THE DOUBLE PARADOX

This is a case study from 1999. It is still relevant today:

It was a chill morning in London on October the 16 1986 and a day that was to create
one of the pivotal events in Internet Activism. It was the day when a campaign was
started to put McDonalds in the centre of anti-corporatism by a number of activists.

It gave rise to the longest civil court case in history between David Morris and Helen
Steel and McDonald's.

The appearance of a Web site created by the activists, came in February 1996 when
Morris and Steel launched the McSpotlight site from a laptop connected to the
internet via a mobile phone outside a McDonald's store in Central London. The
Website was accessed more than a million times in its first month. It was headline
news across the world.

By any standards, the McSpotlight site is big and has an amazing amount of content.
A large part of the content is critical of McDonald's and some is allegedly libellous.

£60,000 settlement against Morris and Steel, the Web site was accessed 2.2 million
times.

The first paradox is that McDonald's won the court case but the allegations are still on
the Web site available to this day (and is mirrored across the world so that if it is
turned off in one country, its content can be accessed from another).

The second paradox is that with so much criticism about the company available for all
to see, the company remains one of the most successful food retailers in the UK and
across the world. McDonald's ten years after the court case was the largest and best-known global foodservice retailer it had more than 24,500 restaurants in 116 countries. Its share price was four time higher than when the McSpotlight site was launched and dividends per share were up 44%.

It there a linkage between corporate performance and Internet criticism? Will there be
a link as the Internet expands?

There are a number of considerations. The first is that all this happened a long time
ago. In 1997, at the end of the court case and 18 month after the launch of
McSpotlight, the on-line population was 57 million (in 1999 it was 179 million) of which
only 960,000 were in the UK (over 10 million in 1999)

Today, the McSpotlight site is really a gateway site for people who are interested in
anti-corporate activism. Compared to many other activist issues, McDonalds is a
relative side show.

McDonalds significance for most people is its brand strength. It is a company that
delivers on its promise (caviar no, fries yes, silver service no, in a box with a paper
tissue yes). In this respect it is trusted by consumers.


The apparent double paradox is, in fact a matter of timing and the fast changing
dynamic of the Internet.

The Consumer Opinion pages of Yahoo show a list of rogue sites which reputation
managers should visit to see examples of what may affect them at any time.
Smaller brands in a virtual community ten times as big, may not be so lucky. So just
when should a company get scared of the Internet?

There is a lot to take out of this.

Critically, there is an issue of the real effect of activism on reputation and the effect of reputation on the value of companies.

Is the effect of the internet on markets more potent today than ten or even six years ago?

Do the financial markets reflect the trading patterns of companies under pressure from Internet activism?

Is there a parallel for, say Dell and in the blogging era.

Perhaps its time to re-visit the effects of on-line activism.