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Facebook Faces Reputational Impact

Read the full article published by CorpComms on 23/4/18

Facebook has been ‘building a global community that works for all of us’ since the mid noughties.

It followed home desktop computers into our households, and an entire generation grew up replacing the concept of meeting up with ‘checking in’, and formalising fall-outs with ‘unfriending’ (a term that officially entered the dictionary in 2009).

Revelations last month that 50 million Facebook profiles had been harvested by Cambridge Analytica, without permission, in a major breach of data, to build a system that targets voters with personalised political advertisements based on psychological profiling, have continued to affect Facebook this week.

Only today (Friday 6th April), it was reported that the Facebook scandal has hit 2.7 million in the EU.

The scandal has caused a media storm and widespread public anger.

So – What’s the damage?

Populus has analysed Facebook’s reputation using our proven Populus Reputation Model, pre-crisis (as measured at the end of 2016) in comparison to post-crisis levels.

In 2016, their reputation was not particularly strong, but equally, it was certainly not poor.

Post-crisis (as measured in March 2018) Facebook’s reputation has not only decreased significantly, but it has decreased to a greater extent than witnessed before.

Alongside this decrease, Facebook’s intensity score has increased. This means that not only do people have a poorer view of Facebook, but their feelings about it are stronger.

The full chart can be viewed below:

 

Like Uber and Barclays, when faced with their respective crises, Facebook’s reputation Intensity Score has increased since news broke of Cambridge Analytica’s data scandal. Facebook is facing the biggest reputational hit since it was founded, and it looks increasingly likely that future laws and regulations around privacy could potentially come about as a result of the scandal.

The chart below compares the Reputation Credit Scores and Intensity Scores both pre- and post-crisis for Uber, Barclays and KFC, alongside Facebook’s, for comparison.

The Barclays whistleblowing scandal saw the retail bank’s Reputation Credit Score fall, while its Intensity Score increased. Facebook’s trajectory is not dissimilar, with the public feeling stronger, and more negatively towards the organisation post-crisis too.

KFC’s chicken crisis – which forced the fried chicken chain to close more than half of its outlets after delivery problems meant they ran out of chicken – played out differently. While its Reputation Credit Score also slid, the impact was less severe than for others and, if anything, people’s feelings actually softened

Populus has previously written about the KFC approach to corporate reputation in a crisis. KFC demonstrated the three key elements to a good response by offering a clear, full apology, owning the issues and committing to preventing a repeat using regular, clear communication. This may help explain KFC’s Intensity Score decrease.

Facebook, however, has seen a marked decline in its Reputational Score.  And its trajectory is not the only reputational cause for concern.

Populus took a closer look at what was driving Facebook’s intensity scores, segmenting the public in terms of Facebook users, general public, those who considered and then decided against deleting their Facebook accounts and those who are still mulling whether to do so.

Those aware of the Facebook scandal (and our research suggests that this is as high as 79 per cent of all surveyed) have stronger feelings about the organisation, than the general population. The strongest negative views are felt among those who are still considering deleting their Facebook accounts.

The ripple effect

The significance of the reputational damage mounts when we consider the real-world repercussions of the accusations that are already in motion.

Zuckerberg has been forced to defend the company to senators. The company’s shares have fallen dramatically. Allegations are surfacing that messages sent by Mark Zuckerberg on Facebook Messenger have been deleted from recipients’ inboxes. Facebook may appear to have its roots in the digital world, but the repercussions occurring are taking place on a very real-world level.

The impact also has the potential to hit other similar companies. Around a quarter (27 per cent) of those surveyed have also reviewed how their data is collected by other social media and apps, suggesting the reputational impact could be felt across the whole category.  We have seen this in other sectors, such as food and beverage where, for example, when Starbucks’ tax affairs was found to also impact Costa.

Reputation in the age of the data-savvy user

That one third (36 per cent) of those surveyed are currently reviewing how their data is collected and used by Facebook is particularly worrying when you consider the sheer number of those who use the platform.

Facebook’s saving grace may arrive in the form of responsibility. Our research shows that the majority of the public still view data as something that individuals are accountable for, and not the organisations. More than half (58 per cent) believe it is the responsibility of Facebook users to educate themselves on how their data may be used. This societal perception could be a lifeline for Facebook.

But 77 per cent of the Facebook users surveyed are against paying £5 a month to ensure their data is not captured. So, although outrage is currently high, the idea of data as a currency for exchange doesn’t appear to have resonated with the public.

What next?

While Facebook hasn’t done anything strictly illegal, it’s been vague at best on users’ data – and in these unprecedented digital times, no one quite knows how this one will play out.

The fact that more than one third of the public have reviewed how their data is collected and stored by Facebook and other social platforms, such as Instagram and Linked, signals a potential change in gear regarding how they view issues around data protection. We know that Zuckerberg has publicly taken ownership of the matter and acknowledged its severity

Will people start to use and treat their data differently? Will third party apps be put off? Will Facebook lose revenue from advertisers? Perhaps. But a wider shift is also at play.

A picture is being painted of an increasingly data-aware public. Public perceptions can bend slowly, over time, into new and unprecedented shapes. The question for Facebook is, what of this new data aware audience? And what shape will Facebook, and others like it, need to adopt, for a more data-aware world?

Facebook posts can be deleted, but the reputational impact of these allegations, and the actions they prompt, cannot.

Methodology

The Populus Reputation Measurement approach has been constantly developed over 13 years, and is a proven series of tools, techniques and analysis which allows reputation to be understood, influenced and improved. It combines robust research with analytics, benchmarks, actionable advice and strategic counsel.

Populus interviewed a nationally representative sample of 2,016 UK adults aged 18+ between 27 and 28 March 2018. Data were weighted in order to be demographically representative of adults in the UK. Populus is a founder member of the British Polling Council and abides by its rules. Further information at www.populus.co.uk

View the full data tables here.

 


Ben Loyd

Ben is a corporate reputation expert focused on managing client planning and strategy at a senior level, developing and nurturing client relationships, and helping clients identify how reputation can inform and advise business decisions.

Prior to joining Populus as Director of Corporate Reputation, Ben led a team of 25 on global reputation and research as Head of Millward Brown’s Corporate Practice. He has a wealth of experience in leading reputation teams and tackling client reputation challenges.


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