Online Spoof Illustrations in the Aftermath of a Reputational Brand Crisis Defining the Phenomenon and Its Consequences for Brand Management – MASTER THESIS – International Marketing and Brand Management Eric Eichinger & Jens Gudacker 24 May 2016 Supervisor: Mats Urde Examiner: Frans Melin ABSTRACT Purpose: The purpose of this thesis is to explore the phenomenon of online spoof illustrations that are created in the aftermath of a reputational brand crisis. In a first step, characteristics of these illustrations are assessed and categorized. Subsequently, their impact on a brand’s reputation is investigated. Methodology: An exploratory sequential mixed method approach was applied, with initial qualitative research facilitating a subsequent quantitative phase. Over 500 spoof illustrations of three cases (Barclays LIBOR crisis, Volkswagen “Dieselgate”, and BP Deepwater Horizon oil spill) were collected online. A structuralist semiotic reduction analysis was conducted to assess the context as well as denotative and connotative features of these images. These insights were further combined with grounded theory to arrive at a framework that allows a categorization of the illustrations. Finally, an online self-completion questionnaire with 501 respondents was used in the quantitative stage of the thesis to assess the harmfulness of spoof illustrations to a brand’s reputation. Findings: Spoofs can be found in several illustrations types, be it cartoons and caricatures, subvertisements, photographs, or image macros. They include recurring content elements, such as a brand’s logo, name, slogan and product, different stakeholders and political actors, as well as pop cultural and situational artifacts. The Reputational Spoof Illustration Framework (RSIF), which is introduced here for the first time, allows a classification of spoof illustrations, according to the dimensions Humorousness and Aggressiveness. These dimensions form four categories: Resenting, Insulting, Mocking, and Gloating. The quantitative data suggests that spoof illustrations have a negative impact on a brand’s reputation. It can also be inferred that the less humorous and more aggressive a spoof is, the more harmful it is to a brand’s reputation. Theoretical Contributions: The thesis contributes mainly to the fields of (online) crisis- and reputation management, strategic brand management, and stakeholder relations. It gives an extensive definition of spoof illustrations that help to further understand the tools stakeholders use to criticize a brand. Furthermore, the RSIF can arguably be applied to a vast range of different scenarios of brand criticism and parody. Finally, substantial gaps in literature were filled in the fields of online criticism, brand parody, and brand reputation. Managerial Implications: Spoofs can be harmful to a brand’s reputation, and thus need to be closely monitored during a crisis. The study was conducted in close relation to real- life examples and therefore delivers immediate implications for practitioners, especially by applying the RSIF in corporate crisis situations. After spoofs have been collected, they can be instantly mapped and evaluated with the help of the framework. Consequently, three action alternatives are presented, namely Ignore, Reduce Impact, and Counteract. Originality/Value: Spoof illustrations that are created following a brand crisis have only been researched in a cursory manner. This is the first comprehensive analysis of this phenomenon. It provides an extensive descriptive as well as interpretative assessment of the spoofs, and also demonstrates their implications for a brand and its reputation. Furthermore, the Reputational Spoof Illustration Framework that was developed in the course of this study, allows academics and practitioners alike a quick and simple assessment of any spoof illustrations. Keywords: Spoof Illustrations, Brand Parody, Crisis Management, Stakeholder Online Reactions, Corporate Reputation, Strategic Brand Management i Acknowledgements We would like to express our deepest appreciation and gratitude to our supervisor Professor Mats Urde, for his continuous guidance and strong support throughout the entire research process. We especially want to thank him for the chance to present and discuss our findings to the Lund Brand Management Group. Bridging theory and practice by discussing the phenomenon with more than 100 brand managers was a unique opportunity and enriched both our personal and professional experience. We would also like to extend our gratitude to Antonio Marañon, who assisted us with the methodological and statistical approach for our study. His insights and advice were of high value for us. We are also grateful for all 501 survey respondents, who took the time to provide us with important data for our analysis. Last, but not least, we would like to thank our family and friends, both here and at home, for their unwavering support during this entire year in Lund. None of this could have happened without you. Thank You, Eric Eichinger Jens Gudacker ii Table of Contents 1 INTRODUCTION 1 2 LITERATURE REVIEW 5 2.1 Corporate Brand Reputation 5 Brand Identity, Image and Reputation 7 Creation of Reputation 8 2.2 Crisis Management 9 Phases of a Brand Crisis 10 Reputation Management in a Crisis 11 2.3 Stakeholders in a Crisis 11 Roles of Stakeholders 12 Stakeholder Emotions 13 Stakeholder Reactions 14 2.4 Brand Crisis in the Online Sphere 16 The Internet as a Facilitator in a Brand Crisis 16 Online Brand Destruction in Times of a Reputational Crisis 17 2.5 Online Tools for Brand Criticism and Parody 19 Brand-Critical Movements 19 Visual Brand Criticism 22 Brand Parody and Its Influence on Stakeholder Attitudes 24 3 CASE SECTION 28 3.1 Screening and Cross-Sectional Design 28 3.2 Case Selection 29 3.3 Case Descriptions 30 BP Deepwater Horizon Oil Spill (2010) 30 Barclays LIBOR Scandal (2012) 31 Volkswagen “Dieselgate” (2015) 31 4 METHODOLOGY 33 4.1 Research Philosophy 33 4.2 Research Strategy 34 4.3 Research Design: A Multi-Phase Study 36 Phase 1: Collection of Spoof Illustrations 37 Phase 2: Structuralist Semiotic Reduction Analysis 38 Phase 3: Framework Development 40 Phase 4: Quantification of Framework and Impact on Reputation 42 iii 5 ANALYSIS 47 5.1 Semiotic Analysis 47 Context of Spoof Illustrations 47 Types of Spoof Illustrations 50 Content Elements of Spoof Illustrations 56 5.2 Reputational Spoof Illustration Framework (RSIF) 60 Dimensions 61 Categories 64 Resulting Hypotheses 65 5.3 Survey Analysis 67 Descriptive Statistics 67 Analytical Statistics 72 6 DISCUSSION 76 7 CONCLUSION 82 7.1 Theoretical Contributions 85 7.2 Managerial Implications 86 7.3 Limitations and Future Research 89 8 REFERENCES 91 9 APPENDIX 104 iv List of Figures Figure 1 Examples of Spoof Illustrations .................................................................... 1 Figure 2 Reputation Management Model (Gray & Balmer, 1998) .............................. 7 Figure 3 Creation Process of Brand Reputation (Fill, 2009) ....................................... 7 Figure 4 Stakeholder Reaction Model (Fediuk, Coombs & Botero, 2010) ................ 16 Figure 5 Summary of Literature Review ................................................................... 27 Figure 6 Distribution of Online Spoof Illustration Sources ........................................ 48 Figure 7 Temporal Distribution of Detected Spoof Illustrations ................................ 50 Figure 8 Spoof Examples of Subvertisements ......................................................... 51 Figure 9 Spoof Examples of Cartoons ...................................................................... 52 Figure 10 Spoof Examples of Caricatures ................................................................ 53 Figure 11 Spoof Examples of Photographs .............................................................. 54 Figure 12 Spoof Examples of Image Macros ........................................................... 55 Figure 13 Logo Spoof ............................................................................................... 56 Figure 14 Slogan Spoof ............................................................................................ 56 Figure 15 Name Spoof ............................................................................................. 57 Figure 16 Spoof of Products ..................................................................................... 57 Figure 17 Spoof of Executives .................................................................................. 57 Figure 18 Spoof of Political Actors ........................................................................... 57 Figure 19 Spoof of Victims ....................................................................................... 58 Figure 20 Pop Culture in Spoofs .............................................................................. 58 Figure 21 Situational Artifacts in Spoofs ................................................................... 59 Figure 22 Word Cloud of Attribute Collection Analysis ............................................. 61 Figure 23 The Reputational Spoof Illustration Framework (RSIF) ............................ 62 Figure 24 Brand Reputation Before and After Spoofs .............................................. 68 Figure 25 Spoof Examples for Framework Dimension Humorousness .................... 69 Figure 26 Spoof Examples for Framework Dimension Aggressiveness ................... 70 Figure 27 Examples of Slightly, Moderately and Very Harmful Spoofs .................... 71 Figure 28 RSIF-Mapping of Survey Spoof Illustrations ............................................ 71 Figure 29 Concluding Overview of Reputational Spoof Illustration Framework ....... 84 Figure 30 Operational Guidelines for Approaching Spoof Illustrations ..................... 86 v List of Tables Table 1 Overview of Brand Critical Movements ........................................................ 21 Table 2 Central Findings of Literature on Brand Criticism and Parody ..................... 26 Table 3 Overview of Methodological Multi-Phase Approach .................................... 36 Table 4 Overview of Data Collection Process ........................................................... 38 Table 5 Overview of Types and Content Elements of Spoof Illustrations ................. 59 Table 6 Reputation Impact Analysis (Dependent t-Test Results) ............................. 73 Table 7 Spearman’s Correlation Analysis Among Illustration Variables ................... 74 Table 9 Overview of Type and Content Elements of Spoof Illustrations ................... 83 vi Online Spoof Illustrations in the Aftermath of a Reputational Brand Crisis 1 INTRODUCTION They are all around us. Whenever a well-known company is involved in a scandal or crisis, the Internet is full of images that criticize, ridicule, or assault the brand for its missteps. The most recent large-scale crisis, the Volkswagen “Dieselgate”, is a good example of this. Consumers and other stakeholders feel betrayed and lied to, thus taking to social media to give vent to their anger – often in the form of pictures instead of words. But research has largely ignored these visuals. Are they simply taken for granted? Are they just “irrelevant little doodles”? This can be doubted, as we are facing a new reality, where the rapidly growing Web 2.0 gives everyone a voice, and any single picture can be seen by millions. What used to be graffiti on the wall or a mocking cartoon in the local newspaper, is today a world-wide piece of communication with the potential to stain a brand, especially in the context of a reputational crisis. Additionally, it can even be argued that in contrast to simple texts, an image attracts more attention, conveys a clear message, and is easily shared – “a picture is worth a thousand words”. Would all of this not mean that these illustrations have a high potential to affect a brand? This observation is the raison-d’être for this thesis, which puts the phenomenon of spoof illustrations at the core of its investigation (see Figure 1 for examples). The following definition of spoof illustrations (and their synonyms “spoof visuals”, “spoof pictures”, “spoof images”, or simply “spoofs”) is proposed: Spoof illustrations address or criticize brands by using brand elements or parodies of them. Figure 1 Examples of Spoof Illustrations1 1 Sources for all spoof illustrations used in this thesis can be found on pp. 101-103 1 Online Spoof Illustrations in the Aftermath of a Reputational Brand Crisis In this thesis, only spoof illustrations that can be found online and are used in the context of a reputational brand crisis will be considered. One thing should be highlighted, however. The words parody and spoof, which are used synonymously in this thesis, are often limited to standing for something humorous, such as Sabri & Michel (2014, p. 43), who define parody as “a form of creative art that mimics a particular work […] through the use of ironic, humorous, or satiric imitation”. While humor certainly plays a considerable role in spoof illustrations, it would not be accurate to exclude those pictures that are more serious. After all, a crisis is not necessarily a laughing matter. For this reason, the terms spoof and parody will only be used to stand for “imitating something (i.e. a brand) by altering or exaggerating its characteristics”, without the imperative presumption of humor. Unsurprisingly, parodies and spoofs have a long tradition. The phenomenon dates back to Greek philosopher Aristotle, who first used the word “parodia” in his work Poetics to discuss satirical poems (Dentith, 2000). During the course of time up until today, those that are in the public eye – be it kings, actors, or politicians – have always been the subject of ridicule, parody, and criticism. With increasing globalization and capitalism, brands have been added to this list. They and their advertisements have been spoofed ever since brands were featured in print, radio, and television (Berthon & Pitt, 2012). However, as mentioned before, the Internet has revolutionized the scope and intensity of brand parodies. It has empowered consumers and other individuals by giving them a voice, shifting brand building from being a one-way monologue to an interactive dialogue (Bal et al., 2010). It has supplied user with tools that allow them to create and share their own perspective towards a brand, which is called co-creation. Official brand campaigns thus have to battle with user-generated content for the public’s attention (Fielding, 2006). But what does it mean for a brand when this content is critical, and maybe downright insulting – especially, when it is already damaged by a crisis? There have been plenty of studies on both content that is critical of brands, and stakeholder reactions in a crisis. A general example of this is negative Word-of-Mouth (Brummette & Fussell Sisco, 2015; Pace, Balboni & Gistri, 2015), which could result in a “firestorm” when done by a large group of people online (Pfeffer, Zorbach & Carley, 2014). On a more concrete level, there has been research on such concepts 2 Online Spoof Illustrations in the Aftermath of a Reputational Brand Crisis as anti-branding, which can be seen as a rather ideological and anti-capitalistic form of criticism (Hollenbeck & Zinkhan, 2006; Yazıcıoğlu & Borak, 2012) or “brandalism” (brand vandalism) and “subvertising” (subvert advertising), which adapt existing advertisements and similar branded content to make a statement and rebel against the brands (Smith-Anthony & Groom, 2015). All of these items are absolutely legitimate in their contribution to the research of brand criticism in general, and stakeholder relations in a crisis. However, they indicate some substantial gaps that this thesis will attempt to fill. First of all, crisis reactions and emotions (such as negative word-of-mouth) are often only investigated in an abstract way. They lack practical examples, such as spoof illustrations, which constitute a significant part of these reactions. This is also where the second big research gap can be identified. While there has been some research on brand parodies (e.g. the aforementioned brandalism and subvertisement initiatives), they have almost always been conducted generally, and not in the context of a crisis. It should be expected, however, that spoof illustrations do not only occur much more frequently when a brand is in crisis, but that they are also perceived to be more relevant and valid to the situation. Consequently, no one has yet investigated what effect such spoof illustrations can have on the stakeholders in a crisis, and how they harm the brand and its reputation. Seeing that we are constantly surrounded by a large variety of spoofs on social media, blogs, and other online sources, it is astonishing that it is still unknown what implications they have on the brand. A clear purpose for this thesis emerges from the preceding arguments. First of all, it needs to be investigated what characterizes spoof illustrations that are created following a crisis. To do this, the particularities of such visual forms of communication need to be considered just as much as the illustration types the come in, the content they include, and the context they refer to. Furthermore, it will not be sufficient to simply describe the spoofs. For this reason, the thesis will also set out to develop a form of categorization that allows to differentiate between types of spoofs. After all, while other brand parody activities are usually researched within a narrow field, it is suggested that spoof illustrations can come in a variety of forms and were created with different intentions. Therefore, the first research question is as follows: 3