AOL’s Social Media Disaster – A Lesson in Brand Management

Those of us engaged in marketing and promotion frequently look at social media channels as a way to distribute messaging, as part of brand building efforts, and for simple social engagement. Managing a good brand image requires taking care of the customers, managing feedback and making every effort to resolve customer disputes fairly and to the satisfaction of the consumer. Satisfied customers are of course the best brand ambassadors.

Brand Management – There are No Secrets!
Managing one’s brand image used to require crafting a unique and positive message and then distributing it via one-way media channels to impact consumer opinion. The emergence of social media changed all that. Social channels enable individuals to respond to company messaging, product claims, value propositions and customer service issues. Consumers share their experiences and opinions online for all to see – outside of the control of company brand managers.These opinions make or break the organization’s brand image.

As use of social media platforms have exploded in recent years, consumers impact brand image by simply responding to issues and posting their opinions. And because of the wide reach of social communication, consumers have more of an influence over company brand image than does the company communications office. Although brand image can be influenced by the company, in the end, an organization’s brand image is firmly under the control of those that interact and engage with the organization.

There are no longer any secrets. Any poor customer service effort, product failure or service inconsistency has the potential to negatively impact the company brand.



Workers Enter the Brand Discussion
As social media reach becomes even more extensive, consumers aren’t the only ones that impact a company brand. The recent AOL flip-flop on its 410(k) program is a perfect example. AOL changed its 401(k) contribution schedule to a once-per-year contribution, instead of the normal month-to-month contribution. Anyone leaving the company’s employment during the year would then not receive her/his 401(k) contribution that they would have received under the original plan.

Horrible Messaging
Apparently not satisfied with upsetting company workers with the 401(k) plan, Tim Armstrong, the chief executive of AOL compounded the problem. In trying to justify modifications in the company’s health insurance coverage, said “We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were O.K., in general.” Many in the organization felt that the comments were inappropriate, especially in light of AOL’s positive earnings.

Company employees were not happy with either the retirement account policy change or citing expensive examples as reasons to modify health insurance coverage – and they said so using their personal social media networks.

In the end, AOL had to reverse the 401(k) policy and Mr. Armstrong had to issue an apology for his comments on the cost of healthcare for two AOL families. What in past years may have been largely internal issues, were fully broadcast into the world and the company had to handle these issues as part of its external brand.

Marketing Moves Internal
Not only do happy customers produce a positive brand image, happy workers produce the same result. So, managing the workforce is now more important to the company’s brand image than ever. Company management decisions are now highly public and subject to comment and reaction. The Human Resources Manager might be surprised to find him/herself one of the more important marketing officers in the company, but realizing that workers are social beings can go a long way towards building a positive company brand.


Matthew Stone operates Denver SEO Consultants and works in Public Relations Denver for GroundFloor Media.


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