Why Sony Sustained so Little Brand Damage From Hackings

Experts: Consumers Are Inured to Cyber Attacks

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Despite a string of recent attacks on Sony's network of various websites and databases, the electronics giant's brand has surprisingly come out mostly unscathed. But that 's not only because of the strength of its brand -- experts said it's also because consumers have become inured to such hacks on marketer databases.

Experts say that consumers understand strong brands like Sony are increasingly becoming targets of hackers.
Experts say that consumers understand strong brands like Sony are increasingly becoming targets of hackers.

At the end of April, Sony said its PlayStation Network, which allows play and communication online with other users, was hacked, with more than 75 million accounts stolen. Since then, there have been several additional attacks on Sony's international websites including those in Canada, Greece, Indonesia and Japan. Then, at the beginning of June, a hacking group called Lulzsec posted customer information online, including email addresses and website passwords that it stole from Sony Pictures' websites.

Sounds like irreparable brand damage, right? Wrong. "There's definitely chatter about the hackings, but it's not huge," said Lisa Joy Rosner, chief marketing officer at NetBase, which analyzes consumer insights and online behaviors by scanning social media sites. "It's not devastating."

As hacks of companies have become more common in recent months, consumers are getting accustomed to the disruptions and understand strong brands are increasingly becoming targets of hackers. As a result, brands are coming out of these episodes less harmed than they would have just a year ago. "The reality is companies are under attack," said Andrew Szabo, founder and principal of Marketing Symphony, mentioning Google, marketing firm Epsilon Data Management and Lockheed Martin Corp. as recent high-profile targets. "If Sony had been the only one hacked into, the impact on the brand would have been much greater. Unfortunately, they're in good company."

NetBase noticed continued significant positive sentiment for Sony, the parent brand, in the past few months despite the attacks. Sony PlayStation, one of the marketer's most visible brands, was more affected by the hacking, although the negativity was short-lived. Some of the main complaints on Facebook and Twitter revolved around PlayStation customers expressing frustration at not being able to play their favorites games online, said Jenny Vandehey, consumer insights and strategy marketer at JD Power & Associates. Meanwhile, there was hardly any reaction to the recent hacking of Sony Pictures. "The most recent hacking didn't get the same level of negative buzz," she said, adding that "it didn't have a direct involvement with the consumer lifestyle."

"I would expect in the short term that trust perceptions could erode and sales might suffer," said Ann Green, a partner in the client solutions group at Millward Brown. "Overall, it's a very strong brand, but other gaming consoles such as Wii and Xbox 360 are well placed as trusted brands. It will be key for Sony to manage their communication well, clearly establishing and addressing the facts in order to regain strength."

Indeed, what matters most to preserving the Sony brand in the long term is how the company addresses the security breaches and how it communicates with its customers. Many complained that Sony revealed the attack on Sony PlayStation almost 10 days after it actually happened and that the company kept the PlayStation social network down for close to a month.

While slow to communicate with its customers, Ms. Green doesn't think Sony Playstation was slow to accept responsibility and act. She applauds the company for taking the network down immediately and offering users complimentary enrollment in an identity-theft protection program.

Sony also provided two free games after the network was back up, which fueled positive buzz on social-media sites: "Hate the people who hacked the PlayStation network and got it shut down for over a month, but because of them I got two free games so I'm pretty happy," a Facebook user said on June 4.

Now the company must focus on strengthening its security and preventing further attacks, which may prove to be one of the most challenging tasks. "They have a lot of properties to protect," said Steve Orrin, director of security solutions at Intel Corp. "They're trying to prevent all possible attacks, but the attackers only need to find one hole."

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