Kevin Elliott, U.S. director, risk & crisis communications practice at Hill+Knowlton Strategies, has a favorite aphorism about crisis management: “If you treat a bad day like a crisis, you’ll turn it into one. And if you treat a crisis like a bad day, you’ll make it worse.”
So should Mark Zuckerberg and company treat comedian Jim Carrey’s Feb. 6 announcement as a crisis or a bad day?
On his Twitter feed (17.5 million followers) and Facebook page (5.1 million followers), Carrey announced he’s dumping his Facebook stock and pulling his Facebook page because the social media behemoth profited from selling bogus ads to Russian agents during the 2016 U.S. presidential election. In addition, he wrote, “they’re still not doing enough to stop it.” The Canadian-born entertainer, who became a U.S. citizen in 2004, also wrote, “I encourage all other investors…to do the same.”
Carrey failed to say how much Facebook stock he owns.
In a statement to Fortune from a Carrey spokesperson, the actor said: “For a long time America enjoyed a geographical advantage in the world with oceans on both sides to protect it. Now, social media has created cyber-bridges over which those who do not have our best interest in mind can cross and we are allowing it…We must encourage more oversight by the owners of these social media platforms. This easy access has to be more responsibly handled. What we need…are activist investors to send a message that responsible oversight is needed…[and] capitalism with a conscience.”
Slip of the Tongue
A PR lesson: It’s unwise for CEOs to make statements in public that can’t be backed up with facts.
You may recall when Zuckerberg was told Russian agents used Facebook to interfere with the U.S. election, just days after it, his reaction was way outside Elliott’s aphorism. To Zuckerberg the possibility of Kremlin interference via Facebook didn’t even rise to the level of a bad day—it was utter nonsense. “I think the idea that fake news on Facebook…influenced the election in any way is a pretty crazy idea,” Zuckerberg told an audience during Techonomy, a conference in California.
As you know, Zuckerberg has had to walk back on that one big time. The company is deep in congressional investigations of Russia’s interference in the presidential election of 2016. Special counselor Robert Mueller also is in the picture. The special counsel heading the investigation of Russian interference in the elections has been in contact with Facebook about several issues.
So, back to our initial question: Should Carrey’s #unfriendFacebook effort be seen at Facebook as a crisis or a bad day?
Can Wall Street Abide Fake News?
Evidence for just a bad day mounts when you look at Facebook’s recent financials. In short, they were terrific. And not one-hit-wonder Gnarls Barkley terrific. For several quarters Facebook’s financials have consistently bested predictions. This time, Jan. 31, 2018, it reported a surge in revenue due to strong advertising growth, the anchor of its business.
One method of taking a gut check on crisis vs. bad day is to take a look at the stock market. Facebook’s stock, which admittedly had been sluggish due to the kinds of issues Carrey is speaking out about, hit a record high Feb. 1. The lesson here seems to be that Wall Street and, by extension, advertisers, consider Carrey’s protest just a bad day. It seems business is willing to live with fake news as long as profits are hefty. Since advertisers are unlikely to abandon Facebook on Carrey's say-so should end the debate about bad day or crisis right there.
Maybe.
What about Zuckerberg’s January statement about toning down marketing copy on Facebook’s news feed in favor of building a community of people, not brands, on the platform? That has to be hell for advertisers and presumably revenue, right? And users are logging less time on Facebook, aren’t they? True, but Wall Street seems to have bought Zuckerberg’s assurance that it’s quality over quantity in terms of time spent on Facebook. Again, just remind yourself of that record stock price of Feb. 1.
Pats in Trouble?
Admittedly, Facebook shares have dropped since then, but a crisis? Nah. Are the New England Patriots in a crisis because they lost Sunday’s Super Bowl? Is the NFL in a crisis because its regular-season TV ratings are down and it’s losing part of its core audience? Like Facebook, the NFL and the Patriots are at the top of the heap. When you’re in the dominant position and have been for years you’re going to slide a bit here, a bit there, but a crisis?
Of course, we can still hear naysayers muttering, “It’s a crisis.” Look at what’s happening with one of Facebook’s enemies, Snapchat, these people are saying. True, things are looking up for Snap Inc., which, so far, is untainted by the messy fake news issues occupying executives at Facebook and at other social platforms.
The public company is dancing delicately in an effort to become a profit-making business and remain the laid-back (read non-corporate) experience its users desire. The thinking of most was Snapchat would be unable to satisfy Wall Street and the platform’s mostly teen users.
Like Facebook, Snap also released Q4 financials Jan. 31, and its microscopically priced shares surged 20% on news that, yes, at least for one quarter you can be corporate and informal. Due to an automated ad-buying system at Snap, revenue jumped 72% year over year. Daily users also rose significantly. But is any of this a crisis for Facebook?
Remember, Snap is down looking up, way up, at Facebook. Q4 was by far the best showing Snap has had in its one year on the market and it still lost $350 million.
More than that, perspective is important. Snap will generate some $1.50 billion in net worldwide ad revenue, up 90% from 2017, says EMarketer in the NY Times. Still that’s just 1% of the global digital ad market. Facebook’s ad take in 2017 was nearly $40 billion.
Crisis or a bad day?
Seth Arenstein is editor of PR News. Follow him: @skarenstein