Marketers at Sea Discuss Threats to Corporate Reputations

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The word "blogs" debuted briefly yesterday at a largely branding-obsessed Marketing Forum held on board the Norwegian Dawn luxury cruise liner.


But the context was negative: Bob Pagano, partner of Monitor Group's Market2Customer, worried about blogs' effect on the corporate brand amid several technological and social shifts.


"Today, someone can create blogs and literally create havoc overnight," Pagano told a packed room of marketing decision makers at the annual Marketing Forum, held off the U.S. Atlantic Coast May 9-12.


And that was it for blogs. Perhaps these online journals from industry commentators will garner more attention next year from this audience as bloggers increasingly challenge company-controlled branding efforts.


For now, corporate reputations face many other threats. Nongovernmental organizations, for instance, have more influence than they did 10 to 15 years ago "when news came through filtered sources," Pagano said.


Another threat involves alliances with partners that can go wrong. The stink around outsourcing is a case in point. Then there is the paradox of choice. It is becoming harder to differentiate products, thus increasing the reliance on corporate brands to make the emotional pitch.


Pagano rattled off other fundamental shifts he has seen in researching corporate branding attitudes with London's Financial Times. Product lead times are shrinking. The world is growing more interdependent. The triple bottom line is key: managing for profit, social and economic responsibility. The attitude today, he said, is if "you want something, you give something."


Companies need to operate today as if regulated, he said. They must engage, not respond. They must communicate across silos in the organization. Consistency is critical in aligning the organization's talent and resources with the corporate brand.


"There is a direct correlation between corporate reputation and brand," Pagano said, citing fallen giants like Tyco.


So how aware are CEOs and chief marketing officers of these changes? A survey of last year's Marketing Forum client-side attendees and their CEOs was discouraging. CEOs took such issues seriously but did not meaningfully track reputation. CMOs had trouble getting the attention of their CEOs. Where CEOs were not keen to keep tabs on corporate branding, programs to monitor such activity did not exist, said Will Speck, U.S. director of research for the Financial Times.


"[Also], only 13 percent [of those surveyed] have assets well-aligned and measurement systems in place," Speck said.


Leadership is key in changing attitudes toward corporate branding. Companies also must assess internal and external risks. They should align assets and define key metrics, too.


It is vital to define what you own in the minds of consumers, Speck said, "because you can't rely [alone] on product."


When asked, Pagano said he admired three brands for aligning assets with the corporate brand. In Asia, he liked Singapore Airlines because it "was designed around the customer experience." In Europe he liked Mercedes-Benz for meeting customer expectations despite recent quality issues.


Starbucks was Pagano's U.S. choice. The coffee retailer has created a culture attracting an educated workforce that highlights its own social causes in individual coffee shops. Starbucks may suffer from the short-term loyalty of this transient population, but it is still the place for employees to meet likeminded people.


Speck admired Enterprise Rent-A-Car. The car rental firm hires college-educated people in suits to project a professional aura. Revenue last year was $6.5 billion, Speck said. The company still runs its decade-plus-old commercial.


But Pagano admitted that a gap still exists between brand and reputation as understood by CEOs. Asian CEOs' view of reputation is linked with a deeper personal or family connection, he said, citing the suicide of a senior Hyundai executive involved in questionable activities. That level of shame for harming the corporate reputation doesn't exist in the United States.


"In the U.S., you get a $40 million payout," an audience member chipped in.


Mickey Alam Khan covers Internet marketing campaigns and e-commerce, agency news as well as circulation for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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