Full Length ArticleBrand crises in the digital age: The short- and long-term effects of social media firestorms on consumers and brands
Graphical abstract
Introduction
Brands may spend years building their reputations, but they can go down in seconds, especially with the pace of digital media.
—Marketing News Weekly (2017)
When New York's taxi drivers struck for an hour at Kennedy Airport, in protest of Donald Trump's so-called “Muslim travel ban,” the ride-hailing company Uber announced on Twitter, “Surge pricing has been turned off at #JFK Airport” (Cresci, 2017). Within seconds, consumers voiced their criticisms of Uber's strikebreaking behavior and apparent support for the ban, using messages such as “Congrats to @Uber_NYC on breaking a strike to profit off of refugees being consigned to Hell. Eat shit and die” (O'Sullivan, 2017). Soon the hashtag #DeleteUber spread, transforming into a vast protest marked by thousands of angry, emotional tweets (Collins, 2017; Cresci, 2017); it was the top trending topic on Twitter that night and in the days that followed. Major news media reports about the firestorm further fanned the flames throughout social media.
Uber is by far not the only company to have suffered such a “social media firestorm.” United Airlines experienced a global firestorm following a shocking cellphone video of a security officer violently removing a passenger from an overbooked flight (Victor & Stevens, 2017), and Abercrombie & Fitch found itself subjected to waves of angry, emotional comments on Twitter after CEO Mike Jeffries said in an interview that he only wanted “cool” and “popular” kids to wear the chain's clothes (The New York Times, 2014).
Such social media firestorms have become standard elements of the modern marketing environment, constituting a digital form of brand crisis. Whereas in the pre-digital age, consumers were only able to express their dissatisfaction with a brand individually, either by contacting the firm or talking to a very limited number of others, without much opportunity to bundle their protests (Rauschnabel, Kammerlander, & Ivens, 2016), the rise of social media has shifted power from organizations to consumers (Hennig-Thurau et al., 2010; Labrecque, vor dem Esche, Mathwick, Novak, & Hofacker, 2013). Social media enable individual consumers to inform large numbers of other consumers in a very short time frame by co-creating and spreading brand-related content through their digital networks (Labrecque et al., 2013). This environment of social media networks sets new, digital forms of word of mouth apart from their analog predecessors, by enabling, for instance, real-time access to large numbers of friends and followers (Hennig-Thurau, Wiertz, & Feldhaus, 2015).
As a digital kind of brand crisis, social media firestorms exhibit their own characteristics, reflecting the influence of the social media environment. Whereas part of what we know about “traditional” brand crises likely applies to firestorms, other factors are likely affected by the specificities of this digital surrounding, which require new understanding. For example, social media are characterized by extreme dynamics, meaning social media firestorms can experience exponential growth in a very short time frame. As a result, social media firestorms can constitute an important threat to firms' brand assets, in line with many corporate leaders' sense that “reputation risk” is a grave threat (Deloitte, 2015). But this judgment is not undisputed; some commentators suggest these threats have been exaggerated, with little actual economic meaning for firms (e.g., McKinsey, 2012), especially in the long run (i.e., “memory fades,” Knowledge@Wharton, 2015).
We aim to contribute to this debate by investigating the specific negative effects of social media firestorms on consumers' perceptions of a brand. This approach anticipates that the power of social media firestorms will not be “strong” or “weak” in general but rather will vary, according to certain contingencies. We derive contingencies from general research on brand crises (e.g., the reason for the firestorm), but also from the digital characteristics of social media firestorms (e.g., amount of social media word of mouth). With the empirical insights gained from this study, we seek to help managers identify threatening social media firestorms early, so that they can allocate sufficient and appropriate resources to prevent their escalation. With firestorms having become a regular occurrence for large firms, marked by enormous and radical dynamics, we consider this insight essential for establishing effective corporate responses. In addition, our findings suggest ways to determine appropriate metrics to track the development of firestorms.
To achieve these contributions, we build on brand crisis and social media research to craft a theoretical framework of firestorm characteristics that prompt negative changes in brand perceptions in the short and long run, as well as those that cause the firestorm events to become part of consumers' long-term memory. We link firestorm factors to the elaboration likelihood model of consumer behavior (ELM; Petty & Cacioppo, 1986), which we apply to the social media environment. Leveraging the ELM, we derive factors that might influence how consumers process and remember firestorm information (i.e., based on their motivation, ability, and opportunity). The resulting framework distinguishes trigger characteristics of social media firestorms that are initially detectable (e.g., vividness of the trigger) from evolving firestorm characteristics (e.g., its length). This distinction offers brand managers both early warning indicators and important metrics to track throughout the duration of a social media firestorm.
We then test our conceptual model with two studies. First, we check the brand-related hypotheses using YouGov data about German brands affected by firestorms between January 2012 and December 2014, applying an event study approach. We analyze the effect of our ELM-based trigger and firestorm characteristics on negative abnormal changes in brand perceptions in the short- and long-term. Second, we test the consumer memory-related hypotheses by combining our data set with a survey that we used to measure consumers' memory of the respective firestorms, two years after their occurrence. With this step, we aim to assess whether changes in brand perceptions stem from a particular firestorm. Here, we use generalized estimating equations (GEE) to account for the hierarchical structure of the data.
Results show that both trigger and firestorm characteristics drive short- and long-term effects of social media firestorms on consumers and brands. Strong social media firestorms, with a high volume of social media messages (i.e., tweets), relate to negative changes of consumers' short-term brand perceptions, as well as two years later. Firestorms caused by a defective product or service have stronger consequences than those triggered by inappropriate communication strategies by a company. The length and vividness of a firestorm additionally influence consumer memory, as do firestorms caused by a social failure. We discuss the managerial implications of these findings to conclude this article.
Section snippets
Social media firestorms as a digital kind of brand crisis
We conceptualize social media firestorms as a new, digital form of the broader phenomenon of brand crises. Managers have long confronted brand crises; Shell's Brand Spar controversy (the company planned to dispose of an oil drilling platform in the North Sea in 1995; Nash, 1995) and the Contergan scandal (a medicine of the same name led to physical deformities of thousands of newborns in the early 1960s; Shuster, 1973) happened decades before the Internet existed. In those days, crises spread
Conceptual model and hypotheses
We define social media firestorms as brand crises in the digital age that consist of multiple, publicly observable consumer articulations about a brand on social media that express strong negative emotions and spread in a highly dynamic way across and within media. In our conceptual model (Fig. 1), we categorize different social media firestorm factors into (a) trigger characteristics, which can be observed right at the beginning of the crisis, and (b) firestorm characteristics, which evolve
Social media firestorm sample
To test our hypotheses, we combine data from multiple sources pertaining to trigger and firestorm characteristics, brand perceptions, and consumer memory for all events from January 2012–December 2014 that met our criteria to be defined as social media firestorms for major brands. We first searched all German tweets during the specified time frame for the term “shitstorm” in conjunction with a major brand. This search term is a well-established, widely used expression for social media
Average effects of social media firestorms on brand perceptions and consumer memory
The data set reveals that of all affected firestorm brands in our sample, 58.3% suffer from a decrease in short-term brand perceptions, and 40.0% face long-term negative effects. Those brands suffer from an average abnormal short-term decrease in brand perceptions of 3.4% and an average abnormal long-term decrease of 6.9%. In addition, 23.0% of the brands with a short-term decrease recover quickly, revealing no long-term damage to their brand perceptions. Almost all the brands that suffer a
Discussion of results
This study investigates social media firestorms as a digital kind of brand crisis in which consumers' negative word of mouth shared via social media plays a central role. After conceptually establishing their characteristics, we empirically describe the influence of social media firestorms on consumers and brands, with a purposeful dependence on several theory-based contingency factors. Trigger and firestorm characteristics—which both can be associated with varying degrees of consumers'
Funding
This work was supported by the German Research Foundation, Germany (DFG) research unit 1452, “Marketing of Hedonic Media Products in the Age of Digital Social Media”, HE-3437/11-1.
Acknowledgments
We thank Eva Kurz for her help in collecting the extensive data and her contributions to the theoretical considerations. We thank Silvia Halbing for further data collection efforts. We acknowledge support from the DFG research group “Marketing of Hedonic Media Products in the Age of Digital Social Media”, especially Franziska Völckner, Henrik Sattler, and Marius Johnen, and constructive comments from participants of the special session, “Weathering a Social Media Firestorm: Strategies for
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