Your brand is at risk and everyone is watching

June 24, 2021 · READ

Whether your brand is at risk is not a question of “if”, but “when”.

The corporate risk landscape has become a free-for-all where actors originate or accelerate their agendas online through digital chatter to manipulate consumer activism, socio-political divisiveness, social justice action and protests, market disruption and volatility, environmental crises, and the fallout of the global pandemic.

Unfortunately, companies often become a target of the negative narrative, and their reputations are called into question. This impact is reflected in recent headlines, including activist boycotts over companies’ silence on new voter legislation, or groups targeting specific stocks via WallStreetBets. It’s enough to put any brand in perpetual crisis mode.

To get a better understanding of this polarized environment, as recently reported in Ethical Boardroom, Resolver commissioned Forrester Consulting to conduct a Total Economic Impact™ study on the potential return-on-investment Resolver clients can realize by deploying our actor-centric risk intelligence solution. Such solutions are designed to help clients mitigate risk, improve efficiency, and prevent crises.

What follows is a summary of Forrester’s findings on the expanding risk landscape and the actors who intentionally or unintentionally amplify it.

The brand risk landscape continues to grow

Political, economic, and technological changes are accelerating market forces, creating greater volatility, eroding consumer confidence, hampering investment, and stalling new product development. At the same time, the perception of reliable information is at an all-time low. Only 47% of surveyed online adults in the US who use social media at least weekly say that they can identify stories that are fake, while only 22% trust information they read about the pandemic, politics, and elections, according to a 2020 Forrester survey.

Propelled by this mistrust, today’s empowered consumers are more opinionated, proactive, and vocal than ever. The proliferation of digital and social touch points enables consumer sentiment and judgments to spread like wildfire, often overpowering corporate messaging. At the same time, there are actors intent on taking advantage of this situation to propagate their malicious agendas through digital chatter.

This burgeoning risk landscape means companies must act quickly to anticipate these narratives to avoid expensive brand crises. Brands need to respond in a timely, if not immediate manner, rather than be stuck in reactivity mode, endlessly responding to crises. It is essential that organizations develop resilience as the world undergoes a period of pervasive, accelerating change.


Brand risks materialize from many sources

Company leaders are starting to recognize the gravity of risks posed by digital chatter on social media, and they are realizing that actors can intentionally or unintentionally use this channel to damage brand reputation, affect operations or reduce revenue.

This digital chatter can take the form of:

  • Disinformation, misinformation, false narratives, misrepresentation, and misleading content.
  • Antagonistic, harmful, or illegal content.
  • Violence and threats against employees, customers, brand VIPs and ambassadors, or physical sites and assets.
  • Leaks, breaches, and other cybersecurity incidents.
  • Scandals or hate speech.
  • Political and social polarization, activism, and campaigns.
  • Misinterpreted, inauthentic, or polarizing statements regarding social issues.
  • Coordinated physical or digital events and campaigns.
  • Large, repetitive volumes of undesirable, hurtful, or irrelevant content.
  • Content linking extremist views to a brand to claim legitimacy, known as hatejacking.
  • Missed adverse events or compliance failures.
  • Unknown unknowns.

It can be amplified both intentionally or unintentionally by:

  • Dissatisfied customers or employees.
  • Celebrities and influencers.
  • Competitors.
  • Misinformed social media users.
  • Bad actors with malicious intent and trolls who intentionally antagonize.
  • Conspiracy theorists.
  • Individual activists, ideological objectors, politicians, and activist or political organizations.
  • Sensationalist, partisan, activist, or biased media.
  • Terrorists and hostile governments.

Unfortunately, brands struggle to identify and act on this myriad set of risks that are originated and amplified by actors through their digital chatter. To be able to effectively respond before the sparks of risk become the blaze of a crisis, brands must remain vigilant to quickly identify and address the actors behind known and unknown risks.

How brands can counter accelerating risks

In the face of rising risks, most major B2C brands face multiple crises per year. These crises can lead to significant recovery costs, lost sales, disrupted operations, security risks, and erosion of hard-earned brand reputation. As reported in the Forrester study, there is a high awareness among top B2C publicly held companies that a damaged reputation can threaten business results.

In an in-depth review of 75 companies’ 10-K reports, Forrester found that:

Brand crises can often be avoided when risks are quickly identified and acted on. Even when crises occur, swift action can significantly reduce losses or even turn a crisis into an opportunity. The early signals found in digital chatter from actors can provide the additional time needed to mitigate a risk before it presents itself, or better prepare to minimize the damage if the risk becomes a reality.

The Forrester TEI study found that Resolver alerts customers to critical risks and the actors behind them within 30 minutes, provides intelligence to cut through the noise, and enables customers to prevent and lessen the impact of brand crises. The study concluded, for a composite organization representative of interviewed customers, that Resolver delivers a three-year risk-adjusted ROI of 572% and an NPV of $7.2 million.

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