An article in yesterday’s New York Times on General Motor’s use of social media to respond to its ongoing ignition switch crisis raises an interesting question: why, when the mainstream media, the company’s Facebook page and other online channels are full of complaints has its broader online reputation barely been impacted (according to data from Crimson Hexagon)?

If you were in GM’s shoes, which would you regard as the more accurate and useful reflection of its corporate reputation at this tricky time: online reputation or mainstream media coverage (irrespective of concerns about the quality of social media sentiment data – though, to be fair, it is in my experience better than most at Crimson Hexagon)?

Social media’s role as a real-time focus group of thousands sounds valuable and useful.

Your online reputation, after all, is your reputation.

Or so it is said.

But whilst this is a nice marketing phrase, it is also highly misleading.

Here are six reasons why online reputation needs to be treated with caution as a measure of broader reputation:

1. Reputation is the sum of how many different stakeholders, from customers, employees and investors to government, investors and suppliers, view a company
2. These stakeholders often have different interests and talk about different topics in relation to the company
3. A company’s online reputation is almost always dominated by discussions by customers and prospective customers about its products, especially if it is a consumer goods or services player
4. While many customers now like to communicate with companies via social media, the great majority still prefer to use conventional channels such as call centres to register and resolve customer care queries and complaints, meaning many negative perceptions never make it online
5. Some stakeholder opinions are rarely voiced in social media. When was the last time you heard a high-level regulator actively discussing a company on Facebook? Ditto for pension fund managers or buy-side analysts on Twitter?
6. The relative importance of different types of stakeholders varies over time. During its current recall crisis, GM’s core audiences will be the government, its customers and investors, and it is on them that it is most likely focused as an organisation.

‘Online reputation’ (however measured) is a reasonable and timely indicator of a firm’s broader reputation from a customer or general public perspective. 

But it should not be treated as an accurate or comprehensive reflection of the full range of views or, necessarily, of the relative importance of different stakeholders to that organisation, at any given time.

In this regard, mainstream media is often a more useful gauge of non-customer stakeholder audiences, including government and business opinion-formers.

Companies would do well to listen closely to both social and mainstream media for different if complementary reasons.