Fortune 1000 Senior Executives Slow to React to the Growing Credibility of Corporate Blogs, New Survey Concludes; Almost Half of Respondents Lack Corporate Blogging Policies, Although 77% Believe They Should Have Them

NEW YORK--(BUSINESS WIRE)--May 3, 2006--While Fortune 1000 senior executives at top companies have blogs on their radar, The Makovsky 2006 State of Corporate Blogging Survey, conducted by Harris Interactive(R), concludes that they are slow to react to the growing credibility of corporate blogs as a communications medium. The study, released today, found that only minorities of top executives surveyed are convinced to "a great extent" that corporate blogging is growing in credibility either as a communications medium (5%), brand-building technique (3%), or a sales or lead generation tool (less than 1%). In contrast, most executives are somewhat or not at all convinced of blogs' growing credibility in these areas, (62%, 74%, and 70% respectively).

Moreover, the Makovsky survey revealed that nearly half of senior executives polled do not have corporate policies pertaining to blogging, although 77% believe that their organizations should address such policies.

"This reflects that the credibility of corporate blogs, whether sanctioned by the company or written by others, is growing, but that executives at top companies are slow to come to grips with recognizing their importance in building a dialogue with customers and other stakeholders - including critics," noted Robbin S. Goodman, Executive Vice President of Makovsky + Company, a leading independent global public relations and investor relations consultancy.

The national telephone survey of 150 senior executives (directors and above) of a cross-section of Fortune 1000 companies was commissioned by Makovsky + Company, and conducted by Harris Interactive(R) in February 2006.

Among other highlights of the survey:

-- Even though 12% of senior executives say their companies have taken legal or other action in response to a blog, only 20% report having a formal process in place for monitoring blogs written about the company.

-- A minority (15%) say that someone in their organization is currently writing a blog related to the company or its activities.

-- Only one in five (21%) report reading business-related blogs once a week or more frequently.

-- Only 30% of senior executives report that they have a thorough understanding of the term "Internet blog."

-- Forty percent believe that their companies should have corporate policies to address the writing of blogs unrelated to the company or its activities. This compares with the 77% who believe their companies should have such policies concerning the authoring of blogs sanctioned by the company.

-- Further, 8% report organizing a team of dedicated people to write sanctioned blogs about the company and its activities.

-- Three percent said their company changed its product, service, or policies because of publicity generated by a blog written about it.

"We have a snapshot of the beginning of a corporate activity and a medium which is set to grow rapidly and to become very important to corporations around the world," said Humphrey Taylor, Chairman of The Harris Poll(R), Harris Interactive. "Companies that do not recognize this trend and take action to capitalize on it will miss out on valuable opportunities and run the risk of being blindsided by unfavorable publicity."

Defining a new medium

A blog, short for "weblog," is a website that typically combines text, images and links in a kind of personal journal. Easy-to-use publishing tools enable the blogger to share news and opinion instantly and worldwide. According to blog search engine Technorati, there are more than 37 million blogs on the Internet today and new ones are being created at the rate of 75,000 a day (or, one per second).

"Blogging can help to make or break a corporation's reputation," says Makovsky's Goodman. "As blogger Jeff Jarvis has said, 'Today, when you lose a customer, you don't lose just that customer, you risk losing that customer's friends. And thanks to the Internet and blogs and consumer rate-and-review services, your customers have lots and lots of friends all around the world.'"

Last summer, when Jarvis's calls and emails to Dell about a defective computer brought no satisfaction, he launched a series of critiques of the company in his blog, BuzzMachine. Daily visits to the blog doubled and hundreds of readers posted their own complaints. Ultimately, the story was picked up by BusinessWeek in an article titled "Dell in the Bloghouse."

"The same characteristics that make the Web an ideal medium for positive communications - namely immediacy, speed, ease of use, and the pass-along effect - are also ideally suited to the spread of negative publicity," says Goodman.

Minimizing risk

In commenting on senior executives' belief that their companies should have blogging policies for sanctioned and unsanctioned blogs, and even blogs unrelated to the company or its activities, Goodman says, "Most of the companies are probably relying on preexisting corporate policies on related issues, such as confidentiality, protecting corporate reputation and Internet use at work. But a proactive approach to blogging is in the best interest of the corporation, as our survey respondents clearly acknowledge. The reactive approach -- litigation or firing an employee for an offending blog -- affects the reputations of everyone involved."

While blog-related firings are still relatively rare, employees and contractors have reportedly been terminated for indiscreet blogging by a number of major companies, including Starbucks, Delta Air Lines, Wells Fargo and Kmart, according to news reports.

"The protection of the First Amendment doesn't apply to Americans in the environment of a private employer," says Makovsky's Goodman. "Smart companies take the initiative to develop the policies necessary to preempt potential problems, without stifling blogs that create valuable dialogue for the organization."

The burgeoning blogosphere

According to the Fortune 500 Blogging Wiki (http://www.socialtext.net/bizblogs/index.cgi), as of April 18, 2006, only 29 (5.8%) of the Fortune 500 reported active public blogs written by their employees about the company or its products.

"The vast majority (77%) of executives in our survey report that no one in their organization is writing a corporate blog," says Goodman, who attributes the comparatively slow adoption of corporate blogging as a communications strategy to the relative lack of awareness among senior corporate executives of the potential benefits of the new medium.

"This is a lag that needs to be rectified," she adds. "Whether they are used to demonstrate expertise, share knowledge, improve customer satisfaction levels, support a product brand or burnish a company's reputation, blogs should be an essential element of every corporation's communications strategy."

Methodology

Harris Interactive(R) conducted this survey on behalf of Makovsky + Company using its Executive Omnibus(TM), a nationwide telephone survey of 150 leading executives in Fortune 1000 companies of whom 144 had at least heard of the term 'corporate blogging'. The survey was conducted between February 8 to 28, 2006, and the executives interviewed were from a broad range of industries, services, locales, and sizes of companies. Data from this sample are not weighted and are representative only of the body of individuals surveyed. In theory, with a probability sample of this size, one can say with 95 percent certainty that the results have a sampling error of plus or minus 8 percentage points.

These statements conform to the principles of disclosure of the National Council on Public Polls.

About Makovsky + Company

Founded in 1979, Makovsky + Company (www.makovsky.com) is today one of the nation's leading independent global public relations and investor relations consultancies. The firm attributes its success to its original vision: that the Power of Specialized Thinking(TM) is the best way to build reputation, sales and fair valuation for a client. Based in New York City, the firm has agency partners in more than 20 countries and in 35 US cities through IPREX, the third largest worldwide public relations agency partnership, of which Makovsky is a founder.

About Harris Interactive(R)

Harris Interactive Inc. (www.harrisinteractive.com), based in Rochester, New York, is the 13th largest and the fastest-growing market research firm in the world, most widely known for The Harris Poll(R) and for its pioneering leadership in the online market research industry. Long recognized by its clients for delivering insights that enable confident business decisions, the Company blends the science of innovative research with the art of strategic consulting to deliver knowledge that leads to measurable and enduring value.