Thursday, August 28, 2008

Consumers in Charge: Shaming Brands with Social Media

We've already seen it many times, and it will happen many, many more times in the future. The sweep of the Internet combined with the power of Social Media is amplifying brand missteps and furnishing mass media-like reach to consumers. Situations that a couple years ago would have been small and contained today are making an impression upon thousands and even millions of customers, prospects, and investors.

Here's a recent example: A wine critic perpetrated a hoax upon Wine Spectator magazine. He created a Web site for a fake restaurant, then submitted the restaurant for the magazine's award of excellence. Despite the fact the wine list was "well-stocked with dogs" likened to "paint thinner and nail varnish," the imaginary restaurant won the award. The critic, Robin Goldstein, believes his prank proves that Wine Spectator is more interested in the award entrance fee than with maintaining minimum standards.

Goldstein posted his story to his Wine Economics blog and to the fake restaurant's blog. From there it was picked up by the Chicago Tribune and LA Times. The story has been carried further on beverage-related blogs such as Daily Blender and Scotch Talk. A Google search on the faux restaurant's name results in more than 70 news article hits from around the globe and almost 3,000 Web hits. In the last several days, dozens of Twitter users have Tweeted the news and links to thousands of followers. Wine Spectator's Wikipedia entry has already been updated with the incident, ensuring the magazine will be associated with the award embarrassment for years to come. The publicity has put Wine Spectator on the defensive; they posted a response, including accusations Goldstein isn't telling the entire story, within their online forum.

The interesting aspect of this is that Goldstein presented details of his hoax at a meeting of the American Association of Wine Economists, a group that I'm guessing doesn't even number in the thousands. Not so many years ago, Goldstein's story would've been an amusing tale passed among a small group of elite wine professionals, but today the story is being heard by hundreds of thousands. In less than two weeks and with a budget that I suspect is $0, Goldstein has reached an audience that is much greater than Wine Spectator's circulation of 350,000.

Remember the good old days when we used to be concerned that a consumer who experienced a bad customer service situation would tell 10 or 20 people? How does 1.3 million sound? The reach, power, and economy of Social Media can perhaps best be demonstrated by one of the most often repeated stories of Social Media embarrassment: the sleeping Comcast service tech. To date, the famous video shot by a disgruntled customer has been viewed almost 1.3 million times.

Just a decade ago, getting DVDs into the hands of 1.3M people would've required an investment of millions of dollars for replication, packaging, and postage (even assuming you already had a list of 1.3M addresses). But in 2007 , a "regular Joe" with no special marketing contacts or media acumen was able to get his video in front of that many people for a budget of absolutely nothing.

There was a time not long ago that brands and media partners controlled every means of mass communication; today, a guy who bathes in a Burger King sink has practically the same reach as the $3.5 billion fast food chain. Sure, Burger King has the power to blast messages across network television and reach every person who watches "Dancing With the Stars," but the advertising message doesn't hold interest, create buzz, or stick in the mind like one gross kid in a sink.

We can't be sure, but it seems likely that Wine Spectator, Burger King, and Comcast have collectively suffered financial losses that total in the hundreds of thousands of dollars in reduced sales, damaged reputation, and PR crisis management. And all it took was three people clicking "Submit" buttons.

In the future, you will hear a lot about how Social Media shifts power away from brands and towards consumers. The Wine Spectator, Burger King, and Comcast examples plainly demonstrate what this means.


Anonymous said...

Wow, this is an incredible case study. I hadn't heard about it before, so thanks for sharing in such detail.

While the incident is unfortunate, hopefully others will learn from the experience, right?

Augie Ray said...

Thanks Aaron,

I appreciate the comment. I think we've just begun to see the ramifications of brands losing control to consumers via Social Media. So far, the embarrassments have been painful but not fatal. I'm expecting sometime in the future we'll see the first huge disruption--something so big that it causes a lasting financial impact on a a major brand. That may be when businesses begin to really take notice of what transparency means in Social Media.