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The Effects Of Social Media On Corporate Bad News And A Ceo 's Apology

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Social media has become prominently popular. Tens of millions of users login to social media sites like Twitter to disseminate breaking news and share their opinions and thoughts. For businesses, social media is potentially useful for monitoring the public perception and the social reputation of companies and products. Despite great potential, how bad news about a company influences the public sentiments in social media has not been studied in depth. The aim of this study is to assess people’s sentiments in Twitter upon the spread of two types of information: corporate bad news and a CEO’s apology. We attempted to understand how sentiments on corporate bad news propagate in Twitter and whether any social network feature facilitates its…show more content…
Nowadays, however, the public expects companies to apology promptly (within 24 hours) and response directly via social media—the channel in which a crisis occurs. One of the first companies to experience a serious and global damage in its reputation due to the spread of bad news in social media is Domino’s Pizza. The crisis started when two employees produced and uploaded a vulgar YouTube video in 2009. Within a few days, the video gained more than half a million views, major news media covered the event, and people started to discuss the incident on social media. Domino’s soon released a YouTube video where its CEO apologized and explained the situation. We paid attention to the Domino’s crisis in Twitter, because from the beginning to the end the medium played a central role in spreading both the bad news and the apology. First, the crisis started in YouTube, but soon it was picked up by users in various social media sites. Twitter was one of the key places where discussions took place. Based on our estimation, more than 15,000 Twitter users posted a message about the event, Second, Domino’s apologized on Twitter by sharing a link to its CEO’s apology on YouTube. This study makes three contributions. First, we demonstrate the benefits of analyzing the actual social media conversations on a crisis situation. Before social media existed, it was extremely
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