Fake News: The New Face of Corporate Reputation Warfare

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Today, it’s easier than ever before to spark misinformation, watch it spread, and then witness it take down corporations, crush reputations, and topple political figures.

Exaggeration this is not. A brief glance at the news tells you all you need to know. Fake news is powerful enough to shake technology juggernauts, crush world-famous personalities, and wipe entire businesses off the map.

And what if fake news happens to strike your company? It’s obvious by now that fake news isn’t an “out there” problem. It’s an everywhere problem that every company should be aware of and any proactive CMO should take efforts to defend against.

If you become a victim to fabricated negative information, you will lose customers and fall out of favor in the public eye. It’s just that simple.

It’s important to understand exactly how fake news works so you can avoid it and preserve the integrity of your business. Although it might seem a touch dramatic to call it a war, that’s exactly what it is. There are any number of reasons why someone may want to demolish your business’s reputation. What’s really chilling is that smashing a corporate reputation is easier than you might think.

I wrote this article so CMOs can understand exactly how corporate fake news works, what it looks like in action, and how to defend against it.

The Looming Danger of Phony Corporate Information

Sensationally negative content is one of the deadliest weapons someone can use against your business. It is defined as “Information (especially in espionage or propaganda) disseminated as a response and opposition to other information.” However, you might know it by its colloquial neologism: fake news.

In short, corporate fake news is false information spread by people or entities who seek to defame a business. It makes claims that are counter to the business’ interests, and even if it’s not entirely believable, it can be damaging. In many instances, the bogus information is sensational and overblown. Sensationalism gets clicks. Look at these headlines and levels of Facebook engagement on the top five fake news stories of 2016.

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False online content can take the form of accusations, whistleblowing, or even news reporting. It may seem perfectly legitimate even though it’s not, making it frighteningly convincing.

This type of propaganda may seem like a recent phenomena. You probably recognize the phrase ‘fake news” from President Trump’s constant use of it. In reality, fake news has been around for centuries. The historian might recall how Benjamin Franklin’s newspaper was criticized for publishing controversial opinions and received its fair share of defamatory comment. Today, the destruction of corporate reputation primarily happens online, where it can often go viral and be seen by millions of people in a matter of days or hours.

We are living in the information age. This information can be both a pipeline of value and a conduit of catastrophe. Information can be dangerous. How dangerous? Take a look.

Fake Company Information in Action (And the Danger of Sock Puppets)

One of the most fascinating (and, for business owners, terrifying) cases is the fake news campaign created by Bell Pottinger throughout 2016 and 2017.

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In 2016, the now defunct public relations firm was hired by Oakbay Capital, the holding company of the now infamous Gupta family, three wealthy South African brothers known for their colossal business empire. Bell Pottinger was tasked with improving the Guptas’ image by essentially taking the spotlight off of them and their questionable political past.

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Officially, Bell Pottinger was asked to kickstart a grassroots campaign to help poor black South Africans. However, the brothers sought to exploit racial tensions within the South African economy. Specifically, they aimed to cement the idea that white business owners were depriving blacks of education and jobs. This was such a divisive move that Bell Pottinger cofounder Timothy Bell resigned.

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The company went forward with the campaign. However, it was employees and affiliates of the Guptas who put the fake news campaign into motion. The Gupta braintrust took to Twitter, creating over 100 fake accounts that pushed the Guptas’ agenda. Composing over 220,000 Tweets, the Guptas’ cronies used hashtags like #WhiteMonopolyCapital and #RespectGuptas to inflame race relations.

If that weren’t enough, the information was also disseminated via several mainstream media outlets owned by the Gupta brothers. Bell Pottinger, whose job was to monitor the Guptas’ social media, denied a large role in the campaign, but its role was the last nail in the coffin. The company declared bankruptcy in September, 2017.

This is a truly classic case of fake news. The campaign used nuggets of truth (like the fact that blacks still struggle economically in the post-apartheid culture) and sensationalized them, exaggerating the truth to create compelling narrative.

The Bell Pottinger case is also a prime example of how sock puppets can be used. A sock puppet is a metaphorical term used to describe a fake social media account created to parrot false information and boost a fake news campaign’s social presence. Since a sock puppet account takes only seconds to make, it’s very easy to create them by the dozens.

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Curious to see what counterinformation looks like from the victim’s side? Let’s take a look at a lesser known counterinformation scandal that occurred in 2015 when CNN ran a story on a hospital in Florida. CNN claimed that the death rate for open heart surgery on children at St. Mary’s Medical center was three times the national average. The feature, which ran on Anderson Cooper 360º, left its mark on St. Mary’s. Amidst the relentless backlash, the hospital suspended its pediatric cardiac surgery program (except for emergencies) and then closed the program altogether. The scandal even forced CEO Davide Carbone to resign.

Carbone wouldn’t go without a fight, however, and filed a defamation suit, claiming that CNN had inflated the statistics and ignored crucial information in order to sensationalize the story. Michael Black, head of the pediatric cardiac program, filed a similar lawsuit. CNN attempted to dismiss both cases, but judges ruled to keep them in court. Even though Carbone and Black may win in court, the damages are still palpable; the pediatric cardiac program at St. Mary’s is still closed today, and Carbone has found trouble gaining new employment.

These two cases only scratch the surface of what false or incomplete online information is capable of. You’ve seen how it can be used against others and how dramatically it can affect its targets.

Let me reiterate the message of this article. Death by propaganda is not a wispy, distant threat, lurking on the fringes of possibility. It is an ever-present danger.

The Consequences of Corporate Fake News

It’s tempting to think that a small or medium-sized business can’t suffer the same fate as a larger, more established corporation. Unfortunately, that’s wishful thinking. If your business is attacked by negative content agents, the possibilities are endless. You could find yourself in the same place as St. Mary’s, forced to cut employees and even shut down part of your business.

It doesn’t matter if you’re the victim; false information can annihilate innocent businesses, and that fact alone should send CEOs and CMOs scrambling to find a PR firm or reputation repair agency. Unfortunately, most of the time, they’re making the frantic calls after the fact — after the damage has been done.

There are many other consequences that may not be as dire but are nonetheless still impactful. Fake news affects stock prices. It happens in near real-time, as it did in 2013. A $130-billion stock implosion shook Wall Street after a fake tweet about an explosion that injured then-president Barack Obama.

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If enough rumors circle about your business, you may very well find your stocks performing poorly. Losing customers in droves (and therefore losing revenue) is also a tangible possibility.

Remember the Pizzagate scandal that accused D.C. pizzeria Comet Ping Pong for being a front for a child slavery ring?

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The results were dire. The restaurant lost customers, and its Facebook and Yelp pages was inundated with obscene reviews even though the scandal was nothing more than a hoax. Owner James Alefantis even received death threats, and people went so far as to leak employees’ home addresses online. Comet Ping Pong eventually bounced back, but the pizzeria is still shaking in the aftershocks.

Information warfare is more powerful than you might think. It can single-handedly close businesses and create employment barriers for disgraced employees and affiliates. Yes, it’s definitely frightening, but that means you have to be aware and vigilant about protecting your business.

How Do You Know If You’re At Risk for an Attack?

There are plenty of reasons why people or businesses might launch an attack against your business. Even if your business hasn’t been part of any drama in the past, it could still be a target for disinformation in the present.. The slightest mark against your company could easily be amplified and twisted into a serious reputation problem by someone seeking monetary, professional, or personal gains.

Here are just a few of the reasons someone might initiate a negative information attack against your business:

  • You’ve recently experienced substantial company or financial growth
  • One or more of your employees does or says something controversial (e.g., makes an impulsive social media comment, gets arrested, makes the news for something questionable)
  • A data breach occurs
  • Disgruntled customers come forward (whether by leaving poor reviews or otherwise)
  • Your business or employees expressly share their opinions on hot-button topics like politics or religion
  • You’ve done anything to provoke or anger a competing business

While there are many motivations for an attack, these are some of the most common. Each of the reasons listed above have launched offensives upon businesses in the not-so-distant past. Individuals or companies who disseminate this kind of fake news are always looking for weak links. If they find one, they’ll exploit it, and if they find several, they’ll have a field day.

Keep in mind that some of these reasons have nothing to do with your business itself. For example, one poorly worded or controversial social media comment from an employee can stain your entire company’s reputation. It’s especially damaging if that employee is an executive, as Uber painfully found out when a clip was leaked of CEO Travis Kalanick yelling at an Uber driver about the status of the company’s UberBlack premium services. The incident made headlines nationwide and upset many other Uber drivers.

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In many cases, monetary gain is the main reason for negative propaganda. If someone believes they can sue you for damages of some sort or otherwise effectively blackmail your company into obeying their demands, they just might go through with it.

Let me provide one not-hypothetical situation so you can visualize a real-world rollout of the phenomenon. A company, let’s call them Widget Corp, is doing well. Healthy profit margins, happy CEO, merry employees. Another company, let’s call them Evil Investment Inc., believes they can make bank off of Widget Corporation’s optimism and growth. So they hire a nefarious PR firm, short Widget’s stock, and unleash a torrent of fake news. The tide of negative online content causes Widget’s stock to plummet, leaving Evil Investment Inc. with an outstanding surprise investment.

See what happened? A well-planned maneuver by Evil Investment Inc., basically destroyed Widget Corp. Widget Corp was just minding their business, doing good business and making a profit.

In case you’re still wondering if you’re at risk, consider that fake news doesn’t have to take the world by storm to have a significant effect. Fake news aimed at a business at a local level can still irreparably damage a business and may force it to shut down.

So yes, you are at risk, and you could be attacked at any time.

How to Protect Your Company From Negative Content Campaigns

Since an information attack can strike you at any time, it’s vital that you have plans in place. You need to be aware of the possible threats that can be executed against your business and how to prevent (or defend yourself from) them.

There are a few steps you can take to proactively protect yourself.

1. Admit your mistakes when they happen

Part of the reason corporate fake news attacks can be so effective is because they typically use old mistakes and twists them to fit a certain narrative. You can nip this in the bud by owning up to your mistakes as they happen so that no one can turn a blunder into a weapon to be used against you. It’s a simple tip, but it can be instrumental in protecting you from this type of reputational damage.

2. Create robust, rapid-response plans for each negative content risk

First, brainstorm reasons why someone might use fake news against your organization. For each reason, develop a thorough response plan with actionable steps. For example, if you think a competitor may use a negative narrative in an attempt to discredit you or put you out of business, think of what that information might be, and prepare to fight it with facts and transparency.

3. Develop a positive social media presence

The saying “the best defense is a good offense” certainly applies to preserving your reputation in the face of fake news. One way to do so is by developing a healthy and customer-first social media presence. Just like rapid-response plans, a good social presence relies on facts and transparency. If your company is known for a friendly, open social presence, you’ll have the advantage when a problem arises.

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4. Reinforce employee conduct policies

Employee misbehavior is an incredibly easy target for information warfare campaigns. Again, the best protection is prevention. Make sure your employees all understand and follow company policies related to behavior inside and outside of the workplace. If your employees are tweeting controversial political opinions to a wide audience, that may cause problems in the future.

5. Conduct reputation management on executives

Finally, make sure executives in your company are specifically defended against this type of information attack. Since executives are often the target of fake news, they’ll especially need protection. Here’s a case study we released on executive reputation management to give you a behind-the-scenes peek at dealing with this.

Conclusion

While “fake news” has become something of a humorous phrase, it’s no joke. Negative content campaigns have been known to incinerate businesses and permanently harm executive reputations. Even a little bad news, properly promoted, can go a long way, so it’s essential to have plans in place if your company is ever the victim of fake news.


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Author: Daniel Threlfall

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