Headline risk: Forging a crisis communication keystone

Abstract

In March 2023, headlines about a single ill-conceived press release amplified in the social media triggered a one-day, $42 billion bank run that threatened to destabilise the US financial system. The Silicon Valley Bank collapse represents an extreme example of headline risk, the potential for breaking news to trigger a PR crisis and corresponding brand and business shocks. This paper presents the results of exploratory research supporting the creation of risk management frameworks for measuring, monitoring, managing and ultimately mitigating financially material headline risk. Based on brand tracking data for 24 major companies covered by the news media queried and visualised using an AI-enabled analytics tool, the study confirms that news corresponds to tail risk—defined in this study as low-probability, high-impact events that major companies and national brands would term crises. Time-series data tracking the volatility of consumer attention and the valence of media buzz support an architecture for constructing rigorous communication research and headline risk management frameworks. Crisis communication emerges as the initial phase in managing exogenous, idiosyncratic shocks marked by significant negative shifts in brand perceptions and consumer purchase consideration.