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At Home with a Revenge Porn Mogul- Meet Scott Breitenstein 0

At Home with a Revenge Porn Mogul

Breitenstein, 45, is the owner of ComplaintsBureau.com, CheatersRUs.com, ReportMyEx.com and STDRegistry.

Scott Breitenstein has been called an “internet terrorist,” “the worst man on the internet,” and worse. His work has left behind an Everest-size pile of broken relationships, destroyed reputations, and ruined lives. He’s been targeted by lawsuits, court orders, vigilante hacker groups, and the Department of Homeland Security, all for his role in one of the internet’s darkest trades: hosting “revenge porn,” nude photos and videos posted online non-consensually, often by disgruntled exes.

Breitenstein, 45, is the owner of ComplaintsBureau.com, ReportMyEx.com and STDRegistry.com

ComplaintsBureau.com is a site that hosts user-submitted grievances of all types. He first encountered the site in 2005, after getting ripped off while trying to buy a flat-screen TV from an e-commerce site. Searching for other people who had been scammed by the same site, he found ComplaintsBureau, where he posted a negative review of the business. A week later, under mysterious circumstances, the TV seller’s site went offline.

“I thought that was cool,” Breitenstein told me, while driving me around his Dayton, Ohio neighborhood several months ago.

Breitenstein never got his money back, but he did acquire a taste for digital vengeance. He emailed the owner of ComplaintsBureau and asked if he’d be willing to sell the site. The owner agreed, and soon, Breitenstein, a plumber and electrician who had dabbled in web design and computer repair, taught himself HTML and PHP and set about redesigning and expanding ComplaintsBureau. His vision was to build a kind of anonymous Better Business Bureau, where customers who had been scammed or ripped off could blow the whistle on predatory businesses.

Breitenstein’s ComplaintsBureau was a bare-bones site, but it had something the Better Business Bureau didn’t have: excellent search engine optimization, which often placed ComplaintsBureau’s posts on the first page of Google results for a given business. Customers searching for that business’s website would find a ComplaintsBureau post instead, and would often be scared off before their first purchase.

“I liked it because it could put the bad guy out of business,” Breitenstein said. “Everybody saw how powerful it was.”

Breitenstein sitting

 

Scott Breitenstein in his backyard

In the first years of its existence, ComplaintsBureau’s users inveighed against large corporations like Best Buy, Samsung, and United Airlines, along with local businesses like car dealerships (“sold me a piece of junk!” reads one complaint) and hospitals (“I was treated like dirt at the Emergency room”). Their complaints were largely unverifiable, frequently profane and often personal, singling out individual employees by name. Unlike sites like TripAdvisor or Yelp, Breitenstein didn’t allow business owners to respond to the complaints made against them, even if they were false or defamatory.

“Everybody saw how powerful it was.”

These complaints carried real weight, thanks to Breitenstein’s SEO work. “One illegitimate complaint ruined a whole quarter,” Susan DiMezza, a Pennsylvania fashion boutique owner, told CBS News in 2011, whose sales dropped by 75% after a disgruntled tenant in a real estate dispute posted a negative review of her business on Scamfound.com, another Breitenstein-owned website.

Predictably, businesses hated ComplaintsBureau, and Breitenstein was soon deluged with takedown requests. He ignored them all. In his mind, bowing to pressure from businesses would create an unfair playing field, and throw all of the site’s complaints into question. To avoid these headaches, he created a firm no-takedown policy. Once a complaint had been posted, he vowed it would stay.

“If we put on there that we’ll take things down, then everybody will start saying, ‘That ain’t true, that ain’t true,‘” he said. “And then why have a complaints site?”

***

Several years ago, ComplaintsBureau received a more lurid kind of complaint: a user posted nude photos to the site, of someone the user said was his cheating ex-girlfriend.

Breitenstein, who operated a small fleet of scummy websites in addition to ComplaintsBureau, was no stranger to cheating allegations. Among his sites were ReportMyEx.com and CheatersRUs.com—both sites where jilted lovers could go to name and shame their exes.

But those sites allowed only text complaints. Photos were a different thing altogether. And days after the revenge porn post went up on ComplaintsBureau, he noticed that the traffic to the post was dwarfing everything else on the site. The size of his monthly payments from Google AdSense, a program that allows site owners to place pay-per-click advertising modules on their site, ballooned from $200 a month to more than $1,200.

“When I started seeing the money come in, I was like, ‘Wow, I don’t even have to work anymore,’” Breitenstein said.

Unbeknownst to him, Breitenstein had lucked into a booming business. The prevalence of nude photos, especially among younger people (44% of teens have sent or received a sexually explicit text, according to the Pew Research Center) and the rise of amateur porn sites has created a robust market for stolen nudes. One notorious revenge porn site, IsAnyoneUp.com, reportedly racked up 30 million views a month at its peak.

In the past several years, dozens of states have passed laws making it illegal to post revenge porn. But hosting a revenge porn website is still technically legal, thanks to Section 230 of the Communications Decency Act of 1996, which shields websites from liability for content published by their users. (It’s the same law that protects Facebook from being sued when one of its users posts something obscene or copyrighted.)

Still, the revenge porn business has gotten harder in recent years, thanks to the work of advocacy groups and the support of large tech companies. Over the last year, Facebook, Twitter, Instagram, Reddit and other social networks have expressly prohibited revenge porn, and Google and other search engines have instituted removal policies that allow victims to get their non-consensual nudes de-listed. Most of the big revenge porn sites have been shut down, either by hosting providers or due to an operator’s legal troubles. (Hunter Moore, the founder of IsAnyoneUp.com, was recently sentenced to 2.5 years in federal prison on hacking conspiracy charges related to the site.)

ComplaintsBureau.com homepage

ComplaintsBureau.com homepage, on an average day

For Breitenstein, the potential reward of distributing revenge porn was worth the risks. So he created a new section of the site to house these posts, called “Revenge Lovers.” And he watched the clicks roll in.

Breitenstein also devised a dastardly strategy to extract more money from revenge porn victims. Often, victims who appeared on the site would file copyright claims for their nude photos under the Digital Millennium Copyright Act, hoping to get them taken down. Breitenstein told these victims that if these DMCA takedown notices weren’t followed by the rest of the DMCA complaint process—a lengthy endeavor that can involve registering a work with the U.S. Copyright Office and providing voluminous information about the photos being claimed—he would sue them for $10,900 in “defamation” costs.

On his site, Breitenstein made this threat explicit:

Periodically, we receive thousands of DMCA takedown requests. Because of people not liking what they read on the site, they attempt less-than-effective ways of trying to get them removed…If you file a DMCA request, you must follow through completely to the very end of the process, otherwise, complaints bureau will file a counter notice to all major search engines and hosts, to have it restored. We will then bill you for $10,900.00.

As brazen as the practice of penalizing revenge porn victims for defaming him was, it worked; Breitenstein collected tens of thousands of dollars in settlements from terrified women, who were scared that he would report them to a collection agency if they failed to pay.

With this revenue model in place, Breitenstein was no longer just a crank with a complaints site. From his home in Dayton, he had become a revenge porn mogul—a successful bottom-feeder in the digital economy.

***

I first spoke to Breitenstein last year, after hearing about ComplaintsBureau and emailing him at an address listed on the site. He’d never given an interview before, and he was initially hesitant. But we spoke again and again over a period of several weeks, each time tiptoeing further into the details of his work, and eventually he began to open up. He had a craggy baritone voice that sounded like a sentient pack of Marlboros, and he spoke of his work as if he had nothing to hide.

Despite the opprobrium he’d faced, Breitenstein was proud of his work with ComplaintsBureau. He even characterized the revenge porn as an ethical form of watchdogging. If a woman had posed nude for a man in the past, he reasoned, it was a red flag that a future partner deserved to know about. In his mind, it was all protecting good people from bad people—just as it had been in the beginning, with the TV.

“I’m a consumer advocate,” he told me. “We’re helping a lot of people.”

Eventually, I asked Breitenstein if I could visit him and his family. To my surprise, he said yes. I arrived in Dayton with a camera crew a month or so later, and spent two days talking and filming with him, his family, and Preston Lawson, a moderator for his site. (You can see the video at the top of this page — it’s from the first episode of our new TV series, Real Future, and it’s a doozy.)

“I’m a consumer advocate. We’re helping a lot of people.”

Breitenstein lives and works at his home in East Dayton, a rough neighborhood in a city that never really recovered from the industrial collapse of the 1970s. It’s not an inviting house, not least because of the PRIVATE PROPERTY and BEWARE OF DOG signs out front, and the half-dozen security cameras installed by the front door. (Scott, who claims to have been shot at once by an angry ComplaintsBureau victim, is understandably a bit paranoid.)

Despite his revenge porn earnings, Breitenstein lives in the manner of someone who is barely scraping by. His house is full of garbage and dilapidated furniture, and his office, a room off his porch, is a mildewed space with tangles of miscellaneous cords and plastic bags full of empty cigarette boxes.

Later, when I showed photographs of Breitenstein to some friends, they remarked that he looked “exactly like you’d expect.” And it’s true that Breitenstein’s graying mullet and death metal t-shirts give him the appearance of a sketchy character. But over the course of our visit, I came to understand something about Breitenstein’s psyche, and the moral framework he’d used to construct his revenge porn enterprise.

And I was as surprised as anyone when he decided to shut it all down.

***

Breitenstein house exterior

Breitenstein’s home, and ComplaintsBureau’s headquarters. His son, Scott Jr., sits on the front steps.

Revenge porn, as a standalone internet business, dates to about 2008, when porn sites began receiving complaints of videos that had been posted without the participant’s permission. The provenance of these stolen videos only made them more appealing to viewers, and soon, sites like RealExGirlfriend.com and IKnowThatGirl.com were popping up to host stolen caches of revenge porn. (The URLs of these early sites weren’t an oversight—according to estimates by the Cyber Civil Rights Initiative, more than 90% of revenge porn victims are women.)

It’s not easy to keep a revenge porn site online. Despite the legal protections of Section 230, most web hosting providers want nothing to do with stolen nudes; ComplaintsBureau was dropped by a number of American providers before Breitenstein moved the site to a French hosting company last year. The site is also a constant target of vigilante hacking groups, and Breitenstein claims he was attacked by Anonymous, and shut down by the Department of Homeland Security last year, after an ISIS execution video was posted on the site.

“We were ordered to take [the ISIS video] down,” he said. “But we never do.”

The government isn’t the only entity taking aim at Breitenstein. Adam Steinbaugh, a Los Angeles-based lawyer who specializes in revenge porn cases, believes that Breitenstein is obscuring the source of some of the site’s content, some of which he claims was copied and pasted from other revenge sites, and some of which he believes Breitenstein and his friends have written pseudonymously. His hunch that Breitenstein is not, in fact, simply hosting revenge porn and other types of damaging content, but is actively creating it—which, if true, could fall outside the legal protections of Section 230.

“If he’s just making it up, then he’s absolutely liable for what he does, and Section 230 will not apply,” Steinbaugh said.

According to Steinbaugh, shortly after he threatened to write about Breitenstein’s revenge porn business on Twitter, a false complaint about him appeared on ComplaintsBureau. The complaint, which has since been deleted, purported to be from Steinbaugh’s ex-landlord and called him a “deadbeat tenant” with a litany of prior convictions. (Breitenstein denies ghost-writing any posts.)

Breitenstein moderates ComplaintsBureau himself, along with his friend Preston Lawson. Together, they spend their days sifting through requests from users asking to have posts taken down. And when Lawson and I sat down on Breitenstein’s front stoop to talk, he appears slightly conflicted about his work with the site. He said that he often receives e-mails from women who claim that they were underage when their nude photos were taken. These photos, he said, he immediately removes from the site, despite the no-removal policy.

“I don’t tolerate it,” Lawson told me about the prospect of hosting child pornography. “Me being a Christian anyway, that’s not right.”

Breitenstein site

 

Breitenstein in his Dayton, Ohio office

Breitenstein takes a tougher line. When he gets a removal request from someone claiming to be underage, he requires them to send him concrete proof of their age before he’ll consider removing a post.

For Breitenstein, maintaining a hard rule on removals is part of a years-long mission to expose cheaters and scammers. This quest, though, has real, grave consequences for people—consequences I’m not entirely sure Breitenstein fully understands. While talking in his office, he told me about a young woman whose nude photos were leaked to ComplaintsBureau by her ex-boyfriend. The woman, Breitenstein said, had attempted to get the post taken down. But ComplaintsBureau’s contact form was broken, and he never received the messages. The embarrassment over her revenge porn caused the woman to spiral into a depression, and she ultimately committed suicide.

I asked Breitenstein if he regretted letting that woman’s nude photos stay on ComplaintsBureau. He said that he might have taken them down, if he had known the woman was going to harm herself. But he maintained that he wasn’t at fault.

“We never received an email until it was too late,” he said.

***

On the last day I spent with Breitenstein, I gave him a surprise.

Days before our interview, I’d asked Annmarie Chiarini, a victims services director with the Cyber Civil Rights Initiative (and a victim of revenge porn herself), to record a short video addressed directly to Breitenstein. I’d hoped that Chiarini would convey to Breitenstein exactly what made his work so harmful to the people who ended up exposed on his site. I cued up the video, passed him my MacBook, and pressed play.

“The cost you’re afflicting on society goes well beyond victims,” Chiarini told Breitenstein. “What you’re doing may or may not be illegal, but ethically it is corrupt. Anybody who provides a home for people to become the sexual entertainment of others is a dangerous sexual predator.”

She went on, outlining the legal actions that had been taken against revenge porn distributors. I watched Breitenstein’s face intently as he viewed the video; and to my surprise, he didn’t look angry or defensive. He sat quietly as the video ended, staring off into the distance. And then, after a minute or so of silence, he said something I hadn’t expected to hear.

“You know, she might be right.”

Breitenstein is not a stupid man. But his understanding of revenge porn’s social fallout was puzzlingly simplistic. In all the hours we’d talked, he never expressed sympathy for women who had their nude photos posted to his site, but he also didn’t express malice or ill will toward them. He just sounded like he hadn’t really thought about it. To him, the revenge porn victims who filled his inbox with takedown requests just seemed like an administrative headache to be dealt with, not a series of people feeling real pain as a result of a crime having been committed against them. He’d never actually been face-to-face with a victim of revenge porn before.

But Chiarini’s video seemed to affect him. For the rest of our time together, he had a glassy, distracted look on his face, and he kept wondering aloud if he should stop hosting revenge porn, or change his removal policy somehow to make it easier for victims to get their photos taken down.

“A lot of people’s on the site that doesn’t necessarily need to be on there,” he said.

As I headed home that day, I felt pretty cynical about Breitenstein’s supposed enlightenment. Maybe he’d just been performing for the cameras. Maybe nothing about his site would change, and his consideration of his victims’ feelings would be fleeting.

But two weeks after I returned home from Dayton, I saw that a new message had been posted to the top of the ComplaintsBureau’s terms and conditions page. It read:

To all patrons and individuals, familiar with Complaints Bureau.com. The website was recently the subject of a documentary film which will air on the Fusion Network with host Kevin Roose, in a few months. We, as site operators, now fully understand the damage and negativity that “Revenge Porn” can cause. We are now removing All/Any/Every “Revenge Porn” and/or sexually related material, from the website. We are also banning it to ever be allowed, at any time, in the future. If you are caught trying to post this type of material, you will be banned immediately and permantly [sic], without notice. We are removing this material currently. It takes a considerable amount of time and effort, to remove all of it. Please, be patient with us, as there is a large amount of this type of material present on the site, currently. Slowly, but surely, though, it will all be gone.

Sure enough, within a couple of weeks, the entire “Revenge Lovers” section of ComplaintsBureau had been deleted, and its contents, which Breitenstein had spent so much time carefully optimizing, were gone. Hundreds of people who had been featured on the site had gotten their search results cleansed at last. Of course, it’s too late to restore these victims’ lives to normalcy, or heal the wounds caused by the crimes against them, but at least the evidence trail would be scrubbed.

Make no mistake: Breitenstein’s reformation has only been partial. ComplaintsBureau is still online, and he still makes money from ReportMyEx, STDRegistry, and other sites that traffic in unsubstantiated and defamatory complaints. But his decision to remove revenge porn from ComplaintsBureau did have real, meaningful consequences. Breitenstein told me that his monthly ad revenue fell from $1,200 to less than $200 as a result of pulling down his revenge porn.

“It’s the right thing to do, but it’s a heck of a loss.”

“If ComplaintsBureau doesn’t pick up, we’re going to have no choice but to close it,” he told me. Removing revenge porn, he said, had been “the right thing to do, but it’s a heck of a loss.”

He said that his decision to remove revenge porn from the site had been a direct result of Chiarini’s video, which caused him to think about revenge porn from the perspective of the people who were featured in it against their will.

“I was looking at that laptop, and [Chiarini] was asking certain questions,” he told me later. “People hadn’t really asked those types of questions before. And there was some stuff she said that got in my head.”

Breitenstein’s about-face on revenge porn isn’t nearly enough to redeem his overall enterprise, or comfort his victims. But it’s an unexpected result of a story that began as an attempt to interview someone I thought would be incapable of empathy. And it’s enough to make even a cynic believe that change might be possible, even for the internet’s worst villains.

 


This story was adapted from Episode 1 of Real Future, Fusion’s new 16-part documentary series about technology and society. To be notified about new episodes, subscribe to the Real Future newsletter below.

Original post may be found here – http://fusion.net/video/252712/complaints-bureau-revenge-porn-mogul/

Just make it go away 0

Just make this GO AWAY!!

This is probably how you feel.

Reputation Management business

Reputation Management business

I actually had one client who likened the negative publicity to a giant albatross hanging around his neck. He had over 30,000 satisfied customers and less than five complaints. Well, the few who complained found a forum where they could get together and post their rants. Unfortunately, this forum was showing up in Google’s top 5 when searching for information on his company. He is actually the second client to liken the negative publicity he has received to a giant albatross.

Perhaps you feel the same way? Well, naturally the common reaction is “Just make it go away!” And it makes perfect sense that anyone dealing with this particular struggle would feel this way. They have seen it damage their reputation and/or even their organization’s bottom line. When they are about to close a deal and the prospect gets cold feet because of a negative post they saw on the internet than they realize that this situation can not be ignored.

So, they connect with us and want the problem solved ASAP.

The problem here is that the client most likely does not have an adequate understanding of the algorithms that make up the Google search results and the process involved in adjusting the list of web sites that come back in a particular search query.

So, I decided to write this article and explain it in a non-techie sort of way.

Let’s say you just bought a home in the country on a quiet neighborhood street. The old house sits on over 2 acres. The backyard is like a sanctuary filled with big oak trees, magnolias, and a few fruit trees scattered about. One day you are strolling around in your backyard and you spot one of your new neighbors trying to get your attention.

“Hey!” yells the man in tight blue jeans, and a section of his belly poking out under his t-shirt.
“Can I help you?” you ask politely.
“That tree you have right there!” yells the man as he points his hairy arm in the direction of a magnolia tree near the border of the property.
“What about it?” you ask.
“It’s blockin my sunlight in the evening and I can’t see well enough to work on my truck!” shouted the man.
“Well, why don’t you just use a flashlight?” you ask politely even though you are a little agitated by the encounter.
The man shrugs his shoulders and gives you a look as if you are one of the five most unreasonable people on planet earth.
“Why don’t you chop down your $#%^ tree!” he yells.

At this point you realize that this conversation will go absolutely nowhere and so you decide to head back inside. You slam the sliding glass door frustrated by the absolute shortfall of the human race. The next morning you wake up to your normal routine. You grab your slippers, cup of coffee, and head outside to sit on your back porch and read the newspaper. You settle into the old rocking chair and place your feet on the white porch railing. You take a deep breath and jerk open the newspaper to the sports section. But as you do, something out in the yard has caught your eye.

“What the #$%&?” you mutter as you lean forward and squint in the direction of the neighbors house.
To your horror you see a 4 x 8 sheet of plywood spray painted white and hanging a few inches on the other side of your fence. In giant red letters it reads – “GO TO HELL!”

You quickly set down your cup of coffee on the porch rail but miss and it spills all over your slippers. You yell “Son of a!” and march strait for the neighbors house. You grab the top bar of his crooked chain link fence and are about to yell, but you think for a moment, remind yourself to be calm, and take a deep breath.
“Excuse me sir,” you shout in a polite voice.
“Excuse me sir,” you shout again.
Suddenly the back door screeches open.
“Hey Jerk,” says the man with the same pair of blue jeans on as yesterday but missing his shirt.

“Listen, I think we got off to a bad start. I just don’t quite see what the big deal is. My name’s Bob, what’s yours?” you ask.
“My name’s Jake, but that ain’t your name! Your name is Jerk!” shouts the man.
You want to shout back but you manage to hold it in and muster out, “Please just take down your sign, okay.”
Jake comes walking out from under his carport and yells, “Oh, I’ll take it down! I’ll take it down when you take down that $%&^ tree! You Jerk!”
You walk back inside, fuming. As you drive to work you can’t stop thinking about what happened as you clinch and pound on the steering wheel.

When you arrive home from work you ease into your driveway and notice that the sign is still there. Not only that but you notice Jake talking to some of the other neighbors and pointing at you. You overhear some of the conversation, “I just told him that his tree was blocking our sunlight in the evening and he told me to go to &^$#!”
Quickly you run inside, throw your things down and get in front of the computer. You pull up Google and search for “fast growing privacy plants with thorns”

You click the search button and notice listing that says….

Are you bothered by an obnoxious neighbor?

I can help!

 

Bob gives me a call and we talk about the problem he is having with his neighbors.

I then go over to asses the situation. Bob, tells me, “Please just make it go away!”
I then say, “Bob, I understand how frustrating the situation is. However, there are few things that I can and that I can’t do. I can’t put some seeds in the ground, sprinkle my magical dust on them, and have 10 foot privacy bushes in a week. But, I know the right plants to grow here, I know about the soil you have, the amount of sun they will receive, and I have a very special fertilizer that I can put on them every day to make them all grow as quickly as possible. And Bob, when I am finished, instead of seeing this obnoxious sign you will see a series of large bushes that flower all year long and have big thorns to prevent Jake from any more mischief.

So, let’s get started!”

Google offers services under google search for Online Reputation Management 0

Google search for Online Reputation Management keyword

From time to time I keep an eye on the players in the Online Reputation Management space and see who is

Google search for Online Reputation Management keyword

Google search for “Online Reputation Management: keyword

bidding for what keywords in Google. This week I noticed that Google was prominent in the top 7 placement for keyword search “Online Reputation Management”.

A click on their ad takes you here

Not much information or relevance directly to ORM but just a bit of insight that Google has ORM on their radar.

Nick

Yelp Takes on the Reputation Management Industry by Filing Lawsuit 0

Yelps sues Revleap, YelpDirector and Revpley

When talking about reputation management, there’s two different types of reputation management that

Yelps sues Revleap, YelpDirector and Revpley

Yelps sues Revleap, YelpDirector and Revpley

they offer. Personal reputation management is one type, that focuses on improving the search results for personal names.  The second type is reputation management for businesses, which most often is businesses who want to see glowing reviews while the negative ones are hidden away. And reputation management for businesses can get quite sketchy.

One of the main problems of reputation management is that some of the less trustworthy companies that do it are simply spamming in order to get the job done. Whether it’s getting a ton of fake positive reviews for business or attended negative ones for competitors, there’s a huge difference between companies that are doing reputation management the right way and those that are doing it the wrong way.

Yelp, one of the frequent targets by scammy reputation management companies, is going on the offensive and has filed a lawsuit against one of the company that is racking up victims of businesses that want to see great Yelp reviews. Many of these victims don’t realize it is against Yelp’s policies to do this because of the way these reputation management companies sugar coat how great they are, and then complain to Yelp when their money doesn’t improve their Yelp rating.

The company name targeted goes by the name of Revleap, but has also hopscotch through a variety of other names including Yelpdirector and Revpley (both sites disabled).

How Revleap works is they essentially bribe the individual businesses customers or clients with gift card prizes for leaving favorable reviews. And this can be a little bit harder for Yelp to identify since it doesn’t have that traditional footprints of fake reviews. But offering incentives for good reviews is certainly against the else policies, and is also got the attention of federal and state regulators.

You may view the full lawsuit here.

This should be eye-opening to any reputation management company. While there are some companies that are completely above board, it’s the ones that are doing things like posting fake reviews or offering incentives for good reviews that should take note and ensure their practices won’t result in them being on the receiving end of lawsuit filed by Yelp.

Public Relations and Reputation Management 0

Public relations and Reputation Management

PR and Reputation Management

Public Relations (PR) is evolving into a multi-disciplinary subject that is best termed “Reputation Management”. We believe that reputation is a vital determinant of sustainability in the modern business environment. We take the view that PR, as a single discipline, is no longer able to adequately shape a firm’s reputation, which by its complex nature requires a strategic, holistic and organic approach.

Reputation Management is a capability, not a function per se, and this approach is reflected in our training. Reputation is becoming a core business function that influences strategic decisions about the direction of a business and how it should be communicating with stakeholders. Reputation is an outcome of the collective opinion of others and it can only be “managed” by ensuring that what is promised is delivered and that brands keep themselves innovative and agile.

No organization, irrespective of its size or operation, is now immune from economic or other global threats. The view that the conventional approach to managing reputation should be broadened to include a basic geopolitical understanding of threats.

 

Reputation Management

What is the purpose of a business? According to Peter Drucker, “the purpose of a business is to create a customer.” Such a statement makes good sense as without customers there can be no functional business. Essentially if the purpose of any business is to fulfill some human need within society, then that business, whatever its nature, should take an active interest in its own reputation as a way of securing its future prospects. Central to building and defending a sound organizational reputation is the capability to be proactive and to recognize and evaluate potential and ongoing risks (issues). Legitimacy and transparency are at the heart of issues management and whether the messages developed and delivered through corporate communications are credible to stakeholders. If reputation can be viewed as a form of assessment of a corporation’s behavior and performance, then understanding and identifying risks and issues that may at a later stage damage this value asset, must be an active part of any reputation management structure and process.

“Reputations have to be continually earned and reviewed, and as such, need continuous monitoring and attention.”

The economic advantage of reputation is well established, but the issue of correlations and causation are not always as clear. Evidence does exist to show a link between good reputation and financial performance, but the issue is replete with complexities and variables. What is not in doubt is that as an asset, reputation is vital to the sustainability and growth potential of most brands. Within a market economy signalling a good reputation is important for customers as they have incomplete information and must make valued judgements when considering brands and comparing them against competitors. Those companies that have consistent behavior and communicate their values are more likely to be trusted, making them less of a risk for customers’ decision making.

We are witnessing the era of a reputation economy, whereby economic sustainability is based less on what you claim (typically through mass media) and more on what you actually do i.e. your accountability and consistent delivery of brand promise.

As previously mentioned, reputations count at both the individual and organizational level, and the evidence mounts to show the correlation between reputation and financial performance. Furthermore, business surveys constantly show that organizations list erosion or loss of their reputation as one of their most worrying risks. Like change, reputation cannot really be “managed” per se, just guided and directed. So the term “Reputation Management” is a little misleading in so far as a reputation does not actually reside within the organization but lies outside in the collective opinions and judgements of others.

 

What Is Reputation?

In a word, trust. However, given its amorphous nature, it is hardly surprising that no universally accepted definition exists. Professor Fombrun, CEO of the Reputation Institute, defines reputation as a “collective assessment of an organization’s past actions and results that describes the organization’s ability to deliver valued outcomes to multiple stakeholders.” In its various perspectives and interpretations, reputation centers on the following common elements:

  • A collective representation based on stakeholders’ opinions;
  • An aggregate evaluation that stakeholders make about how well an organization meets its customer needs based on current and past actions;
  • A holistic impression of a person or company based over time; it can be negative, neutral or positive;
  • A form of assessment, whereby an organization’s performance is judged in the context of its past and current behavior.

As a critical intangible, reputation is rather like modern medicine – it is increasingly evidence-based and focuses on prevention and understanding of root causes and changing vital behaviors.

 

Basic Rules for Sound Reputation

  1. Have reliable and credible products/services: Even with the most sophisticated social marketing and influence, people expect some basic quality and consistency in their brand experiences.
  2. Understand your values and mission: Establish core values and a clear mission and make sure all employees understand them. Brands are increasingly focusing on their values and higher order purpose. It is not enough just to sell a product/service; many brands, such as Dove, do better if they also project their values. Linked to values and a clear mission, is having the right ethical environment and the appropriate supporting culture.
  3. Be prepared to admit faults and correct them: Transparency is now expected from brands and organizations. Past public relations practice would try to cover up or re-frame a problem in the hope of mitigating negative outcomes. Today, companies are realizing the value of openly acknowledging mistakes and making public attempts to rectify them. Although one cannot be too naive about such an approach, remedying a fault can generate good reputational equity so long as it does not become too frequent an occurrence!
  4. Develop an effective social media strategy: Social networks are becoming complex Eco-systems, connected to a variety of platforms, which are increasingly mobile. Social media is generating a need to develop social influencing skills, whereby you talk – not at your customers but by providing them with a chance to participate and engage with your brand. Having a presence on Facebook and YouTube, and communicating and providing a brand voice through Twitter are essential, not optional. Brands such as Coca-Cola, Pepsi, Nike and P&G have all developed successful social media strategies and in the case of P&G, Open Source innovation strategies.
  5. Ensure that your structures and operations/processes are “fit for purpose”: Structure versus strategy is an established debate in business but nonetheless it is vital that an organization has the correct internal structures, teams and employee engagement mechanisms to deliver the given strategy. Even the best intentions to build a first rate company with an exceptional reputation will soon become just another great idea unless the correct framework is in place to achieve it.
  6. Have a credible CSR strategy: Corporate sustainability is now becoming mainstream and corporations have to be mindful of their social and environmental accountability and responsibilities.
  7. Good customer/brand experience: Brands must engage audiences and provide them with an enjoyable and memorable brand experience, thereby converting social influence into brand equity.  You only have to look at a commodity, such as the coffee bean and look at brands such as Starbucks and Costa Coffee to see how a commodity can be made into a genuine brand experience.
  8. Have a strong brand identity and clear positioning: Strong identity and position is the cornerstone of good branding and reputation. Brands such as Coca-Cola, Apple, Target, JCB, and Nike have powerful identities and brand positions.
  9. Be adaptable and innovative: The brand Apple has a good reputation because they not only produce great products, but because they constantly innovate and adapt their brands to the market. By focusing on second order capabilities such as how best to adapt and change, businesses can be sustained and are less vulnerable to disruptive technologies or market/regulatory forces. All of this requires up-to-date and appropriate business models that will make the business competitive and in-tune with how to generate income streams form a variety of sources. Amazon and Lego are good examples of business models that are highly agile and appropriately exploiting changes in the market.
  10. Have an effective intelligence or “radar”: To stay ahead of the reputation game, you must have an intelligence or radar system that detects signals. Companies must now try and anticipate strategic directions through effective risk and issue management systems that inform them of threats and opportunities.
  11. Have a well-developed crisis management plan: A critical part of crisis management is pre-crisis planning, which has direct links to risk and issue analysis. Being well-prepared for a crisis can shorten recovery time and lessen reputational damage.
  12. Have effective stakeholder engagement and communications strategies: A basic tenet of modern PR and reputation management is that you must not only engage stakeholders, i.e. the ones that are involved in buying and selling your goods/services, but you must also engage with your detractors, regulators and a long trail of stakeholders who can affect your brand. Stakeholder engagement is a management skill that cannot be underestimated or ignored. Shareholder return and investor relations must be given priority so long as one does not lose sight of the very factors that help generate them in the first instance. Shareholder return is not a strategy, it is an outcome, and must be understood in those terms.
  13. Have a solid brand narrative: The development of a narrative or organizational story is an important and effective reputation tool. Story-telling is an ancient technique of communication that is associated with archetypes. Many brands play on the Jungian notion of archetypes, such as Harry Potter (magician), Harley Davidson (rebel, outlaw), Nike (hero), IBM (ruler).

 

Reputation Management Is More than Shareholder Return

Most company declines are failures of performance and the origins of most failures lie in small incremental errors that mount up over time without people seeing their potential to cause damage later on.

Arguments have surfaced since the collapse of the capital markets in 2008 that have questioned the primacy of shareholder return as opposed to satisfying customers’ needs. Jack Welsh in the Financial Times in March 2009 said that “On the face of it, shareholder value is the dumbest idea in the world”. He also stated that “Shareholder value is a result, not a strategy.” There is little doubt that shareholder value is over-stated and thinking, post-2008, has focused on areas that help provide shareholder return: brand equity, customer loyalty and satisfaction, good product and service provision, strong risk and issue analysis and regulatory compliance. Many firms, such as Research in Motion (Blackberry) J&J and P&G have all adopted strategies that are primarily customer-focused, which, they argue, is the best way to produce dividends.

Link to shareholder return is the important issue of Socially Responsible Investment (SRI). Social responsibility and community investment are now huge areas of investor relations, with trillions of dollars being traded and invested in ethical funds. Corporations whose businesses involve alcohol, tobacco, gambling, pornography and arms trading are typically screened out from ethical portfolios. The purpose of SRI funds is to promote environmental stewardship, human rights, consumer protection and socially responsible business practices.

The message is simple: corporations can no longer just focus on profits without accountability. With few exceptions, businesses are pushed towards being environmentally and socially responsible and paying more attention to what makes brand equity grow in the first place, on the understanding that shareholder return will increase as a consequence.

 

The Emergence of Reputation Management as a Discipline

In the author’s opinion, Reputation Management is a holistic discipline, which is a synthesis of a number of largely independent, yet connected, disciplines:

  • Strategic risk and issue management
  • Corporate social responsibility (CSR)
  • Assurance, audit & regulatory compliance
  • Crisis management
  • Investor relations
  • Systems thinking and knowledge management
  • Online monitoring and SEO
  • Leadership

As an amorphous, inter-disciplinary concept, reputation cannot really be managed, but can be guided in a certain direction by continuous monitoring of its environment (environmental scanning). Good reputations can be sustained more readily if risk and issues are properly analyzed and, where possible, acted upon.

 

Confusion of Terminology

As a complex construct, reputation must be understood at different levels, which in themselves are not mutually exclusive:

  • Brand/product reputation: Reputation of the brand or specific product/service – especially relevant to product brands such as those in the FMCG sector, e.g. shampoo
  • Organizational or corporate reputation: The reputation of the whole organization e.g. Timberland. According to Barnett et al in the Corporate Reputation Review1, corporate reputation is defined as “observers’ collective judgements of a corporation based on assessments of the financial, social and environmental impacts attributed to the corporation over time”. The term “corporate reputation” increasingly refers to an organization as a single entity and not as a sub or individual brand. It is the term “corporate reputation” that has gained prominence, most probably because of the increasing use of the term “corporate communications”.
  • Industry reputation: Reputation of the general sector or industry as a whole e.g. the financial services industry.
  • Reputational capital: The measure of an organization’s reputational value based on the sum of strategic corporate assets: patents, trademarks, processes, trust and integrity etc. Reputational capital focusing on stakeholders’ views of the brand and how these affect shareholders return in particular.

Corporate Reputation Review, Volume 9, Number , 26-36: Corporate Reputation: The Definitive Landscape

 

Having a Good Reputation Is Not Always Enough

Reputation in its own right is not always enough to save a company from decline: a corporation can have an excellent reputation, but a disruptive technology or swift competitor innovation can damage its market share. Historical examples include Olivetti and Encyclopedia Britannica. Both were highly respected brands and yet neither adapted well to the impact of technology. In Olivetti’s case it was the growing numbers of word processors from the mid-1980s, and in Encyclopedia Britannica’s case, it was failure to exploit the growth of online encyclopedias and new models of creating and editing content, such as Wikipedia. The lesson: failure to adapt and innovate is now a greater threat to a business, even if a sound reputation is in place. Although external, mostly economic factors are some of the greatest risks faced by a corporation, internal failures combined with poor positioning and marketing, cash flow problems, and inability to control costs are typically the key nails in the corporate coffin.

 

Sources of Online Reputation Risk

  • Management decisions; many crises are the result of poor management decisions
  • Unacceptable employee behavior or attitude
  • Unacceptable environmental or social actions or decisions
  • Technology failure or security breaches: loss of data or access being made to data by those who have no authority to do so
  • Social media: viral spread of rumors or reporting of real or perceived crisis
  • Poor financial performance or poor economic responsibility
  • Failures in health and safety
  • Failures in product traceability – contamination
  • Failure to follow regulatory compliance
  • General unacceptable corporate behavior
  • Unfair and unreasonable behavior by senior executives
  • Disaffected employees
  • Rumors, both on and offline
  • Accidents
  • Consumer opinion site/ complaints sites
  • Trade-mark infringement and failure to protect intellectual property
  • Sources of products and services that cause environmental or social damage
  • YouTube – campaigning adverts and short films
  • Non-governmental organizations’ campaigning
  • Scandal sites
  • Faux pas by employees

 

How Reputations Are Formed:

Any study of consumer psychology and behavior reveals, in general, how people are influenced. However, the models and theories that pervade much of the marketing literature such as the AIDA (attention, interest, desire, action) and social diffusion models are now less relevant in the age of web communications and social media. That said, there are some basic contributory components that help form reputations:

  • Information based on mass media – advertising, features, news and general print media, TV and radio
  • Engagement through social media and peer-to-peer referrals, recommendations and endorsements
  • Personal experience of the brand or organization – did it deliver on the brand promise? Were the messages credible and consistent?
  • Reinforcement of the above through friends and other trusted sources: increasingly this is in the form of forums, opinion sites, blogs, Facebook, Twitter etc.

Personal experience is the most powerful tool and if positive, a satisfied and loyal customer can become a brand advocate, helping to spread the word, resulting in recommendation and referrals. If securing your next customer and retaining existing customers are fundamental to any commercial operation, it makes sense to get customer-engagement right and ensure that customer-facing staff understand the values and messages that the company wishes to convey.

 

Factors Affecting the Importance of Your Reputation Capital

This is the impact that the marketplace and, more specifically, competitors, have on your own organization’s reputation.

  • The visibility of your brand and its risk-exposure: to what extent is your brand organisation in the public domain? Does your brand/company espouse high ethical values and practice social and environmental responsibility? Do you engage in aggressive advertising and promotion?
  • The history and story or narrative behind the company or brand – many brands have narratives that they communicate to reinforce their values.
  • The sheer complexity and connectivity of your business: if you have a crisis, how many people will be affected and what will the impact be? Clearly, energy companies such as Shell and BP fall into this category, but so do many types of manufacturer and pharmaceutical companies.
  • Does your company/brand have a significant environmental or social impact?
  • Do you espouse high ethical values? If so, you had better live up to them!

 

The Benefits of Having a Good Reputation

Evidence available clearly points to a link between a sound reputation and financial return. A good reputation also helps raise loans from banks and acts as a “shield” during times of crisis, thereby allowing a swifter recovery. Therefore, a good reputation is a critical economic asset that helps customer retention and acquisition and reduces information and transaction costs.

Other benefits of securing a good reputation include:

  • Helps secure revenue income via competitive advantage and the development of trust
  • Makes your brand or company top choice among key target groups
  • By growing brand equity it allows premium pricing
  • Facilitates brand extensions
  • Improves employee retention and talent management, attracting better applicants and retaining vital knowledge workers
  • Reinforces relationships with suppliers and other direct stakeholders
  • Helps increase the chance of success of new product releases

 

PR Versus Reputation Management

The practice of traditional Public Relations (PR) has had a significant impact on corporate communications. Reputation Management is really an evolved, more sophisticated corporate discipline that has been shaped by the emergence of the internet in the early 1990s. Both traditional PR and Reputation Management are involved with building and managing relationships and both are involved with influencing perceptions. Arguments around the difference between PR and Reputation Management are somewhat sterile in so far as both terms have considerable overlap, but Reputation Management has gained prominence since the 1990s following a number of high profile corporate scandals and the rise of social media and online reputation management. Despite the overlaps, as an evolved discipline there are some notable differences that have emerged as a consequence.

The classic PR approach emphasized short-term strategies and the manipulation of corporate image and was heavily media relations based. Emphasis was largely tactical rather than strategic, and PR practitioners often had a limited understanding of business models, overall corporate strategy and the financial and regulatory constraints that business operated within. In this regard, management consultants were better suited to advise on a more holistic approach.

Traditional PR was media relations focused, and interested in the “sound bite” as its reproduction within relevant media. Although this is just as relevant today, the approach through Reputation Management is subtly different in that it uses all forms of communications as a platform to engage with stakeholders, however trivial. As a consequence, it assimilates risks and issue analysis into its strategic thinking when identifying and engaging stakeholders.

Reputation is about delivering the brand promise with a view to the long term security and stability of the company. Traditional PR is still focused on brands and on trying to develop sound customer relations based on short-term tactical actions. In contrast, Reputation Management is more strategic, longer-term and attempts to deliver on brand promises. The spotlight for reputation tends to be on the organization rather than individual brands, unless of course the organization is a corporate brand. To develop a sound and sustainable reputation, the following disciplines will need to work together to get across a message to a wide range of stakeholders:

  • Risk and issue management
  • Investor relations
  • Crisis management
  • Internal communications
  • Brand and customer communications
  • Online brand management and SEO
  • Organisational and managerial communications

Please note that these are highly interdependent and overlapping.

 

Traditional PR

 

  • Less strategic
  • Talking at people
  • Less integrated
  • Influence — direct
  • Focus — Short Term
  • Key people involved
  • Aims to give the best possible image
  • Media relations focused
  • Focus on: limited number of stakeholders
  • Focus on attention

Reputation Management

 

  • More strategic
  • Talking with people/participating
  • Integrated
  • Social influence — referent
  • Holistic — long term
  • Involves all employees
  • Aims to deliver image and brand promise
  • Uses all forms and opportunities to communicate policy and values
  • Medium no longer the message — social media
  • Greater emphasis on multiple stakeholder relationships
  • Focus on communicating values and mission

 

 

Social Media and Reputation

Social media have transformed the way in which ideas are propagated and the nature of how reputations are lost and gained. Online Reputation Management dominates much of the reputation literature, focusing on Search Engine Optimization and how to monitor and reduce negative online coverage. Social media has become central to branding and helps generate social authority, virally spreading messages with credibility. Brands generate trust and reputation via peer-to-peer recommendations and by opinions expressed within online communities. Brands such as Coca Cola, Starbucks, McDonalds and Ford have adapted extremely well to social media as have Sony and Microsoft. Coca Cola has millions of fans on Facebook and has a defined social media strategy to engage with people. Their “open happiness” global marketing strategy has been successful as has their YouTube viral “Happiness Machine”, which by the end of 2010 had been seen by over 3 million people.

Examples of companies and software that can assist with online and social media monitoring include: