A Timely Refresher on Corporate Credibility and the Web

AS THE Internet increasingly becomes a major influencer of public perceptions, corporations are under pressure to manage their reputations online.

But sometimes companies’ efforts to influence public perceptions can lead them into gray areas where poor judgments can have serious consequences for their reputations.

In other cases, seemingly inconsequential decisions can be interpreted negatively. Even small details can tip the credibility scales against a company depending on an individual’s prior experiences.

Covert websites and blogs 100% bad

Of course, the worst Web deceptions are the ones that make the headlines. Think phishing sites designed by criminals to steal identities or money from their victims, or spam sites set up to deceive people into clicking on revenue-generating text ads.

For corporations, the nearest thing to a phishing or spam site is a fake website or blog. These are sites that are covertly sponsored or paid for by corporations with the specific purpose of distributing positive information about the company or its products.

Covert websites and faux blogs should be avoided at all costs. Investor relations departments, who have a special interest in protecting a company’s communication credibility, need to be especially alert to the dangers.

IR people should be proactive inside their companies to ensure that other departments understand the risks and potential consequences if management’s credibility is called into question.

Blogs are especially dangerous territory for companies that aren’t genuinely interested in engaging in an open and transparent debate with their stakeholders. Several companies, including Coca Cola for it’s fake Zero Blog and McDonalds for its fake Lincoln Fry blog, have suffered scorn for using fake product-focused blogs to spread their message.

However, the risk of fake sites or blogs is highest when they are meant to enhance a corporation’s reputation. Whether intentional or even unintentional, once the deception is discovered the company usually ends up in a worse position than when it started.

Wal-Mart and its public relations firm Edelman recently found themselves embroiled in controversy over a blog which failed to fully disclose its connections to the company. The blog, which chronicled a Wal-Mart-sponsored drive across America in an RV by a couple connected to Edelman, offered what Business Week called a “relentlessly upbeat” view of the company.

The “relentlessly upbeat” company-sponsored Wal-Marting Across America blog’s funding sources were not clearly disclosed.

The lack of disclosure about the ties between the paid bloggers, Wal-Mart and Edelman caused a storm of protest from public relations practitioners and others. The PR firm, which had positioned itself as being a leader in using blogs for public relations, acknowledged its mistake, while the company suffered another blow to its beleaguered reputation.

Corporate campaign sites hard to get right

Of course, companies don’t have to engage in explicit deception to lose credibility on the Web. They just have to give the appearance of being less than genuine in their motives.

This sometimes happens when companies launch special campaign websites designed to communicate their positions on contentious or topical issues such as corporate responsibility, business turnarounds or even hostile takeovers.

These sites are difficult to execute without the company coming across as being overly promotional. Instead of helping to improve a firm’s reputation they can put people off and cause them to trust the company less.

Sites that encourage debate amongst opinion leaders and the public by inviting comments or providing discussion forums typically have more credibility than sites that do not allow debate.

Special-purpose and even ordinary websites that provide access to a range of opinions from highly regarded third-parties such as the major media, independent analysts or even competitors are more credible than those which provide only the company’s opinions.

Ford’s Bold Moves website, Chevron’s Will You Join Us site and Allianz’s dropping knowledge initiative are all good examples of such sites. While not as raw and unfiltered as most blogs, they nonetheless are effective communications vehicles. In part this is because there is no attempt to hide who is behind them.

Company-sponsored campaign sites can be credible when they incorporate outside perspectives. Ford does this effectively on its Bold Moves website.

Prominence and precision key to credible user experiences

While they certainly shine a spotlight on the issue of corporate credibility, you don’t need blogs and special-purpose websites to enhance or hurt your company’s reputation.

Your corporate website is often the first place people will turn to when they are looking for information about your company. The experience they have on your site can either reinforce your company’s reputation or detract from it.

Although there is a complex interplay between design, navigation, usability and content, a major driver of credibility perceptions on investor relations websites is the prominence of information.

Website users often will interpret your company’s intentions, or trustworthiness, based in part on how you present information on your website. Prominence suggests the company is eager to provide the information, whereas a lack of prominence can be interpreted as reluctance or even deception.

Perhaps the most important credibility driver for investor relations is the precision of the content itself. Vague or incomplete disclosure, either by design or accident, can undermine management’s credibility.

Plain language that avoids jargon and “marketese” adds credibility. As does information or writing that can be personally ascribed to an authoritative individual, such as a CEO.

Credibility is won and lost every day

My objective with this article has been to refocus attention on the importance of maintaining a credible web presence in light of recent developments.

Building and maintaining a credible web presence is hard work, not magic. It is something that business communicators of all types, especially investor relations communicators, must work at every day.

IR Web Report

IRWebReport.com was founded by Dominic Jones in February 2001 to promote best practices for online investor relations communications. In July 2010, the site had more monthly visitors than IR Magazine and IR Alert combined, according to Compete. We would like to thank our readers for their continued support and interest.