The interconnectedness of the world has made it easier for reputational risks to spread quickly. A single bad review or a negative story can quickly go viral and cause significant damage to a company’s reputation.
In the past, companies could more easily control the information that was available about them and their products. Today, with the rise of social media and news cycles that never sleep, it’s much easier for customers and other stakeholders to access information and share their own experiences. Not only that but there are new platforms popping up all the time where consumers can air their complaints and review brands. As a result, companies need to be proactive in monitoring their reputation, responding to negative feedback and staying on top of all the different platforms out there.
This increased transparency and interconnectedness have made reputation management more important than ever for companies. For solutions that help companies monitor their reputation, having a reliable stream of up-to-date web data is essential to mitigate the chance of damaging news falling through the cracks.
What is reputational risk?
Reputational risk is the fallout that can happen if a company suffers damage to its reputation as a result of actions that don’t match stakeholder expectations. This can include things like negative publicity, legal action, or even just a loss of customer confidence. Reputational risk management is a type of brand monitoring, where companies track and measure how they’re mentioned online to better understand public sentiment toward them.
The reputational risks companies face today include everything from damaging news stories to negative social media posts and even real-world crises. Additionally, risks can come from a company itself through its own actions, or as a result of the actions of one of its employees or partners. Any of these can cause serious harm to a company’s reputation, which is why gathering reliable media intelligence such as breaking news stories has become so important.
Reputational risks facing businesses today
According to a survey, when a company has a positive reputation, only 25% of stakeholders will believe negative information that they hear once or twice. By comparison, companies with a negative reputation don’t inspire as much trust in stakeholders, with 57% of them willing to believe the negative information they hear.
When it comes to protecting a company’s reputation, the risk can come from any angle, so solutions that handle risk intelligence need to be constantly monitoring news for different stories. Here are some common stories reputational risk management solutions should be monitoring:
- Negative publicity – Negative public mentions of a company, such as on social media, in reviews, or in public legal trouble can paint a company in an unfavorable light
- ESG risk – A company’s reputation could be at stake if it’s perceived to be irresponsible in its environmental or social practices
- Supply chain – The inability to meet customer demand due to supply chain disruptions can impact the reputation
- Operational risk – Recalling products, shutting down production, or mass layoffs due to mismanagement can damage a company’s reputation
The challenges of monitoring reputational risk factors
Businesses want to minimize the chances of their reputations being negatively affected. When they seek out monitoring solutions, they’re looking for ways to not only be aware of risk factors when they arise but also to remain a step ahead to try and avoid risky situations altogether.
This presents a challenge for reputational risk monitoring solutions, as they need to constantly remain effective at collecting and analyzing data in order to provide the client with accurate and actionable insights. Some factors monitoring solutions need to contend with include:
- Monitoring for changes in a developing new story that could negatively impact a company’s reputation
- Following an event that has a direct impact on reputation and its aftermath to learn lessons and improve the contingency plans
- Identifying all the stakeholders who could be impacted by a reputational event
- Assessing the potential severity and likelihood of an event
- Measuring the different ways that a company’s reputation could be at risk
When monitoring reputational risk, you want to have all the pieces of the puzzle to see the full picture. The main connector between all these challenges when it comes to monitoring reputational risks is that if you miss one of them, it’s like missing a piece of the puzzle, and that can lead to damaging a company’s reputation. Access to reliable, up-to-date, easy-to-process data is the only way to ensure you’re seeing all the pieces of a puzzle so that a company can take action based on a completed picture.
How News API can help monitor reputational risk
Brand monitoring solutions today are straining to keep up. Their existing tools and methodologies aren’t robust enough to deal with a progressively digital world. In fact, when asked about the biggest challenges related to monitoring and measuring reputational risk, 51% of risk managers said that a lack of reliable data was impeding them from doing their jobs.
For risk monitoring to be effective, the data that informs monitoring tools needs to be consistently reliable. This is where selecting the right news API can help fill in the gaps of missing data. A news API can help reputational risk management by allowing users to track media coverage and public sentiment around a company. This can help identify potential issues early on and allow the company to take a proactive approach to damage control.
Webz.io’s News API solution provides reliable, up-to-date data for monitoring solutions, so that the sourced data used to help companies monitor reputational risk is more complete. Webz.io’s News API tool benefits monitoring solutions in a number of ways:
- Wide coverage – With web data stemming from over 1 million sources in 170+ languages and countless news sites from around the world, you can be sure that your reputational management measurements are based on conclusive data.
- Low latency – With data updated in near real-time, Webz.io’s News API ensures that you won’t miss any key news items or breaking stories that can have an effect on a company’s reputation.
- High quality – Webz.io’s News API only uses high-quality data sources and also assesses sentiment behind the content, making it easier for a monitoring solution to assess negative press that can have an effect on reputation.
In addition, with News API, you also get access to 50TB of historical data dating back to 2008, so you can see how a brand’s reputation has trended over time. Other Webz.io APIs can help paint an even wider picture, with blog, reviews, and forum APIs to enable you to pull data from additional sources.
Wrapping up
When news moves quickly, a risk monitoring solution needs to move quicker, especially when it comes to handling something as delicate as a company’s reputation. The data that feeds your reputation monitoring tools will determine how accurately you’re able to measure potential risks. Using a News API for your monitoring solution is the best way to establish a steady stream of data that can be relied on to mitigate and handle reputational risks.
Talk with a data expert to better understand how Webz.io’s News API can help you improve your reputational risk management solution.
