The Effect of Bad News and CEO Apology of Corporate on User Responses in Social Media

While social media has become an important platform for social reputation, the emotional responses of users toward bad news have not been investigated thoroughly. We analyzed a total of 20,773 Twitter messages by 15,513 users to assess the influence of bad news and public apology in social media. Based on both computerized, quantitative sentiment analysis and in-depth qualitative analysis, we found that rapid public apology effectively and immediately reduced the level of negative sentiment, where the degree of change in sentiments differed by the type of interactions users engaged in. The majority of users who directly conversed with corporate representatives on the new media were not typical consumers, but experts and practitioners. We extend the existing cognitive model and suggest the audiences’ psychological reaction model to describe the information processing process during and after an organizational crisis and response. We also discuss various measures through which companies can respond to a crisis properly in social media in a fashion that is different from conventional mass media.