Ipsos Corporate Reputation

The Spread of Techlash

How can businesses respond to the reputational challenges of technological change – including privacy, data leaks, advertising practices, and AI
and automation?

Technological backlash doesn’t just affect tech companies; a majority of Reputation Council members across all sectors say that tech issues, particularly around the use of personal data, have become more important to them.
There are three key areas that communicators need to watch out for to protect companies’ reputations: data security, new international regulations and standards, and fake news.
Techlash is no different to the reputational challenges that many other sectors have faced in the past, and traditional communications techniques – understanding different stakeholder perceptions, message testing, horizon scanning, and crisis preparedness – are key to tackling the threat.

If you’re not worried about the impact of techlash on your company, perhaps you should be.

Techlash was defined by the Financial Times as ‘the growing public animosity towards large Silicon Valley platform technology companies and their Chinese equivalents’ when it chose the term as one of the defining words of 2018.

But technology issues are increasingly shaping the reputations of businesses in every sector.

Our own Ipsos research shows that these concerns are key issues for stakeholders, particularly around data privacy, where lack of understanding means groups as diverse as media, consumers and government make assumptions about how their data is being used and misused by companies in practices that aren’t explained.

WHICH, IF ANY, OF THE FOLLOWING ISSUES DO YOU THINK HAVE BECOME MORE IMPORTANT SINCE TECHLASH STARTED?

Council members have plenty of advice for preparing for these issues, but Ipsos says: keep ahead of what stakeholders know (or think they know) about your company.

In 2018, tech companies came under scrutiny again – this time, not because Apple was claimed to be funnelling profits through Dublin, or Samsung phones were exploding, but for reasons much more closely tied to their core business: data use and misuse by tech firms and third parties, ‘fake news’, and the threat of hackers.

of Council members expect data and privacy issues to affect their own companies.

But these issues don’t just affect tech companies any more. Three quarters of Council members say that transparency around data collection and usage has become more important to them since techlash started, and more than half are concerned about ‘fake news’.

The vast majority (86%) of Council members expect these issues to affect their own companies – and those who don’t either don’t require personal data for their business model or are confident that they have prepared enough already to avoid being affected.

There are three particular areas that Council members mentioned when we asked why they expected techlash to affect them.

All companies are data companies now

There are few companies in the world which don’t collect data as part of doing business, whether that’s consumer, supplier or client information. As one Council member put it, “companies will become just as much data companies as they are health companies.” The smart dashboard in your car means that companies like Nissan or General Motors hold much more data on customers than even 20 years ago. Supermarkets can email you when your favourite brand of toilet paper is back in stock.

The more data is collected, the more stakeholders want to know what exactly the company is doing with the data. In the era of smartphones, many of the data connections are transparent but baffling – why does your new gaming app need access to your Facebook data? For some companies, data security is nothing new.

Council members in the banking sector claim that they are ahead of the curve, having had stringent data protection mechanisms in place since before the World Wide Web. Being early adopters has paid off: Ipsos Global Trends data from 2016 shows that more people trust banks with their data than any other type of business. For other companies, it will mean a change in how they think about themselves.

No matter where you work, working in corporate communications means you may soon face questions about what data your company collects and how it is shared and used.

"The big challenge is that the digital world is based on data, while our company is not used to dealing with data. We need to develop competencies and expertise in data management and privacy. Developing new competencies is always a big challenge."
"We will have to review and follow the legislation on private data that has just arrived in Europe. It is necessary to discipline the company, establish rules and criteria to respect these laws. So the impact on the company is difficult, but it does not endanger the life of the company, we just have to adapt the organisation."
Europe regulates the world

2018 was the year that the European Union’s General Data Protection Regulation (GDPR) took force – and you could hardly avoid it. Certainly, our Council members around the world felt its force. Communicators working in Europe mention the steps their companies took to become compliant – but in our interconnected world, what happens in Europe has ramifications much further afield. Some Council members from outside the EU say that they have taken GDPR as their starting point, both for dealing with European stakeholders (a legal requirement) and for assumptions about how data protection standards might be rolled out across the world in the future.

We know from our wider research that the general public in the UK are more clued up on GDPR than you might expect.

Its adoption has not yet started to make an impact on how much the public trust the organisations and industry sectors that use our data most frequently and on the largest scale. But communications leaders should expect a more knowledgeable public to ask more questions in the future.

Fake News

The word of the year from 2017 shows no signs of going away in 2019. Communicators must still watch out for the implications of fake news scandals. They can happen in public places (the new town halls of Facebook and Twitter) or in private groups (encrypted services like WhatsApp), and each location requires a radically different response from communicators.

"Nowadays, on social networks, people often build their own fictional world, pretending to do wonderful things that they do not actually do. Conversely, [we have] real incredible stories to tell and, paradoxically, find it difficult to prove that such stories are true."

Council members talk about two of the main threats from fake news.

Lies about their companies can spread like wildfire, and corporate rebuttals don’t have the same virality as the initial stories. One Council member states:

"Power is actually in everyone’s hands. Today a fake news [story], if well crafted, does not have to be made by a large vehicle, and it has a greater destructive potential than anything else."
"You have to understand how you can use this digital world in a healthier way by letting people know that your [communications] are not fake news, they are not untruths. When I run a campaign, I have to have a certain credibility."

All companies have good stories they want to tell, but some Council members fear that the pervading atmosphere of distrust means the public won’t believe them.

We have to remember that cultural context is a force at play here. Massive closed groups, through which false stories can spread, are much more prevalent in developing markets than in developed economies. And Ipsos research in 27 countries shows that the crisis of trust in traditional media sources is more overblown than we might think: it is a problem in established markets, true, but developing markets report an increase in trust in professional media outlets. Whatever your target audience, it’s important to find out where they get their news, and what credibility they put in individual publications – including your company communications.

"Our company must think and operate as if observers were always present, and perfection must be the goal: if consumers observed what we do, they would say that it is perfect. Nobody is perfect, but we strive for continuous improvement."
"At some point people will understand and say: okay, it’s not just in social networks, it’s how companies are using my data, and this will affect other sectors."

Final thoughts

Despite the different forms that technological backlash can take, Council members advise four key ways to keep on top of the story.

The fundamentals of communications haven’t changed. Be clear and transparent, and communicate openly and honestly. Much of the tech-related suspicion facing corporates at the moment stems from a lack of understanding among the public – something that doesn’t just affect technology companies, but all companies which use personal data.

Get ahead of the story. Council members perceive that many tech companies are playing catch up, reacting to stories as they explode, rather than defusing them before they begin. For all companies, regular horizon scanning can help you keep track of issues as they start to emerge. Many of our research programmes among senior publics take this long-term approach, helping our clients understand where they might be in five years’ time as well as what needs to be fixed right now.

Be more joined up. Members observe that changes and uncertainty in the policy or public environment don’t affect any company in isolation. Over the years that we’ve been conducting reputation research for some of the biggest companies in the world, we’ve seen that, rightly or wrongly, sector reputations often rise and fall as one. Even audiences that you hope know better, like senior legislators, often get confused about whether a story they heard involved company A or company B. It’s important to know what issues ‘belong’ to a sector and what ‘belong’ to individual companies from the external perspective. There are areas in all sectors where a united approach can make a bigger difference than individual efforts, even for some of the largest companies in the world.

This is part of growing up. Many Council members are sanguine about the challenges that the tech sector is facing at the moment because they’ve been through it themselves. They view it as a sign of a maturing sector. Perceptions of the tech sector will settle, but it is important for businesses to communicate their viewpoint so that this settlement doesn’t happen without their involvement and isn’t to their detriment.

Methodology: 154 interviews conducted with Reputation Council members between 25th June and 12th November 2018.

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Amid the uncertainty of the pandemic, the S of ESG is coming under greater scrutiny

Actions on E, S and G in tandem remain essential to corporate reputation

As ESG has surged up the consumer agenda, new Ipsos data shows that improving society is identified as the top priority for multinationals among consumers across the globe – perhaps not surprising given the social implications of the pandemic. While fundamental issues such as safe working conditions are seen as most important here, each company should carefully consider how to adapt its operations to improve sustainable business practice. Companies should continue to pursue actions on all three pillars of ESG though. Not just because E and G remain critical in the public’s eyes, but also as it – as we should all know now – makes good business sense to do so.

Companies’ role in creating shared value

Companies are increasingly assessed on the extent to which they bring ‘net benefits’ to society. Especially among the financial community and the media there is a focus on ESG: companies’ performance on Environmental, Social and Governance (ESG) issues that come with doing business. Not just because you ultimately shoot yourself in the foot if you run out of the natural resources you need, treat your staff unfairly, or become wound up in corruption scandals. No, also because doing the right thing has BECOME a source of value creation. Not least, this is because we – ‘the public’, consumers and employees – pay more attention to what companies do or stand for than we did a decade ago – be that their efforts to increase staff diversity & inclusion, meeting net zero goals, or paying their fair share of taxes.

In March 2021 Ipsos asked consumers across 28 markets to rank ESG priorities for multinationals. While all three aspects, ‘E’, ‘S’ and ‘G’, were seen as important, improving society (S) came out as the top priority, with 41% of the votes globally. Protecting the environment (E) followed at 31%, almost on equal footing with practicing good governance (G, 28%).

In 22 out of the 28 countries surveyed, improving society received the most picks as the top priority, with a majority of the vote share in Spain (54%), Poland (52%), Japan (52%) and Korea (50%).

These findings are not surprising in the context of COVID-19. Health & safety precautions in the workplace, as well as a desire for job security amid economic uncertainty, have, for many, become necessary concerns.

How should companies engage with the ‘S’?

Given the increased focus on the role of companies to contribute socially, where should they focus their efforts on the ‘S’ pillar of ESG?

Looking at which societal issues people want multinationals to address, our survey shows that improving working conditions and worker health & safety come top. This is true across all regions, from Europe to APAC, to Middle East-Africa, to LATAM through to North America. Potentially contributing here are new COVID-related concerns about ventilation, social distancing, face masks at work etc., on top of existing issues.   

Despite ample attention across (social) media for issues around gender equality and diversity, these topics came out lower down the list. Again, this holds true when looking in detail at the answers from people across different parts of the world. 

It’s impossible to give a blank slate answer to how companies can best create shared value on ‘S’. The priorities in the eyes of consumers listed above, give an idea. But what that means for each individual business is something that needs careful consideration. That’s why it’s so important for companies to engage with their stakeholders on these issues. Employees who feel their employer looks after them, will be more willing to go the extra mile: a ‘give’ for the ‘get’. Local communities who see that companies take their interests at heart, will be more open to dialogue and working together to create mutual benefits. Etcetera.

Ipsos advises businesses on how they should address ESG challenges and helps them to define, manage and communicate their priorities. A relevant example to multinationals is our advice on how to frame “benefits” of ESG strategies to consumers. As people aren’t driven by sustainability claims alone to take action (as they often feel they are doing enough already), it is most effective to couple these to an extra incentive personal to them. So instead of saying: “switch to renewable energy to reduce your carbon footprint” position this as “switch to renewable energy will save you money AND help you reduce your footprint”.

Finally, what’s left to say is that, as I have said before, investments in ESG issues should be financially responsible and prudent in their own right, giving shareholders a return on investment. Ultimately, genuine progress on ESG will help to protect companies’ social licence to operate and bolster their reputation.

For more information please contact:

Marloes Klop
Research Director, Corporate Reputation

Marloes.Klop@ipsos.com

Technical details about the survey

These are the results of a 28-market online survey conducted by Ipsos on its Global Advisor platform. Ipsos interviewed a total of 14,000 adults aged 18-74 in the United States, Canada, Malaysia, South Africa and Turkey, and 16-74 in 23 other markets. The survey was fielded between 19 February and 5 March 2021.

The sample consists of approximately 500 individuals in each of Argentina, Australia, Belgium, Brazil, Canada, China (mainland), Chile, Colombia, France, Germany, Great Britain, Hungary, India, Italy, Japan, Malaysia, Mexico, the Netherlands, Poland, Peru, Russia, Saudi Arabia, South Africa, South Korea, Spain, Sweden, Turkey, and the US.

The samples in Argentina, Australia, Belgium, Canada, France, Germany, Great Britain, Hungary, Italy, Japan, the Netherlands, Poland, South Korea, Spain, Sweden and the US can be taken as representative of their general adult population under the age of 75.

The samples in Brazil, Chile, mainland China, Colombia, India, Malaysia, Mexico, Peru, Russia, Saudi Arabia, South Africa, and Turkey are more urban, more educated, and/or more affluent than the general population. The survey results for these markets should be viewed as reflecting the views of the more “connected” segment of their population.

The data is weighted so that each country’s sample composition best reflects the demographic profile of the adult population according to the most recent census data.

Where results do not sum to 100 or the ‘difference’ appears to be +/-1 more/less than the actual, this may be due to rounding, multiple responses, or the exclusion of “don’t know” or not stated responses.

The precision of Ipsos online polls are calculated using a credibility interval with a poll of 500 accurate to +/- 4.8 percentage points. For more information on the Ipsos use of credibility intervals, please visit the Ipsos website.

The tech sector always bets that product quality will override privacy concerns

Probably the most common criticism levelled at the tech sector is the one about privacy – the sense that the tech sector, or government enabled by the tech sector, are collecting far more data on individuals than they should, and that the data is then being sold or used for unclear purposes. While the tech sector sticks closely to its cherished, and well-proven, ideology that positive user experience nearly always mitigates these concerns in practice, it is also true that the concerns of pro-privacy groups within society, and government, are getting louder and more prominent.

Stark evidence of this can be seen across two, relatively recent, product launches. Both of which have attracted major criticisms from privacy and digital rights campaigners, while at the same time being major commercial success stories.

Concerns around business and government use of personal information is high on a global scale

Let’s look at those concerns first – the 2020 Ipsos Global Trends survey[1] shows in stark detail the level of concern that exists around the world about what is being done by companies and governments using the personal data being collected from people when they go online.

A rise in private sector surveillance

So, bearing such concerns in mind, let’s examine the news coverage of Amazon’s Ring product line over the last few weeks. Ring is a video doorbell system, which seems innocuous, but with millions sold what you end up with is a potential surveillance network the size of which has never been seen before, and all in the hands of Amazon. And what has Amazon done with it? For one it initially entered into partnership with a large number of law enforcement agencies in the US that allowed them access to the videos it records without a warrant being required[2]. To quote from the Guardian, because of Ring “law enforcement are given a backdoor entry into private video recordings of people in residential and public space that would otherwise be protected under the fourth amendment”. While Amazon has recently extended its moratorium on sharing its facial recognition software with police, a ban it says that will stay in place until Congress creates the appropriate safeguards, it is puzzling why a similar approach to sharing data with law enforcement has not been adopted with Ring. Especially given the high-profile critique of the product by former Amazon software engineer Max Eliaser;

“The deployment of connected home security cameras that allow footage to be queried centrally are simply not compatible with a free society. The privacy issues are not fixable with regulation and there is no balance that can be struck. Ring should be shut down immediately and not brought back[3]

Now Amazon can certainly say that they are following the law as it exists and that the capabilities and requirements of the Ring product are all made available to the consumer at the point of sale. Amazon has acknowledged some of this controversy and has consequentially changed how police ask for video content, now requiring the police to ask for footage via the Ring Neighbors app, allowing local users to comment or assist as they judge best[4]. However, to a background of high consumer concern about how personal data is being used and with Ring cameras being described as “a threat to privacy at best and a danger to society and democracy at worst[5]”, critics may accuse Amazon of not thinking product features through a bit more carefully. That said, when they have a product that has shifted many millions of units in the US alone it is clear that, as ever, product utility quashes privacy concerns at point of purchase. A fact underlined by the 4.6 rating the Ring 3 has on Amazon.com, a rating based on 33,000+ reviews.

From surveillance to tracking

Enough with Amazon, I hear the tech fans cry, that’s just one of the major brands. Well, let's turn to Apple and its brand-new gadget - the AirTag. A device sold as the means to find things you have lost, via a Bluetooth signal that alerts sympathetic devices that are web-enabled. Perfect for finding your luggage, your car, or, as has been pointed out by a wide range of news agencies, the person you are stalking.

Apple has attempted to build in safeguards to prevent “unwanted tracking” but the slew of media coverage over the last few weeks that point out how ineffective those safeguards are in practice probably shows how little thought the designers of this product put into thinking about the downsides of this product compared to the potential upsides. The warning sound that alerts the user to unwanted tracking is easily missed, and while people with an iPhone might be able to find unwanted AirTags those with Android phones cannot (right now).

While plenty of apps, charmingly called “stalkerware”, exist to help one person track another, and there are other products similar to AirTags where the manufacturers have put far less effort into stopping them from being used for nefarious purposes than Apple has. However, part of the surprise here is that, as The Washington Post articulates well “AirTags show how even Apple, a company known for emphasizing security and privacy, can struggle to understand all the risks involved in creating tech that puts everyday things online[6]. This disconnect between a company that is often praised for its firm stance on personal privacy and the potential misuse of this product is vast and easily fixed with little effort. As Wired suggests “Apple leadership needs to give abuse survivors and experts a central place in its development process, incorporating their feedback from the start. Otherwise, the company will continue to make products that endanger people more than they help[7]”.

Responding to this wave of criticism[8] Apple has announced some changes – reducing the amount of time before an AirTag starts beeping once it is away from its owner's iPhone and promising an Android application as well. Just like Amazon with Ring its good to see Apple responding to the issue, but it again raises the question of how a product like this got to market with these issues when Apple usually takes these issues so seriously. That said, just as with Amazon’s Ring it is highly likely that this product will sell incredibly well despite any privacy concerns due to its sheer usefulness. In fact one industry analyst in Forbes[9] confidently predicts its success, and possible billion dollar revenue for Apple, due to the vast number of devices the product can connect to and the popularity of the Find My app among Apple product users.

Consumers value privacy – as well as products that make their lives easier

Ultimately the tech sector knows its customers very, very well and knows that while there are people who may not buy these products because of privacy issues there are far more people who will ignore those concerns and buy them anyway. Negative media coverage of the like described above will have very little impact on the level of individual customers. That said, increased media focus on perceived privacy issues reinforces some of the negative reputational themes that affect the tech sector and the brands within it and are currently fuelling many of the debates that are ongoing around the world among legislators thinking of new regulation. Innovative new products that skirt the edge of what is appropriate, or legal, when it comes to privacy is one thing, as long as they are profitable, but fuelling the fires of regulation is another. The tech sector may want to ponder this.

Article links

[1] Markets: Argentina, Albania, Australia, Belgium, Brazil, Canada, China, Chile, Colombia, Denmark, France, Germany, Great Britain, India, Indonesia, Italy, Japan, Mexico, Peru, Poland, Russia, Romania, Serbia, Saudi Arabia, South Africa, South Korea, Spain, Sweden, Turkey, and the United States. 

Method The survey for the 2020 edition was carried out online using the Ipsos Online Panel, and face to-face interviewing in Albania, Montenegro and Serbia. The results are weighted to ensure that the sample’s composition reflects that of the adult population according to the most recent country census data. Total global data has not been weighted by population size, but are simply a country average.

Fieldwork dates June-July 2019

[2] https://www.theguardian.com/commentisfree/2021/may/18/amazon-ring-largest-civilian-surveillance-network-us

[3] https://amazonemployees4climatejustice.medium.com/amazon-employees-share-our-views-on-company-business-f5abcdea849

[4] https://www.cnet.com/home/security/rings-police-problem-didnt-go-away-it-just-got-more-transparent/

[5] https://thenextweb.com/news/amazon-engineer-ring-should-be-shut-down-immediately-and-not-brought-back

[6] https://www.washingtonpost.com/technology/2021/05/05/apple-airtags-stalking/

[7] https://www.wired.com/story/opinion-apples-air-tags-are-a-gift-to-stalkers/

[8] https://www.bbc.co.uk/news/technology-57351554

[9] https://www.forbes.com/sites/timbajarin/2021/04/20/airtags-are-apples-next-billion-dollar-business/?sh=4f60c605d187

For more information please contact:

Carl Phillips
Director & Global Stakeholder Research Lead, Corporate Reputation

Carl.Phillips@ipsos.com