On Wednesday I presented at a fascinating training morning run by e-Consultancy’s Craig Hanna along with Blogging4business’s Matthew Yeomans. The agenda was to educate the audience about blogging as a phenomenon and to give them a sense of what it could teach them about their own customers and how they could use blogging and other social media tools in marketing.

The speakers were Andy Budd of Clearleft, Heather Hopkins of Hitwise, Debbie Weil, author of The Corporate Blogging Book.

There were some great case studies presented and interesting stories from the floor. Heather wrote it up here. I am afraid I missed Andy Budd’s presentation, but my favourite moments were:

Heather’s account of the huge impact of social networks on e-Commerce (it is as important as search) and her observation that 2% of Amazon purchase traffic comes from blogs. It doesn’t sound like much, but Yahoo! only provides 3%.

Debbie’s account of how marketeers are trying to use social media, sometimes well and sometimes poorly … she used an hilarious parody GM Chevy Tahoe ad, which was submitted in response to an online promotion. (Can’t find a link, but here is an ABC report) I talked about how brand messages are mediated by search, and how that means that the brand has to compete for thought space with journalists, competitors, regulators and bloggers. Thus …

The upshot is that you have as a brand a central duty to find out the words that are being used about you, particularly in the context of links, and try to make them as relevant to your core brand promise as possible.

BTW: After I read what Heather had written about what I said, I sent her the following mail, explaining the points I had been trying to make about links:

Forbes magazine has devoted a sensational cover story to bloggers who set out to damage people and brands. Since the piece itself is password-protected, here is how it kicks off:

Web logs are the prized platform of an online lynch mob spouting liberty but spewing lies, libel and invective. Their potent allies in this pursuit include Google and Yahoo.

Blogs started a few years ago as a simple way for people to keep online diaries. Suddenly they are the ultimate vehicle for brand-bashing, personal attacks, political extremism and smear campaigns. It’s not easy to fight back: Often a bashing victim can’t even figure out who his attacker is. No target is too mighty, or too obscure, for this new and virulent strain of oratory. Microsoft has been hammered by bloggers; so have CBS, CNN and ABC News, two research boutiques that criticized IBM’s Notes software, the maker of Kryptonite bike locks, a Virginia congressman outed as a homosexual and dozens of other victims–even a right-wing blogger who dared defend a blog-mob scapegoat.

Forbes’s writer Daniel Lyons point out that first amendment rights protect many writers who are simply out to settle scores, or in the case of “Pamela Jones” - the writer of Groklaw - take a partisan line on SCO’s case against IBM over Linux. Lyons suggests that Jones may be an IBM mouthpiece.

The article is written in a sensational flack versus counter-flack style, but both it and the indignant response from bloggers are worth a read.

(via Micropersuasion)

Saul Hansell in the New York Times has produced a comprehensive analysis of how Google has come to dominate advertising - that is not just online advertising, but advertising in general.

New Communications Blogzine has published Mark Rogers’ article looking at how Market Sentinel measures corporate reputations with our “net promoters index”. Here it is:

A year ago when our new company Market Sentinel started distributing live reports on brands drawn from monitoring message boards and blogs, one of our early pitches was to a research head of a large mobile carrier who was sceptical as to the value of it.

“Who are these people?” he asked, reviewing a page of sometimes negative remarks on a new mobile handset. “Isn’t this just chit-chat?”

We realised then that we would need to produce a metric which showed – in as objective a way as possible – how positive and negative commentary played online. We lighted on the work of Bain and company’s Fred Reichheld. Reichheld, in a series of books like “The Loyalty Effect” (1996) and “Loyalty Rules” (2001) has demonstrated that there is a simple way of measuring the public attitude to a company. You simply ask a consumer:

“Would you recommend this product or service to a friend?”

If the answer is yes, the person is a “promoter,” if no, the person is a detractor. You deduct the first number from the second to reach something known as “the net promoters index.”

The index really comes into its own when you compare two or more companies in the same sector. The higher the positive number applied to a company, the more likely the company is to grow (more recommendations=more customers). The lower the number, the more likely the company is to shrink (more detractors=fewer repeat purchases).

Recommendations matter. In Emanuel Rosen’s book, the Anatomy of Buzz he points out that

• 65% of Palm customers heard about the device from another person.

• Friends and relatives are the number one source for information about places to visit or about flights, hotels or rental cars.

Of people surveyed by the Travel Industry Association:

• 43% cited friends and family as a source for information.

• 57% of customers of one car dealership in California learned about the dealership from another person

“This is not unusual,” says Jim Callahan of the research company Dohring.

[Source: James Torio’s “Blogging a Global Conversation” ]

The recommendations we would formerly seek from friends and family we increasingly find through Google. Research shows that 75% of shoppers use search engines with the intention of purchasing products and services . What they find when they get there is increasingly determined by bloggers and contributors to online forums. Recent research by Market Sentinel in the UK showed that, of Nielsen’s Top 50 grocery brands, 40% had negative commentary in the top ten results on Google UK . Searchers will even put keywords into searches to look for issues. For example, in the last 30 days, one of the popular searches tracked by UK-based paid search vendor has been “Ford Focus problems”. This is a search designed to flush out online resources dealing with customer service issues.

Why does this “net promoters” index matter? Why is it important to keep the number of detractors down, and the number of promoters high? According to Reichheld’s exhaustive studies, it is very accurate leading indicator of stock price. A high value means that your stock will rise, and a low value spells trouble.

I was reminded of this recently in the context of some work Market Sentinel and its partners are doing looking at the issues a famous corporation has been experiencing with its customer services function. The corporation, faced with a highly competitive marketplace, took the decision to offshore much of its customer services function to India. It cut down on expensive home visits which were an important constituent of its value add. Wall Street applauded and the stock price rose. However the number of negative comments about the company in message boards and blogs rose steeply. Customers did not appreciate the long waits for customer service. They did not appreciate the failure of the company to fulfil on its after sales promises.

Finally, earlier this summer, the company was targeted by a famous blogger who had bought one of its products and was frustrated not just by the poor quality of the product, but by the company’s failure to fulfil its customer service promise. The blogger started writing about it and was immediately deluged with comments and trackbacks by aggrieved fellow customers.

A couple of weeks back the company published its latest numbers. Growth has stalled (more detractors=fewer repeat purchases). The stock price fell like a stone. As Mr. Reichheld puts it in a paper published by the Harvard Business Review, the “net promoters” index is /”The One Number You Need to Grow”.

Market Sentinel’s benchmarking service provides an index of “net promoters online” and tracks it live. It is now our most popular service. Tracking corporate reputation online is the business equivalent of the Nielsen rating. And it is something managers and corporate investors simply have to do if they want to look at whether a company is on the way up, or the way down.

We were excited to find talk of reputation management and how it is influenced by the blogosphere on this Russian blog. Unfortunately our Russian isn’t good enough to understand too much more, although the expression “reputatsionnaya bomba” - reputation bomb - seems a useful new expression.

Mark Rogers is interviewed by Guillaume du Gardier of Blogging Planet in a podcast about online visibility, brand auditing and benchmarking, and brand response.

Market Sentinel gave a presentation on September 15th at the Internet Advertising Bureau, looking at how company’s reputations are effected by search. It is interesting to note that a huge consumer-facing company like Hutchison 3G, despite vast off-line investments in branding, have somehow ended up with a web site which contains fewer than 50 words indexable by search engines, with zero information about their products, services, customer issues, investor issues etc.

Hutchison Whampoa hopes to float the company next year and one wonders how long it will take them to sort this out.

We launched our “Search is Brand” whitepaper at the end of June, discussing how customers experiences of brands was increasingly dictated by search - and pointing out that the search gives a lot of prominence to detractors. Our means of publicising the white paper was to blog it, and to email the key opinion-brokers such as Steve Rubel, Shel Holtz, Neville Hobson, Elizabeth Albrycht, Rok Hrastnik and Guilllaume du Gardier. We also talked to our good friends at New Media Knowledge, e-Consultancy and Net Imperative. The cash budget was zero (although it helped to know who the opinion-brokers were).

Prior to the publication of the white paper the “Search is Brand” search on Google turned up citations like “Yahoo search is brand new” in about 50-60 results. As of Thursday 11th August 2005 there are 846 results. 90% are references to our white paper. This process has taken six weeks. References are growing geometrically - when we checked on Monday the number of results was 737.

Our experience suggests that if you if you identify a unique idea or “meme” and decides you want to colonise it, blogging is a highly effective way to do so.

Conversely, although the white paper received coverage in PR week and Campaign, the influence of coverage in these publications was far weaker, partly because the journalist, writing in an offline format, didn’t link to us or use our exact terms, and when the article was published online, it tended to be cut and pasted, again without links or keywords.

To spell out our conclusions (at the risk of stating the obvious):

1) blogs offer you total control over your message and keywords;

2) blogs reward other bloggers for reusing your words and keywords because a) it is easier to link to something than copy or paraphrase it, and because b) linking offers a fellow blogger a chance to associate their comment with the original material and boost their own traffic;

3) off-line media tends to weaken your message because a) they paraphrase it, and b) they choose keywords reflecting their own agenda, and because they are off-line;

4) the combined effects of a number of different sites using the same keywords to link to your site powerfully impacts your Google algorithmic ranking on the message and keywords you have chosen.

Chris Edwards has published a long and thoughtful piece about our Search is brand white paper.

He makes one point that calls for a clarification - yes the stats were UK only. We are planning a wider survey in due course.

He also makes two points which call for a response:

1) the report counted everything that was might be seen as damaging to the brand as “negative”. He mentions the fact that a search on Dairylea brought up a reference to an historic product recall. This is true. We assumed that anything that would diminish the public perception of the brand was negative.

2) Chris questions whether search engine optimisation and blogging are enough when a brand is deep in the mire, as in the case of the Kryptonite lock. We would answer that the Kryptonite case and the recent issues with Land Rover instead demonstrate a couple of important things:

a brand under attack in the blogosphere has to respond early. If a blogger has raised a valid problem, then it is important not to ignore the problem and hope the blogger will get bored and desist. Blog attacks are public and remain on search engines forever. If the problem is a real one, others will find the attack and link to it.

the brand has to address the problem. There is no point in planning a sophisticated Google-bombing, SEO-ed up to the gills, widely syndicated response that doesn’t take away the original pain. Only if action has been taken on the problem, and the company has publicised that action, will the links go to the new source of authority. For example the “how to get a cash refund for my Kryptonite lock” page.

We would argue that SEO and blogging are both useful tools in making a corporate response public. If there is a problem that effects a small number of consumers, then the brand has nothing to lose by creating a well-indexed page which comes up on Google when a description of that problem is entered as a search term, and making sure that all stakeholders in the company know about that page. Ideally it would be part of an FAQ.

Blogging is an informal way of dealing with issues major and minor and getting the word out. “We screwed up. We have decided to give you all your money back or offer you a free upgrade. Here is what you do. Email us here if you are stuck. By the way, we are building a better version of the product applying the lessons of this experience.” This is an approach that is much more likely to win back lost trust and loyalty than putting out a press release written in legalese, or Google-bombing your detractors.