Conference SEO - the practice of doing SEO for a site devoted to running a yearly conference. Applies to other regular events too I suppose, not just conferences. Turns out even the masters of SEO can’t get this one right - see how a search for either SES london or SMX advanced returns the page about last years event? If I was slightly dumber I might have turned up on the wrong dates:

Google search for SES London

Google search for SMX Advanced

I think it’s a pretty bad example to be showing off and gives the sites a bit of bad rep in my eyes. After all, you wouldn’t attend a web-design conference where the website looked like this would you?! (warning - train sounds may start playing uncontrollably if you visit that site).

How To Do SEO For Conference Sites

Now, designing a site architecture for a conference site (or site with a regular event) isn’t straightforward but equally it’s not rocket science. The best way of doing it is not to create new pages for each event but instead to have one standard page, the content of which changes each year. Like this:

SMX Advanced

SES London

Then to shift the old content onto a new URL once the conference has finished like this:

SMX Advanced 07

SES London 07

This means that your root page about the event gets all the links each year, the page becomes old and established and you simply refresh the content plenty of time before the event. This should ensure that the correct page ranks. This is the approach taken by both SMX and SES however and it’s still not working. Why is that?

The reason it’s not working in this case is that in fact the 07 pages have strong internal linking throughout both the SMX and SES sites. They also have a fair number of external links which makes me think that the 07 pages were created very shortly after the event (and hence everyone who blogged about it afterwards linked to the 07 page). I would recommend not creating the 07 page and moving the content until a few weeks after the event so that everyone who wants to talk about their experience still links to the root event page. This way the 07 pages should never gain enough weight to out-rank the main event page.

If all of this doesn’t work then there’s still plenty you can do such as hiding the pages behind robots.txt, editing the title tag of the 07 pages to make them less well optimised, using nofollow on internal links or even contacting people who link to the 07 page and asking them to link to the root page as well/instead! A last ditch effort would be to 301 the 07 pages onto the root page and move the 07 content onto a ‘past events’ page. All of these approaches though decrease the user experience so I would recommend looking at the internal linking as a priority and seeing how far that gets you.

I think the key takeaway from this post is to not forget about your brand searches. Even though you might own the top spots for a particular search always pay attention to which pages are taking those top spots and if they’re not directly relevant then do something about it!

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Just a quick funny for a Tuesday morning. It made me giggle:

Search for ‘googol’ (the number that is 10^100) on Yahoo! and it asks if you meant ‘Google’ (that little search company). Google doesn’t do this…

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Peter Meyers is an expert in website usability and is better known to many around the worlds of usability and SEO as ‘Dr. Pete’ (not without cause - see below). He is the head honcho of User Effect and he has kindly agreed to be our first victi… interviewee of 2008 (and the first real post of the new-look blog). I was really excited about interviewing Pete. His input to SEOmoz (which is how we have got to know one another) is incredibly valuable and he is one of the most liked and respected members of that community.

Coming from a serious academic background and with a focus on usability, the doctor has a different perspective to many mainstream SEOs and it is this that really sets him apart and around which he is building a great brand.

Although we play feuding competitors on TV, I have great respect for Pete’s opinions, so on that note, we jump straight into the questions:

Some people might be aware that we have an ongoing battle for points at SEOmoz (this whole interview is a ploy to appear friendly before launching vicious rumours designed to get you more thumbs-down). Your personal brand over on SEOmoz is very strong - has it brought you work?

[Dr. Pete]: It’s good to take a break from the feuding once in a while. Last year was a good one for me when it came to personal branding, and SEOmoz was a pretty big part of that. I’ve definitely seen some interest and leads come out of that, and have used it to better define my niche and business direction. One of my new year’s resolutions for 2008 is to work on turning that brand into client work.

Before starting User Effect, you helped create an Internet startup. Can you tell us a bit more about that experience, and what led you back to “strategic usability”

[Dr. Pete]: I was the first full-time employee for an ISP back before the dot-com bubble burst (1997). The internet had really hit the mainstream while I was in graduate school, so I decided to give a start-up a shot. I’ve been a coder since I was a kid and my boss was a coder, so we quickly realized that our talents were a good fit for developing database-driven websites and applications, and we made the shift to being an ASP. My boss consulted 3 days/week, leaving me with the clients, and I found I was pretty good with clients. To make a long story short (not one of my talents, I know), I saw some opportunity with a couple of those clients and sold them on long-term contracts. Those clients asked for our help developing web-based tools for a couple of tradeshows, and we eventually developed a tradeshow management system.

In 2005, the company had grown to about 15 people and I was Executive VP, when I started realizing that 8 years was long enough and I really wasn’t interested in the tradeshow business long-term. So, I took some time off and realized that I really loved helping small businesses and wanted to get back to my “roots” in psychology. I had done usability work, informally, and realized it was the perfect fit. I take a broad view of usability, and, since I work with small companies, really focus on the entire process of converting motivated visitors into buyers. I’ve taken to calling that “strategic usability”, which I’m sure I’m stealing from someone

The ‘Dr.’ in Dr. Pete refers to a PhD in cognitive psychology, doesn’t it? My academic background is in maths and statistics and I find it occasionally directly helpful but more often useful for the logical and theoretical thought processes. Is it similar for you? Do you find the training helpful for getting you to think in a particular way or do you actually use specific things from your academic work?

[Dr. Pete]: Guilty as charged. I think graduate school is mostly about teaching you how to think critically and learn on your own, and that’s been valuable in just about every aspect of my life. I was a computer science undergrad, and have found that while the specifics are long gone (no one’s coding in Pascal and Lisp these days), the theory is still going strong. As a cognitivist, a lot of my training had to do with how people perceive and process information, and that certainly comes in handy in my line of work.

I think too much of the web fails to think about usability. If you could give just one piece of advice to the average web designer, the average web developer or the average SEO, what would they be?

[Dr. Pete]: To put it bluntly: Don’t get cocky. Whether you’re a designer, coder, or SEO, we all sometimes start to think we know everything or that our personal opinions are somehow the last word. End users don’t care what we think, and they don’t care about the latest and greatest technology or design technique. They want what they want, and the first step towards better usability is to shut up and listen.

On the same vein, in the SEO industry, too many clients only consult us quite a long way down the process (when they should have thought about usability quite a lot sooner). If we can persuade clients to include some kind of usability stages into the design / build process, what should they care about most? If the budget is there, we could bring in a specialist like you: what can you do at different price points?

[Dr. Pete]: It’s funny you should mention that, as I’m working on putting together a couple of options for small companies, in the form of some simple but customized reports. I think the key for a small business is to (1) help them define their website’s business goals, and (2) give them concrete action items they can put to use immediately. Any business that makes money online can benefit from better usability and SEO, and it’s our job to educate and find ways to make those services cost effective. Part of my personal mission is to help people understand that usability doesn’t have to mean laser eye-tracking and $20K in laboratory testing.

For smaller businesses, or if budgets are really limited, what can they do on their own / with their existing web designer / developer?

[Dr. Pete]: The best thing they can do is step back from the design and technical side and think about how their business translates onto the web. You can’t convert visitors if you don’t know what your goals are. It’s amazing how many companies have no idea what they’re trying to achieve online.

Getting away from the boring seriousness, what do you do to relax? Tell us about something you are passionate about…

[Dr. Pete]: I hate to admit that I’m terribly undisciplined, so I’m fascinated by physical/mental disciplines, like the martial arts and yoga. I’ve practiced Chinese kung fu off and on and just started taking some Iyengar yoga. My wife and I are also trying to learn Chinese, which is a bit of a challenge. She also got me into skiing a few years back; she’s a lot better than I am, but I’m finally getting to the point where I’m not afraid for my life Other than that, I’m a pretty big geek; I spend too much time surfing the net and watching the TiVo.

At some point we’ll get to meet up and share a drink. What should we buy you?

[Dr. Pete]: The last time I was on your side of the pond, I had a hard cider called Scrumpy Jack’s, and I’ve been trying to find it ever since. I’m also partial to a well-crafted half-and-half; I know it’s probably blasphemy to some people, but I’ve always preferred Harp to Bass.

One final work-related question: we are doing a lot of work at the moment understanding localisation and geo-targeting etc. What would differ in your approach when multiple languages / countries are involved?

[Dr. Pete]: Multicultural usability is something we’re really just beginning to try to understand, IMO. On the one hand, I think the internet has standardized some of the ways we do things. If you take a major Chinese website and ignore the characters for a minute, it looks a lot like a major English website; it even reads left-to-right. On the other hand, the cultural underpinnings of what motivates people, what their expectations are, and why they do what they do, are very strong. It’s a fascinating area with huge potential for growth.

---

Thank you Dr. Pete, for your insightful and interesting answers! I hope our readers needing an expert in website usability beat a path to your door.

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I have just promoted the changes that should mean everything is looking shiny and new around here. We hope you like it!

If you notice anything a bit squiffy, please refresh your browser (just hit F5) to make sure you have the latest CSS and if you are still seeing problems, we’d love to hear about them straight away at support@distilled.co.uk - please let us know what browser you are using and which page is having problems (a screenshot’d be lovely too!).

Eagle-eyed readers will notice a bit of similarity with the reputation monitor look. That might not be an accident.

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At the end of last week, we heard the news that the initial bids in the FCC’s auction of 700MHz spectrum reached $2.4 billion. This auction is being run to reallocate spectrum previously used for analogue TV that has been freed up by the move to digital.

I don’t know very much about the technical details of spectrum, but I find it a fascinating commodity and allocation process (OK, I’m a geek). It’s a classic public good - it isn’t at all clear who should own it in the first place in order to sell it. There is a tragedy of the commons problem though if it isn’t allocated somehow - if everyone tries to use it, then no-one gets to (because of interference problems). This isn’t a problem for some low-power, short-range technologies (like bluetooth or ultra wideband (UWB) (not that UWB seems to be a problem anyway, given no-one is using it)), but you need allocation before you get technologies like mobile phones, TV, radio etc.

Historically, governments tended to allocate spectrum to public bodies (e.g. the BBC) or companies by beauty parade (read: cronyism). Back at the end of the 1900s, the economists, mathematicians and game theorists crashed the party and argued that allocation by auction would bring a number of nice benefits:

• Revenue for the Government / taxpayer
• Efficient allocation (i.e. the party prepared to pay the most should be the party who has the ‘best’ use of the spectrum in the sense of the one that people are most prepared to pay for)
• Fairness of allocation - no reliance on ‘contacts’ or cronyism - it becomes all about the business model. The markets sort it all out.

I am actually more qualified to write about this stuff than pretty much anything else you’ll see us blathering on about here on the Distilled blog since auction theory research formed part of my graduate studies. If you care about the background, I’ve included a bit at the bottom of this post.

As well as a bit of academic background, I also used to work for a company called Analysys consulting for industry, financiers and the Government on telecoms and Internet issues. One of the things we studied (which I still can’t really talk about) had to do with re-allocation of spectrum used by the mobile operators for 2G services (which is theoretically being made redundant by the introduction of 3G). Another study that is public knowledge that I was involved with was reallocation options for a range of selected spectrum bands that had become free after use in various public safety, military and emergency services roles (among other uses).

US 700MHz spectrum

The 700MHz band is a particularly attractive band for many commercial users. It is a long enough wavelength that a single ‘cell’ can cover a significant distance and also has good penetration of barriers such as walls and buildings. As wired says:

Generally, the lower a radio signal’s frequency, the farther it can propagate and the more easily it can penetrate obstacles like walls and buildings. Lower frequencies also tend to be more efficient, enabling radios to transmit more bits for each hertz of frequency band. As a result, the 700-MHz band should provide better coverage than current cellular bands, which are between 800 MHz and 1900 MHz. So if you’re frustrated by the lack of reception you get on your mobile phone while in the office, a cell service that uses 700 MHz spectrum could offer some relief.

GigaOM has more on the technical details.

Why SEOs should care

The flippant answer for why SEOs should care about the results of the 700MHz auction is that Google is involved (and we all care about everything Google does, right?).

In fact, I think there is another reason. There is a pretty good chance that the eventual winner of the so-called “C-block” of coveted spectrum is going to roll out a new (US) nation-wide wireless data transmission network. People who know about these kind of things (see GigaOM link above) estimate that using this spectrum in place of the most attractive currently available alternative will half the cost of building the infrastructure for such a network from $4 billion to more like $2 billion. That makes it pretty likely that someone planning to do this kind of thing will be the efficient user of this spectrum.

Especially in rural areas, the properties of the 700MHz spectrum mean a far greater chance of ubiquitous wireless connectivity. Finally, mobile internet comes of age.

More than anything we are currently seeing, this will result in game-changing shifts in power for online marketers. We are going to be writing more over the coming weeks about the differences between ‘regular’ online marketing and online marketing targeting mobile users. But for now, suffice it to say that much of what you currently do is going to need to be re-evaluated as more and more users go mobile.

Going back to the flippant reason: the ‘Google factor’, there has been some speculation that Google would like to win the 700MHz spectrum not only to create ubiquitous wireless data connectivity, but also that they might want to launch free services supported by usage-contextual advertising (link). Scary huh? Opportunities, though…!

Some light relief - past auction comedy

While my overview of auctions above lists loads of good reasons why they are an attractive allocation mechanism, they can also backfire badly (as can anything when governments are involved). From my paper on combinatorial auctions (compiled from J. McMillan, “Selling Spectrum Rights”, Journal of Economic Perspectives, Vol. 8, 145–162, 1994.):

Having been advised by the US/UK consulting firm National Economic Research Associates (NERA), the New Zealand government decided to adopt a second-price sealed-bid auction for their radio, television and cellular telephone spectrum. The scarcity of competition in the small New Zealand markets caused a politically embarrassing situation when winners paid prices far below their bids. Some extreme cases included a firm paying the second highest bid of NZ 6 following a bid of NZ 100,000 and another paying NZ 5,000 after bidding NZ 7m (at the time NZ 1 equaled 55 (US)). Whilst these can perhaps be justified in terms of economic efficiency (if not revenue maximization) another case of a student from Otago University bidding NZ 1 for a television licence for a small city and being awarded it for free after no-one else bid simply makes a mockery of the process.

If the New Zealand government wanted to take advantage of the nice theoretical properties of the second-price auction, they should have anticipated the relatively low competition and imposed reserve prices. Due, though, to the media furore surrounding the fiasco, this route was discarded in favour of first-price sealed bid auctions for future allocations.

Similar difficulties were had in Australian auctions for satellite television services, described by an opposition politician as “one of the world’s great media licence fiascoes”. The licences were won unexpectedly by Hi Vision Ltd. and Ucom Pty. Ltd. (beating favourites including a consortium of Rupert Murdoch, Kerry Packer and Telecom Australia). They did this by exploiting a flaw in the auction design that allowed them to default on bids without paying a penalty. They bid very high: A 212m and A 177m respectively (at a time when A 1 was worth 68 (US)), which was widely hailed as demonstrating that the Australian television industry had come of age.

In fact, they never had any intention of paying these high prices. As they defaulted on their bids, the licences were awarded to the next highest bidders: the same companies. They had placed bids at A 5m intervals right down to A 117m and A 77m respectively (both in fact going to Ucom after Hi Vision defaulted on all their bids). Ucom proceeded to sell both licences at a profit. This auction had both failed to award the licences to their efficient owners, and to generate decent revenue. In addition, the repeated default process had delayed by almost a year the introduction of pay television to a country already behind much of the world. If the cost of defaulting is low, the bidders are effectively bidding on options on the items for sale rather than the items themselves (P. Klemperer, “What Really Matters in Auction Design”, Economics Working Paper, WUSTL, 2000.).

It has been suggested that even the deposits of hundreds of millions of pounds may not have been enough to prevent default in the UK 3G telecom auctions had the desire arisen among the winning bidders - who were paying billions of pounds (P. Klemperer, “The Biggest Auction Ever: the Sale of the British 3G Telecom Licences”, Economic Journal, 2002.).

My background in auction theory

At university, I studied combinatorial auctions (which are often used in spectrum allocation) during my ‘part III’ 4th year. Combinatorial auctions are those where bidders are bidding on multiple lots at once and may have preferences for particular groups (making it inefficient to auction the lots one after another). The difficulty from a mathematical perspective is that depending on how you structure the auction, either the bidders or the auctioneer has a very hard (NP-complete) problem to solve.

I even managed to introduce a small bit of original thinking (I believe) around a particular class of auction whereby the auctioneer distributes the hard calculations across all the bidders and asks them to search for the winner. The problem with this, of course, is that bidders have an incentive to only report improved solutions that benefit them. I wrote about game-theoretic approaches to stopping bidders gaming this stage of the process.

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As I wrote earlier, ripoffreport.com is finally getting some serious push-back from people in the reputation management / SEO industry (Rand, Chris, Andy).

Now SEOmoz have kicked this into over-drive with their heavyweight legal mind, Sarah L. Bird Esq. contributing a piece on the anatomy of a ripoffreport lawsuit.

In order to help spread the word far and wide, we have created a set of badges that you can include in blog posts or on your website to show your support for the campaign to have Google do something about these shake-downs.

We have included links back to this page to explain what it’s all about and so people can get their own badges - we aren’t in this campaign for SEO benefit, so feel free to link instead to your own page explaining the situation (note that the badges are CC licensed - see below - so you can do with them as you wish), or to make the links nofollow.

You are welcome to include them using the code below:

<a href="http://www.distilled.co.uk/blog/reputation/join-in-and-do-your-bit-to-get-rid-of-ripoffreport-from-the-serps/"><img src="http://www.distilled.co.uk/distilled/images/ror-large-fire.jpg" width="253" height="104" alt="I support the campaign to get RoR out of Google" /></a>

<a href="http://www.distilled.co.uk/blog/reputation/join-in-and-do-your-bit-to-get-rid-of-ripoffreport-from-the-serps/"><img src="http://www.distilled.co.uk/distilled/images/ror-small-fire.jpg" width="73" height="23" alt="I thumbs-down RoR" /></a>

The idea is that the large one is designed to go on blog posts about the subject and the small badge is to place in a blog sidebar for example.

This work is licenced under a Creative Commons Licence. This means you can copy the images, upload them yourselves and use your own versions if you prefer not to link to us.

The badges are the work of our graphic designer, Leonie Wharton, and I’m sure she’d like a shout out if you do use our badges

I just wanted to end with a note about motives:

• My company is not (yet!) listed in ripoffreport
• I have nothing to gain from them being removed from the search engine results pages
• In fact, companies approach us asking us to carry out reputation management when they get listed in ripoffreport - we would get fewer of these enquiries were ripoffreport to be discredited in the search engines

I have said before that I am a huge fan of the power of the internet to spread consumer reports and warnings. I believe, however, that the approach of ripoffreport is far more like a shake-down than an activity in raising consumer awareness. I guess what I’m saying is that with great power comes great responsibility.

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So we’ve just got back from our first trip abroad to meet a client. Duncan, Tom and I got up crazy-early on Monday morning to get in a taxi to Gatwick, where we caught a flight to Madrid. In honour of the occasion, I thought it was only fitting that we write a post about all of the work we got done. Here is Tom in a client meeting on the plane:

The flight went without a hitch and we caught a taxi to our hotel in Madrid where we had fantastic rooms. Duncan and Tom caught a chance to do some work (or maybe just try out the chairs) in my room’s lounge(!):

We actually did a really productive afternoon of work - meetings with our client, their (external) web developers and (internal) IT guys. It’s a complicated project, with many languages, domain names, and target markets. The opportunities for confusion abound and I expect that as a result you will see us writing even more than we have in the past about internationalisation and geo-location issues and best-practices for SEO.

Following the meetings, our client showed us where to get tapas and beer in the centre of Madrid, where we got the only proof that I was actually there:

Tapas isn’t enough to sustain Distilled, however, so after that we went on to another recommended restaurant where we ate octopus:

The next day, meetings started bright and early. OK. Meetings started at 9.30am. So after a good sleep and a great breakfast, we strolled in to discuss reporting, ongoing reputation monitoring, timelines and other details of the project. Once we’d got that all ironed-out, we said our good-byes, and headed into Madrid for a final taste of Spain before catching our flight. When we got to the airport, I was working hard (OK, writing this blog post), Tom was eating nuts (check out the action shot - not bad for a mobile phone camera):

and Duncan was playing backgammon (he claims he can’t do any work when he doesn’t have wifi):

It was a pretty cool trip for our first overseas business travel and we are looking forward to more visits to Madrid and other clients in similarly cool locations. If you need to resolve complex language and localisation issues on a multi-national website, are based in southern France, northern Italy, or anywhere similar you can always give us a call.

I’ll leave you with a picture of Tom on the way back:

(You can tell it’s the way back ‘cos he’s facing the other way).

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After Google released the new Checkout Trends tool (I heard via SEL), I couldn’t resist having a bit of a play.

It might not surprise some of you to know that we care about the market for sofas, so the chart comparing bed and sofa sales was interesting (especially the huge spike in sofa sales in November 2007).

More interesting, though was the search for digital camera (click for fullsize version):

Can that really be true? Did that many more people buy digital cameras in the 2006 holiday season than the same period in 2007? It is possible - obviously the attraction of any kind of gadget declines a little once you have one (see the ipod chart), but I would still have guessed (off the top of my head) that the 2007 holiday period would see more online digital camera sales than the same period in 2006. I could be wrong though, so I decided to look at the query volumes for digital camera:

That seems to show that there actually might have been 1.5x as many sales over Christmas 2006 as Christmas 2007 - the search volume does look as though it was higher (and even higher the previous two years).

Is this actually a decline, or is it showing searchers becoming more savvy and using longer search phrases / more descriptive searches? None of our clients are consumer electronics people, so I’d be interested to hear from anyone who has data to share about this.

It is possible, however, that there is some kind of skew in the Checkout Trends data. The chart below compares digital camera sales (blue line) and book sales (red line) (click for fullsize version):

This chart confuses me on many levels. I am not sure the book market can have declined like that (even the books sold through Checkout, which would stop some of the leading players in the market being counted). I’m also not convinced by the equivalence between digital camera and book sales - I would have estimated that the book market would be many times the size of the camera market. Although cameras are more expensive, they’re the kind of thing most people only have one of - whereas most people buy many books.

Jordan over at Marketing Pilgrim has also written about weird Checkout trends.

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Protection rackets used to abound in the offline world. Dodgy blokes coming round to your shop and saying:

Pay us £xx and we’ll make sure nothing ‘happens’ to your windows

Or you park your car on a back-street and some kid comes up to you and says:

Alright mister, give us a tenner and I’ll make sure your car doesn’t get nicked

It’s a very difficult crime to stop when it happens on a small scale - each individual problem isn’t worth the police’s time to chase it down and stop it happening. The real money starts rolling in, however, when you co-ordinate the shake-downs and run them as protection rackets. The mafia used to make a lot of money this way - and a lot of the organised crime laws on the statutes were introduced to combat this.

As with so many other things, the web is challenging the limits of our old laws that were designed for an analogue world. Most of the online extortion cases I had heard of up until 6 months ago were blackmail - threats of Denial of Service attacks (where a malicious party threatens to send huge volumes of traffic at a commercial website with the intention of bringing it down temporarily). The police got involved in a few of these - they appeared to take this as seriously as offline blackmail attempts.

In recent months, however, I have become more and more aware of stories of businesses suffering at the hands of an online racket that looks a lot like offline shake-downs. A website called ripoffreport.com is supposedly a place where people can report cases of having been ripped off, but in fact contains a huge number of unverified libellous comments and accusations that are completely baseless, but that rank well in Google for the companies’ brand-name searches.

I believe they have been stepping over the line for some time - demanding payments to remove statements (even when those statements are defamatory and untrue), but the backlash is growing:

• Chris Bennett knows more about the problems with ripoffreport than almost anyone
• Rand Fishkin picked up the story about how ripoffreport are violating Google’s ToS saying it’s “shocking that the domain continues to retain its authority”
• Andy Beal has also highlighted some dreadful ripoffreport business practices

They can only make the money they do because Google in particular continues to believe that they should rank very well for all kinds of searches for the companies in question. Having been involved in reputation management projects attempting to promote quality content above ripoffreport, I know that it is very hard - for some reason, Google loves them.

As the backlash grows, Google cannot continue to claim not to know about this. It is destroying the businesses of hard-working people and in the interest of ‘doing no evil’, we would like to join the campaign to ask Google to sort this out.

Isn’t there a place for sites where you can report this kind of thing?

I would like to go on record as saying that sites like tripadvisor are a great part of the internet - allowing consumers to warn one another about businesses that aren’t delivering on their promises or that consistently let you down. This isn’t about that. This is about publishing untrue reports and then demanding money to remove them.

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Those of you who have been paying attention might remember a guest post last year from Crispian Cuss of Pittacus - a company specialising in advising companies about threats to their reputations. In their words:

Pittacus has a simple proposition: to help organisations understand their reputation threats.

Well he’s back, with another guest post. It is all about the top threats to business and is based on a survey from the end of last year.

Damage to reputation is #1 risk to business

In their 2007 annual risk management survey Aon, the Chicago based risk management and insurance experts, revealed ‘Damage to Reputation’ as being the number one risk perceived by business.

The survey asked senior management and risk managers from 320 organisations, all with revenues of over $1 billion, across 29 different countries, a variety of questions relating to risk and its implications. In a change from recent years, where operational and financial risk headed up the table, the latest results reflect a greater awareness of the changing and increasingly diverse world companies are operating in. This was reinforced with other issues such as sustainability and pandemics also moving up the table.

While reputation is often viewed as an intangible asset, its importance is clearly understood with it coming top in all three regions surveyed (Americas, Europe and Asia/Pacific). Its value was spelled out by Aon: ‘a good reputation strengthens market position, reduces the price of capital, increases corporate value, insulates the brand, enables organisations to charge higher prices, helps to attract top talent, protects organisations from unwelcome takeover bids, arms them for merger and acquisition forays of their own and raises the potential returns from share offerings’.

Despite the value of reputation being clearly understood, along with it being viewed as a major source of competitive advantage, it remains a poorly protected asset. The survey also revealed that only 48 per cent of companies were prepared to meet a threat to their reputation. Furthermore, when it came to identifying major risks facing their organisation, 42 per cent relied on senior management intuition and experience. Only seven per cent used board workshops or scenario planning, and only eight per cent used external consultants.

The top ten Risks were:

1. Damage to reputation
2. Business interruption
3. Third party liability
4. Distribution or supply chain failure
5. Market environment
6. Regulatory changes
7. Failure to attract or retain staff
8. Market risk (financial)
9. Physical damage
10. Merger/acquisition/restructuring

Thanks again to Crispian for contributing. Let’s hope some of these large organisations turn to Pittacus to understand the threats better and Distilled to help with online reputation monitoring in 2008.

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