If Facebook sneezes, do other tech giants catch a reputational cold?

For keen watchers of tech and innovation, Facebook sent up a reputational flare from Silicon Valley last month.

Watch out for spending sprees on reputational assets by tech giants, predicts Cordelia Meacher
Watch out for spending sprees on reputational assets by tech giants, predicts Cordelia Meacher

Decrypted from the usual dense stream of information out of the West Coast, are a couple of signs that the once seemingly indestructible pedestal built by the tech giants is starting to look a little tatty.

To understand why, it is important to first outline the context.

In an era where both entrepreneurialism and technology are idolised, the Valley’s tech giants have been able to dictate the corporate reputation game.

Google is able to 'nice' its way through controversies, Apple famously tells rather than listens, and even Uber's never-ending stream of issues at a senior level didn't put an anchor on growth.

Finally, however, it seems Facebook may have taken one too many bullets to its brand.

Were it only the (admittedly very damaging) Cambridge Analytica scandal and last week's maximum ICO fine, the company may have been able to hunker down in its shiny new Menlo Park cafeteria and wait out the storm.

However, the Lilliputian grappling hooks of numerous privacy, tax, inappropriate content and psychological wellbeing issues – topped off with the hacking of 30m people – may have finally dragged this giant to the dirt.

So back to the flares, what evidence is there that the influence dynamic is shifting?

The clues are in the hiring of Nick Clegg and the rumoured desire to buy a prominent cybersecurity company.

The Lilliputian grappling hooks of numerous privacy, tax, inappropriate content and psychological wellbeing issues – topped off with the hacking of 30m people – may have finally dragged this giant to the dirt.

Cordelia Meacher, managing director of FieldHouse Associates

This points towards a strategy to acquire assets with a pre-existing reputation, something which tech giants typically believe in creating themselves; whether purposely or as a halo effect of other initiatives.

Both have something Facebook is signalling it desperately needs at the moment.

Nick Clegg, a ready-to-deploy pre-pack of liberalism and democracy, is a cleansing counterpoint to the tarnish of election scandals.

The timing of any high-profile cyber security acquisition so soon after a huge breach speaks for itself, the company is buying the reputational assets it needs.

Is this a sign the magnetism tech giants have enjoyed for so long has reached a high-water mark, or is it a temporary phenomenon? Only time will tell.

It will be interesting to see if this is contained to Facebook, or whether others will suffer.

Watch out for spending sprees on reputational assets.

CSR may also take increased focus in brand communication terms, as may a public switch towards ‘tech for good’ initiatives.

With Facebook quietly smouldering, tech giants need to tread carefully to avoid flash points.

Under the accumulated gaze of a world disenfranchised with utopian promises of tech companies, this may not be easy.

The most important thing to do will be to first acknowledge that this power shift is underway and adapt their communications strategy appropriately.

There is also a lot to be said for falling back to their founding principles of honesty and transparency, something all too easy to forget in the wild ride to the peak of the tech industry.

Cordelia Meacher is managing director of FieldHouse Associates

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