On December 12, 2016, President-elect Donald Trump tweeted that the cost of Lockheed Martin’s F-35 fighters was "out of control." Hours after his tweet, Lockheed’s stock fell 2.5%, lowering the company’s valuation by almost $4 billion. Lockheed competitor Boeing saw its stock rise 0.7%.
That the F-35 program has been plagued over the years with massive cost overruns during development has been widely reported—which means Trump’s tweet was not "fake news" in the sense we now come to know it. However, with no new news on the program offered, and with the planes entering service, the president-elect created his own news. Using Twitter, he published it himself and moved the market, all without having to communicate through traditional media that, per the old rules, would have included a response from Lockheed, perhaps defending the cost of its plane. By the time Lockheed responded with a defensive press release—a tool from an age now gone by—the trend had been established, the trades made, and the damage to Lockheed’s stock done.
The unintended consequences of the democratization of information
Over the last decade, using tools easily accessible to all, anyone has been able to become a publisher of news, real or fake, and opinion, considered or not. Everyone can broadcast broadly via a variety of channels, most notably social media. This is a major change in the way information is disseminated, consumed, and used in society, and many businesses are still not understanding and responding to its ramifications.
This trend has reached a fever pitch over the last 18 months and is becoming qualitatively different from previous incarnations of self-publishing. First, there are far more instances of fake news. Second, more people are taking it seriously. And third, the balkanization of social media that occurred during the U.S. presidential election—in which voters in both parties seemingly consumed content that primarily reflected their own echo-chamber view—has given fake news added velocity through rapid sharing by like-minded audiences.
Compounding this effect, investors and funds increasingly are making trades based on sentiment analysis of social media trends, which means business news, fake or real, is generating immediate reaction just as political news, fake or real, does.
Until relatively recently, there were guardians at the gates of public information. A generation ago, much of the nation got its news and information from a few trusted sources on the evening news telecasts. Twenty years ago, most people got their sense of the world from network news departments and newspapers that at least nominally followed broadly accepted editorial rules of fairness and objectivity. Consequently, there could be a generally accepted view on what was true, what was not, what was fair game, and what wasn’t. There also were generally agreed upon norms that prescribed the terms of partisan engagement or legitimate debate.
Today, there are hundreds of news sites on the internet, many highly partisan with little regard for those rules and norms, as news and opinion are distributed through social media channels with no editorial filter.
This disappearance of established sources for vetted information—or, if you will, the democratization of information—has been going on for a long time. But it reached a tipping point in the recent election, when it became obvious that the media’s traditional role in providing information, as well as judging its truth or falsity, had been subsumed by other channels following different rules or operating in their absence.
Facebook and other social media platforms are now recognized as the primary information source for many people. The Pew Research Center reports that 62% of U.S. adults got news from social media in 2016, up from 49% in 2012. And 66% of Facebook’s almost 230 million active monthly users in the U.S. consume news on that platform. That means 44% of the U.S. adult population gets its news on Facebook, arguably making it the country’s most influential source of information. (Only 16% of U.S. adults get their news from Twitter, but it is the primary news source for over half of them.)
No one at Facebook or Twitter—no human editor—decides what information gets posted on the platform or, conversely, what does not. Algorithms decide what news or information is included in an individual’s Facebook feed considering, among other factors, its source, when it originated, the type of content, and the number of interactions with the content. There is no mechanism for determining accuracy or truthfulness, a fact that in early January 2016 led Facebook to hire Campbell Brown, a former CNN anchorperson, as director for news partnerships. But Facebook, which has long promoted itself as a neutral platform for information, said Brown would have no role in making editorial decisions, which, given the torrent of information flowing across the platform, would be humanly impossible.
Compounding this lack of vetting is the way in which well-meaning social media users on both sides of the political spectrum instantly share information with friends and allies without fact-checking it themselves. This, in many ways, can be even more damaging as, once shared, the information, and the person who has shared it,gains a spurious authenticity, leading the next person down the receiving line to trust it as well. Even if people question the algorithms that place unsolicited news in their feeds, they may still give a friend—and the information he or she shares—the benefit of the doubt. People and groups can take advantage of the neutrality that news algorithms bring for many purposes, including making a profit. For example, it has been widely reported that individuals can make thousands of dollars setting up news sites to attract ads through Google AdSense. And the more sensational, and therefore clickable, the news on the site, the more money it makes. Truth, accuracy, and fairness do not enter the equation.
In business, this evolution has enabled social and financial shareholder activists, should they choose, to shred management reputations without having to get past the hurdles of editors at The Wall Street Journal or Financial Times. Indeed, using social media and setting up dedicated campaign websites have become standard operating procedures for activist investors seeking to change or influence management or company strategies, even as Twitter is becoming an increasingly important conduit for financial information, with many companies releasing their results there first. Not surprisingly, activists, such as Bill Ackman at Pershing Square Capital, have used Twitter to launch and conduct lengthy campaigns against companies they have shorted. Ackman’s long battle with Herbalife, which he shorted to the tune of $1 billion, features a Pershing Square website dedicated to accusations against the company and its management, multiple YouTube videos, and a variety of tweets and blogs. Carl Icahn, who amassed more than 325,000 followers since first tweeting about Dell in June 2013, and David Einhorn of Greenlight Capital, who is shorting the hydraulic fracking sector, are others in a long list doing exactly the same.
Companies need to understand that communications tools and rules have changed or risk becoming vulnerable. To control, or at least influence, the narrative about them, all businesses need to up their communications game with shareholders, employees, and the public. In effect, they need to become publishers.
How businesses can respond: Five steps
One truth about communications has not changed: if you don’t tell your own story, someone else will tell it for you. Today, more than ever before, it is essential for businesses to control their own narrative, to tell their own story quickly, before they are put in a defensive position; responding to stories, not driving them.
GE is an example of a more than 100-year-old company that made a conscious decision to turn on the digital taps during the 2008 financial crisis and never looked back. GE launched digital channels filled with engaging, strategic stories about technology innovation and business dynamics—changing its narrative from appliances and light bulbs to leadership in digital infrastructure. Importantly, it used and expanded those same channels so that on rainy days it could diplomatically punch back against critics and the press, when needed, to set the record straight on an array of hot-button issues swarmed by incorrect facts, including its tax bill, Hudson River dredging, the health of GE Capital, its competing F-35 jet engine, its investments in U.S. job creation and more.
Here are five steps companies should take immediately that will allow them to tell their own stories effectively.
Leverage your corporate blog
The corporate blog allows a company to write at any length about any issue that it believes needs addressing and gives it the freedom to use a non-corporate tone and a voice accessible to savvy digital audiences. Blogs can also serve as a website anchor, with links to other resources containing information and data a company’s stakeholders need in order to understand the real story. That story can then be shared on social media or referenced in the comment section of other blogs and other social media platforms.
Prepare your digital channels
Companies should keep their digital communications channels well-stocked with content through frequent posts. Establishing a reputation for transparency and authenticity with your target audience and becoming known as a trustworthy and reliable information source in your sector will make you less vulnerable to mischievous misinformation and make your stakeholders and the public less likely to question your truthfulness at critical junctures. If and when a crisis occurs, it is usually too late to get out in front of the narrative. With a robust digital infrastructure already in place, there is a built-in audience ready to hear your viewpoint on a hot issue. Importantly, because these channels are already filled with rich content about the positive side of your work, they will be addressing any contentious issue in a digital environment surrounded by positive messages, not in a "red alert" crisis press release or crisis website.
Use search engine optimization
Some fake news sites leverage the viral nature of social media to drive a high number of shares. This, in turn, leads to high search engine rankings. To combat that, companies need to develop a volume of content, optimized to pull in links from reputable sources, thereby improving their own content’s ranking and pushing the fake news off the first page of search engine results.
Engage with influencers
Despite the seeming chaos of social media, with millions of supporters of one view or another eager to add fuel to an internet fire, there are some people—influencers—who are more measured, thoughtful, and cognizant of preserving their own reputation and influence. These people will not be so quick to share something that has not been verified. In addition, because they already possess a high degree of trust with their audiences, they can cast a halo effect over your message—if they know and trust you. It is critical to identify the key influencers in your sphere and engage with them honestly and transparently so that, when a crisis does occur, they will be inclined to accept (and share) your point of view.
Don’t let your foot off the gas pedal
A common mistake is to dial back on content and engagement once a hot-button issue is out of the headlines. But much like zombies, negative stories never really die online. The first blogger who digs up an old story and doesn’t fact check it—or worse, a new adversary who is intentionally searching for discredited reports—can re-ignite a fire that you may assume had long been doused. That is why rapid-response media-watching teams need to be on a constant lookout for the resurfacing of negative stories while positive content continues to pour out to keep channels robust, audiences engaged, and search engines trawling.
The Boy Scout’s oath
You know the oath: "Be prepared." When a crisis rears its head—an activist or competitive attack is launched or a seemingly benign financial or management event occurs—and the storm clouds begin to gather, rightly or wrongly, on Twitter or Facebook or through a widely shared blog or news story, corporate leaders must have their means of response in place and in good working order. That will allow them to act quickly, 24/7, not just during banking hours, knowing that social media never sleeps. You must leverage channels and relationships that already have been established, responding in a way calibrated to the strength of the storm; overreaction is just as bad as no reaction. And your response must be diplomatic, so your message is taken as informational and educational, not defensive.
There is much to learn about the evolving communications landscape and not a lot of time in which to learn it, but having a comprehensive communications and engagement strategy is essential in the current environment, where 140 characters can have a multi-billion-dollar impact.
Edward Reilly is the global CEO of the strategic communications segment at FTI Consulting and contributor to FTI Journal.