How can social media affect product recalls?
Product recalls are a common part of operating a company, and also an area which many communications professionals will have experience in handling. Not only do product recalls involve communicating directly with those affected, they also require managing any media coverage and preventing misinformation from spreading. The impact of modern product recalls has also been…
Product recalls are a common part of operating a company, and also an area which many communications professionals will have experience in handling. Not only do product recalls involve communicating directly with those affected, they also require managing any media coverage and preventing misinformation from spreading.
The impact of modern product recalls has also been substantially affected by the impact of digital media – and social media in particular. While these tools offer a new opportunity to communicate to the public, they also amplify the impact of other information sources.
In order to better understand the impact of social media on product recalls, a recent study considered how these tools are changing the communication of major product recalls. The research, published in the Journal of Accounting Research, involved 405 product recalls and aimed to understand whether social media can help or hinder a firm’s attempt to recall their products.
The study revealed that company communications can play a positive role in mitigating the reputational impact of a product recall. In cases where companies have consistently communicated an issue through social media, they had much more success at shaping this online narrative.
On the other hand, higher rates of tweets by other users led to a more negative perception, with these sentiments exacerbating a negative market reaction. In general, however, a strong corporate social media presence was found to reduce negative sentiments expressed online.
As the research tracked different product recalls over time, it was also able to establish how the effectiveness of a social media strategy has changed over time. The study revealed that when social media was a relatively new medium, companies found it easier to shape the dialogue online. However, as it has evolved, companies are finding it harder to manage an online discourse.
With social media continuing to evolve, the challenge is now for organisations to invest in a social media strategy that can ensure their online reputational risk management efforts succeed where necessary.
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