For Some Corporations, Twitter Is Source Of “Foot In Mouth” Problem

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As Twitter Inc (NYSE:TWTR)’s positive earnings were reported along with disappointing user growth, leading to a 12% drop in the stock price in after hours trading, many large corporations are creating problems for their brand by saying too much on the social network.

As Twitter Inc (NYSE:TWTR) emerges as a news feed of sorts, major corporations grapple with their place in what is considered the new public forum.  Some corporations are constantly tweeting, Joshua Brustein noted in a recent Bloomberg report, and in some cases it causes the brand problems – and ultimately requires apologies.

Corporations apologize on Twitter much more than individuals

Brustein notes a recent edgy Tweet from hand sanitizer Purell during the Super Bowl that remarked how the “Broncos looked as bad as the Browns.” MSNBC ran into trouble for a racially charged message about a Cheerios spot for which it later apologized.  In fact, apologizing is one of the most frequent activities corporations engage in when they take to Twitter, according to a study published in the Journal of Pragmatics. The study found that corporations use the word “sorry” 8.6 times more frequently than individuals and the words “apology” and “apologize” 7.4 times more frequently.

In part, the study noted that corporations spend time dealing with customer complaints on Twitter.  In the two year study period tweets directed from a corporation to a single user rose from 42% to 59%, largely because corporations were responding to individual complaints on Twitter, the report noted.  When responding to a complaint, the report noted that corporations rarely repeat the issue and often pointed to someone else at fault.  Interestingly, the use of emoticons by corporations are 1/5 the amount of use by individuals.

The most used corporate emoticon was the frown : ( likely inserted when dealing with negative information.

Too much information on Twitter

While corporations tend to spend a lot of time apologizing for issues, they also are creating problems of their own at an alarming rate.  Why the foot in mouth problem for large corporations?  “It’s pretty much because brands don’t know what they’re doing,” the report said. “People who advise companies on social media have a simple solution: just stop tweeting so much.”

“There is a perception that there is a daily need to create content to engage consumers, and so it’s created this ecosystem that we’ve created now where brands are outsourcing their social media marketing,” Jason Kapler of Networked Insights, a company that advises brands on how to use social media, said in the article. “I’m wondering if it’s not undermining the brand equity they’re building with consumers.”



About the Author

Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com