By Nin-Hai Tseng, Fortune Magazine March 24, 2010 12:45 PM
Five days a week, and sometimes weekends, Larry Rubinoff pounds away on his laptop with a mission: Expose what he believes to be the truth about the big banks’ roles in the global financial meltdown.
For this semi-retired mortgage professional turned blogger, running Goldmansachs666.com isn’t just a hobby, it’s a full-time job. “To demonstrate how destructive [Goldman Sachs is] to our lives and the hopes and dreams of our children,” is part of the motto/disclaimer splashed across the front of the site. “What’s going on is wrong and we need to correct what’s wrong and get to the truth,” said Rubinoff by telephone from his Florida home.
The global financial crisis has spawned dozens of Rubinoffs who have unleashed their frustrations onto the Web. To name a few, there’s Banks are Evil and Bloggers Against Chase Bank. And Huffington Post co-founder Arianna Huffington urged Americans to boldly move their money away from big banks and into community institutions in her Move Your Money campaign (which has drawn 34,842 Facebook fans as of Friday morning). Then there is ZeroHedge, the big daddy of anti-banker sentiment, which often reports information from dissident bankers working inside the system itself.
These bloggers might sound like just another batch of disgruntled Wall Street critics. But corporations are paying attention to them. They’re watching their YouTube videos, reading their posts and tracking their Tweets, because they can’t afford not to. It’s not just the content of their messages that matter but their presence on the Internet. By talking about banks negatively online, the bloggers essentially become the online presence of those banks. And that’s something no industry, let alone one that depends on the trust of its customers, can long abide.
The question is, can the financial industry tweet or blog its way out of a bad rep?
Damage Control 2.0
Last month, Citigroup (C) launched “New Citi,” a blog where CEO Vikram Pandit and other high-level executives try and rebuild trust with a recession-worn public. Citi was one of the largest recipients of government support during the wake of the financial crisis, receiving more than $45 billion.
The blog encourages visitors to post comments about reform, recovery, and responsible finance. A quick review of the comments seems largely positive, with a few negative remarks. “When you look at Citi and what we’ve been through in the last two years it’s clear that we made some mistakes,” Pandit says in a video posted on Feb. 1, highlighting how Citi has worked towards more responsible financial practices with a new management team, a revised governance structure, and other similar measures.
“Just talking about change is not enough,” said Aneysha Pearce, associate partner at Prophet, a strategic brand and marketing consultancy headquartered in San Francisco. “Consumers have to feel it and see it.”
In other words, action counts. Pearce led a 2009 survey of U.S. consumers that ranked the reputation of the financial services industry dead last — lower than the insurance, health care, and oil and gas industries. Which is not surprising, given the extra scrutiny bankers and financiers faced following the mortgage crisis and massive industry bailouts, she said.
While blogging or tweeting alone might not change a company's reputation, “social media has the potential to force conversations that will ultimately be in the public record and that can enforce accountability,” said Giovanni Rodriguez, co-founder of the Conversation Group, a social engagement consultancy.
Tweeting for happier customers
Increasingly, banks and financiers have turned to social media to communicate with investors and customers. In response, the National Futures Association drafted rules to cover the way its 4,000-plus member firms market and promote via Facebook, Twitter, YouTube, and the plethora of other social media tools — marking the first time the association explicitly addressed the topic. The Financial Industry Regulatory Authority has also developed usage guidelines (download podcast) for blogs and social networking sites.
David Spark, founder of Spark Media Solutions, a San Francisco-based new media consultancy, said Citi’s blog can only help. “Your best customers can often first be complainers,” Spark said. “If someone makes the effort to go to your site and complain then they care. It’s not like they’re saying, ‘I hate Citi.’ It’s more like ‘Hey, I care about my money.’”
But online public engagement can be a dizzying, if worthwhile enterprise. At many corporations, especially in heavily regulated industries like banking, every Facebook posting, every blog reply, every video, and every tweet typically must go through some kind of internal review before going public. Still, saying something is preferable to saying nothing, especially when everyone else is talking about you.
Rodriguez points to the Wells Fargo-Wachovia blog as one example of outreach done well. Hosted by real employees, the site addresses customer questions and concerns, mostly about changes happening with the merger of the two banks. At a time when critics of the financial services industry are calling for more transparency, the blog puts a human face — literally showing pictures of the bloggers — on the huge institution. “It invites the public to talk with them about the integration of the two companies, a mission-critical project for the bank after the financial meltdown,” Rodriguez said.
Goldman Sachs (GS), perhaps because it usually deals with the ultra-wealthy or other institutions, has been less savvy with social media. At the moment, the bank has no plans to launch a blog or create a Twitter account, a spokeswoman said. Instead, the firm responds to issues raised in the media with statements available in its On the Issues site.
When Goldmansachs666.com first launched February 2009, the firm responded with a trademark infringement lawsuit. The case was resolved and the blog now has a disclaimer. Rubinoff says managing the blog has been worth all the energy. He notes one of its latest successes for the site, which mixes mainstream media reportage with global conspiracy theories from the fringes of the financial world: It ranked No. 6 in Wall Street Journal columnist David Weidner’s top Ten Wall Street Blogs You Need to Bookmark Now.