Defending the brand in a social media universe

It's an image that would make any marketer feel a little queasy.

There was Luka Magnotta, accused of the brutal slaying and dismemberment of a Chinese exchange student in Montreal, holding a bottle of Labatt Blue. Any company would shun the association with an alleged killer. But in its rush to find a solution, Labatt Breweries of Canada created its own problem.

After this paper reported on Tuesday that Labatt made legal threats against the Montreal Gazette, which published the photo in a story about Mr. Magnotta, in an attempt to have the image replaced, the story took off. Discussions on Twitter and Facebook erupted over Labatt's public relations misstep. And the brand became associated with yet more distasteful content: People used the Twitter hashtag #newlabattcampaign to post fake advertising slogans for the beer, tied to the grisly murder.

The case is not just a social media marketing blunder. It illustrates the speed of scandal in a Twitter and Facebook age. Crowds of commenters are lightning-fast to jump onto anything controversial. That means bad news stories for brands spread faster than ever before, and the damage is more widespread. And that raises questions about how this new world has changed the process of marketing in a crisis.

"The days of spin doctors being able to spin a story into a corner they're most comfortable with, are over," said Tony Chapman, founder of ad agency Capital C. "What Labatt did inadvertently is they dumped 10,000 gallons of kerosene on this in a wind fire."

The brand fell victim to what has been dubbed "The Streisand Effect" – named for a 2003 incident when Barbara Streisand sued to keep a photo of her California home off the Internet, and caused an exponential rise in viewings of the image. But Twitter did not exist in 2003; by today's standards, Ms. Streisand got off comparatively lightly.

"It's the customers who manage communications now, so everything is moving at the speed of sound," said Mat Wilcox, chief executive officer of Toronto-based Wilcox Group, which handles crisis marketing. "We used to call it the nine-day story. Now, if it makes it one day, that's impressive. People are inundated with information."

But the very element that makes scandals go viral for companies also raises a question: As quickly as the hive starts buzzing around a scandal, is it also quicker to dissipate? Will the damage last? In the first day the Labatt story broke, social media analytics service topsy.com logged 1,718 mentions of the #newlabattcampaign hashtag, and that's just counting "significant" mentions – those that had been retweeted, or contained a link to another Web page. The total number was likely far higher. By the second day, however, the number of significant mentions had dropped closer to 500, and continued to fall.

But Ms. Wilcox and others question Labatt's strategy, which has been to keep its head down and hope the problem goes away on its own. The company released a statement following the Twitter backlash, saying it would not pursue the matter and that it respects The Gazette's position. But it does not appear to have much of a corporate presence on Twitter and did not respond to the criticism.

Even when the conversation dies down, however, it can still stick with consumers.

In January, McDonald's Corp. asked Twitter users to talk about their "#McDStories." Instead, many slammed the restaurant chain for the perceived poor quality of its food. While the "bashtag" insults eventually died down, the brand perception has not. Social media have kept the conversation going.

This week, McDonald's Canada is trying a different approach: It launched the yourquestions.mcdonalds.ca website to directly answer questions about food quality. Consumers log on to the site through Facebook or Twitter to ask questions, and can post the company's answers for their friends to see. Every question will be answered, including critical ones, as long as they do not contain "profanity," said McDonald's Canada chief marketing officer Joel Yashinsky.

"As conversations take place over the Internet and social media … those myths take place everywhere," he said. "We felt it was important to address them directly, and to open ourselves up in a different manner than we have in the past."

The classic case study in how to manage a crisis on social media is Domino's Pizza Inc., which in 2009 faced a public relations nightmare after employees at one franchise location posted a video on social sharing website YouTube of one worker soiling the food they claimed was being sent to customers.

"If there was a lesson for us, it was the power of social media," said Domino's vice-president of communications, Tim McIntyre, who helped in handling the backlash.

Domino's posted a video on YouTube in which chief executive officer Patrick Doyle apologized for the incident. The company's ad agency, Crispin Porter + Bogusky keeps track of the online buzz around its client. After the employees' video was posted, that buzz spiked, negatively. When the CEO's video went up, they saw an immediate improvement in what people were saying about the company.

"Those who knew about it appreciated our candour," Mr. McIntyre said. Domino's did not emerge unscathed: Same-store sales dropped 1 per cent that quarter, where the company had forecast 2-per-cent growth. But the numbers recovered that year, and Mr. McIntyre believes it could have been worse.

Eight months later, Domino's launched its new pizza recipe with an unconventional campaign: a video featuring negative comments about its recipes on Twitter and in focus groups. The brutal honesty was used to announce Domino's new recipe, as a direct response to customer feedback. Mr. Doyle once again starred in the video. And the company posted it on YouTube.

Labatt and others should learn a lesson from Domino's social media vigour, experts argue. Digital scandals may come and go, but a company that buries its head in the sand is ignoring the very lasting damage that can be done if it refuses to respond to consumers on their own level today.

"Everything marketers do with a brand has to add value. This [Labatt scandal] has stalled that progress," said Alan Middleton, a marketing professor at York University's Schulich School of Business. "There's no right for brands to be iconic. They can disappear. This won't kill the brand. But brands get killed by the death of a thousand cuts."