Brands Must Monitor Social Conversation or Face Consequences
Mike Baglietto |
 06/25/20 |

brands must monitor or face consequences

Ignorance of what’s happening and being said about your brand online, is no excuse. And fallout from it, is still your fault. Brands must monitor social conversation or face harsh consequences. Just ask Nano Magic.

If you’re not online monitoring brand mentions, what are you doing that’s more important? Regardless of whether or not your brand markets online, it’s likely being mentioned online in some context. And not knowing what is being said is a dangerous game, as we’ll share here, including:

  • How “Magic” mentions may have inflated its stock price, and the company was left liable
  • Mentions that no brand should ever miss
  • Brand monitoring 101, as well as some advanced alerting to have top-of-mind

Also, there’s a couple things you’ll want to keep in mind when a crisis looms:

  • 66% of consumers believe transparency to be one of the most attractive brand qualities.
  • 86% of consumers say authenticity is a determining factor in which brands they like and support. And which they do not.

In crisis mitigation, whether the root causes are internal or external, it’s crucial to get in front of the online narrative with authenticity and transparency. Brands can’t leave it all to chance . . . or magic.

How Strategic Brands Prepare for and Manage a Social Crisis 2020

Magic Mentions May Have Inflated Stock Price

Nano Magic, newly rebranded from Pen Inc. in April 2020, is a nanotechnology company with patents and products covering an array of cleaning applications which recently found itself in hot water with the Securities and Exchange Commission (SEC) over misleading information in the marketplace.

So, what got them in trouble? We’ll get to that after a quick backstory.

One of their patents filed in October of 2019 was for a cleaning product that, among other things, eliminated the Human Corona Virus 229E with an effective rate of 99.9%.


It should be made clear that this was filed before the COVID-19 pandemic was a thing, so these findings were unrelated to the current strain of coronavirus in any way.

The Social Conversation Turns Tricksy

However, back in March a very small online conversation among investors emerged and there was some speculation that this product may be effective against the coronavirus responsible for COVID-19. And while Nano Magic stock was extremely cheap, there were those waiting in the wings hopeful for the stock to take off.


As you can see from the following chart, Nano Magic was trading below a dollar as a rule prior to March; and then the stock more than doubled in price. It jaggedly moved upwards through the end of April aligning neatly with the world’s infatuation with cleaning supplies.


What caught the eye of the SEC and led to its decision to impose a two week ban on trading for Nano Magic (NMGX) stock was the fact that the online chatter blatantly furthered the idea that this product was effective against the novel coronavirus.

Catching the SEC’s Eye Is Rarely a Good Thing

The ‘$PENC’ referenced in the below graphic was the ticker symbol for Pen Inc. before they rebranded to Nano Magic on April 7, 2020:


This claim of course is unsubstantiated and the SEC issued its ruling on April 30th to protect investors from being potentially duped, stating their decision was:

“ … because of questions regarding the accuracy and adequacy of information in the marketplace since at least February 24, 2020 … including: (a) information in the marketplace claiming that the Company has a patent for a disinfectant that kills “coronavirus”; and (b) a statement made by NMGX on April 7, 2020 regarding the Company’s involvement in the fight against COVID-19.”

Now whether this activity is suspicious or not is beyond the scope of this article as we’re are primarily focused on what happened next. Or perhaps more rightly … what didn’t happen.

The Nano Nonresponse That Nailed Them

After the SEC shut them down, Nano Magic sent them a rebuttal claiming that it was completely unaware of the online activity and brand mentions regarding how it had developed a product that could kill the virus responsible for COVID-19.

Now if they were blindsided by the hitherto unprecedented number of brand mentions (albeit small), they are still on the hook to their investors and have a lot of explaining to do. They had to have noticed the stock price increase and wondered why. Not really a smart way to go into a rebrand is it?

This online conversation was exceedingly small and mainly flew under the public’s radar without much notice. However, in this case it only took a handful of posts for the SEC to notice and that speaks volumes about Nano Magic’s brand awareness. And about the SEC’s watchfulness.


And this is why monitoring brand health is so vital. Nano Magic could have spotted this activity and filled up all of this empty space with its own narrative:


One has to assume they had better things to do, as none of the above conversation is generated by Nano Magic itself. No appeal to the public, no explanation. Nothing but a squabble with the SEC. And now they’re suffering for it.

In light of this, it never hurts to take a few moments to reassess your brand awareness and see where it can stand an upgrade.

How Strategic Brands Prepare for and Manage a Social Crisis 2020

Making the Most of Brand Monitoring

To effectively monitor and safeguard your brand health, brands must consistently understand the ebbs and flows of the global conversation surrounding issues, trends and emergent technologies relevant to your category.

Back in March/April, the disinfectant topic was on everybody’s mind and then came the President’s comments regarding ingesting them to combat coronavirus. It was a whirlwind of conversation and negative sentiment. And Nano Magic was prepping for a rebrand in that climate.


Above is the overall conversation at the time, and below is the superimposed sentiment map.


An analysis of content themes in Quid Apps would have shown Nano Magic that maybe now is not the time to have people online saying our disinfectant can do something it can’t.


Allowing misinformation around their disinfectant to circulate in that social atmosphere was borderline suicidal. And yes, these days not knowing is synonymous with allowance.

Brand Crises Are Coming for You Eventually

Since a brand crisis is not an if, but a “when” scenario, it is certainly an area that you don’t want to scrimp on. As you can see, a PR misstep can be every bit as detrimental as a supply disruption or network failure and can easily snowball unnecessarily.

Due diligence in this area would have saved Nano Magic a lot of trouble and the sad thing is … it would have been super easy to avoid. And that’s where NetBase Quid does the heavy lifting.

So – when your next crisis emerges, make sure you are using all the tools at your disposal to flatten the curve.


And one of the absolute best ways to do this is to set alerts. It really unlocks the full potential of your next generation AI-powered social media analytics, making sure you and your team are aware of spikes in your mentions before the rest of the world does.


Put an Alert On It

In NetBase Quid you can set alerts to cover three areas:

  1. Metric Alerts – send notifications when a selected metric for a saved analysis matches alert configuration options.
  2. Mention Alerts – send notifications at intervals you specify when mentions that match a saved analysis are posted.
  3. Triggered Alerts – send notifications whenever NetBase detects unusual changes in mention volume.


And with the ability to add up to 24 subscribers to your alerts, you and your decision makers will know in an instant when any social activity starts to move outside of your baseline.

It’s seriously 30 seconds of work that could have saved Nano Magic all of the troubles they find themselves in now.

Understanding the conversation surrounding your brand category gives you the advantage to initiate your crisis response, take control of the narrative and ensure that you are never in the position of telling your investors that you just didn’t see it coming. And with the power of next generation artificial (AI) at your fingertips you’ll have world-class machine learning mining the social landscape in its entirety to ensure you don’t miss a thing.

Be sure to reach out for a personalized demo to see how you can get your brand awareness on point!

How Strategic Brands Prepare for and Manage a Social Crisis 2020

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