade and Industry Ministry) to coordinate recall and replacements with clients, after clients did so themselves

By Julian Matthews, ZDNet Asia October 23, 2000.

KUALA LUMPUR – An 'alien' substance was mixed into the production process of the battery that caused a Dell customer's notebook to burst into flames and prompted a recall last week.

"As a result of analysis, we defined the cause of the short circuit that occurred in one cell was due to mixing of an alien substance at one production process," said Yoshiyuki Arikawa, a spokesperson of battery-supplier Soft Energy Company, a unit of Japanese consumer giant Sanyo Electric Co Ltd.

In the e-mail response to ZDNet Asia, Arikawa did not define what the 'alien' substance could be or how it entered the production process…

Arikawa added, "The defect rate should be very small since it’s a specific occasion and (went through) normal inspection process after. The defect is limited only to the 27,000-set lot to Dell."

Dell Computer recalled the 27,000 batteries with a promise to replace them free of charge….

‘Alien’ substance caused Dell notebook battery to ignite

http://www.ideastorm.com

Dell sets up IR blog

No 3: Kryptonite Bike Lock Fiasco

The power of video blogs• A biker finds out that his bike lock made by US lock-

maker Kryptonite can be picked with a Bic pen. He posts video online.

• Company does not react after three days, ignores bloggers

• Bloggers continue to rail at the company until it finally agrees to exchange the old locks for new ones, at an estimated cost of at least US$10 million.

Kryptonite Lock Fiasco

Kryptonite Lock Fiasco

Mainstream media picks up story

Source: Fortune

Ingersoll-Rand Endures Kryptonite's US$10 Million Hit

• Unanticipated costs of US$10m for replacement programme for Kryptonite affected operating margins for Security and Safety division of parent company in Q3, 2004.

• “Operating margins of 16.5% declined compared to 21.2% for same period in 2003,” the company reported in Oct. 21 filing with SEC.

• NYSE-listed company with market cap of US$11b and annual revs of US$9b, 42,000 employees, est, 1871.

“Comes with two keys. Keep one with you, and the other safe at home in your desk drawer.”

Lock offer on Ebay

Kryptonite lessons• Every person has the power to affect your brand,

product, service in a profound way• The social media space is growing, influential and

you cannot afford to disregard it anymore• Be ready to update website, re-act to comments

quickly, use a blog, Facebook or Twitter• Stick to the truth. Corporate-speak will not hold

water.• Kryptonite after claiming ignorance for the longest

time starts own blog - one and half years later.

The Internet in 1992

Internet in 2009

The Old Media World

The New Media World

Investors

Customers

Prospects

AnalystsPartners

Employees

Community

Press

MESSAGESMESSAGES

Competitors

1,714,000

0200,000400,000600,000800,000

1,000,0001,200,0001,400,0001,600,0001,800,000

2002 2003 2004 2005 2006 2007 2008

Broadband Subscribers in Malaysia

Rise of broadband in Malaysia

Note: Internet penetration est. 62.8%, about 15.8m June08, Source: Internetworldstats.com/MCMC

Phone penetration

62.8%100.1%

Internet penetration

We are nearing the tipping point…

Source: Malaysia, Q12009, MCMC

Where Is Everyone?

200,000,000 videos/per day

(65,000 new videos uploaded daily)

(Source: comScore, Dec 2008)

Source: Universal McCann Comparative Study on Social Media Trends April 2008

73% of active online users have read a blog

57% Have joined

a social network*

•66% in March 09 Survey•Malaysia leads the way with47% penetration of all 16-54year-olds.•Estimates suggest over 1musers – InsideFacebook.com

* Universal McCann survey Apr 2008

55% have uploaded photos

83% have watched video clips

Source: Universal McCann Comparative Study on Social Media Trends April 2008

Tomorrow’s customers are

today’s “digital natives.”

Crisis comms report card

• Decline = no comment

• Defensive = take it personally

• Denial = lie or hide

• Deflect – taichi, blame game

• Acknowledge

• Accept – if you are wrong

• Apologize (if you have to) and be specific

• ACT – fix it

Part 2: Online rumours

Ericsson free phone offer• An email promising a free handphone from

Swedish telco giant Ericsson

• Those who forwarded the email to 8 friends would receive a free Ericsson T18 handphone within two weeks. If forwarded to 20 friends, senders were promised "a brand new Ericsson R320 WAP phone."

• Reminded the recipient to send a copy to Anna.Swelund@ericsson.com of Ericsson Marketing.

1.Contact authority: Peter Bodor, PR manager of Ericsson Mobile Communications confirmed the chain mail is hoax.

2.State facts: No such promotion and no such person named Anna Swelund in company.

3.Post notice and apologize: Ericsson posted a notice on its website advising people to discontinue forwarding the email and apologized for the inconvenience.

4.Educate: Point to other similar chain mail examples eg: Nokia, Microsoft and Disney.

5.Suggest action: Before forwarding email check with Google, snopes.com, hoax-slayer.com or David Emery’s http://urbanlegends.about.com/

How to kill a rumour

Samsung phone easily broken?

YouTube video taken down

Problems with Internet rumours• Difficult to identify source.

• Can’t tell how widespread.

• If you choose to ignore, it may go viral.

• If you choose to fight it, it may attract more unwanted attention.

• If partly true – “where there is smoke there is fire” – a denial may seem insincere and fan the flames.

Fighting rumours, Obama-style

• “Not born in America”

• “He’s a Muslim”

• “He swore on the Quran when he took oath as senator”

• “Funded by foreigners”

• “Palling around with terrorists”

The Michelle Obama Rumour• Ordered expensive room service

lunch at the Waldorf-Astoria in New York

• Consisted of lobsters, imported caviar from Iran and champagne racking up to a total cost of $447.39.  

• New York Post published rumour on October 17, 2008. 

• Four days later, retracted story: "The source must have been under the influence of a mind-altering drug."

Politifact.com and Truth-o-meter

Coca-Cola fights myths online

http://www.thecoca-colacompany.com/contactus/myths_rumors/

Early Detection and Prevention

• Monitor keywords via search engines, alerts.

• Have planned responses ready for any crisis.

• Go public on your website.

• Cultivate strong relationships with journalists and editors.

• Keep employees informed: nip rumours in the bud on one-to-one basis

Julian Matthewse : julian@trinetizen.comw: www.trinetizen.comb: blog.trinetizen.comt : twitter.com/trinetizenm: +60-12-915-9528

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