In case you missed it, in mid-March Greenpeace launched a campaign against Nestlé, criticizing Nestlé for using palm oil companies that allegedly destroy Indonesian rainforest and threaten Orangutan habitat.

The centerpiece of Greenpeace’s attack on Nestlé was a 60-second video the NGO posted on YouTube spoofing their Kitkat “Have a Break” advertising campaign. The Greenpeace video featured a bored office working indulging in a Kitkat bar. Peeling back the wrapping, the worker reaches for a chocolate-covered ladyfinger wafer only to extract an ape finger. When he bites down on the tantalizing snack, blood oozes down his chin and splashes onto his keyboard to the horror of his coworkers. “Have a break?” reads the on-screen text. “Give the Orangutan a Break.”

The video was reportedly viewed by fewer than 1,000 people and may have languished in obscurity had Nestlé not taken the usually heavy-handed approach of demanding that YouTube remove the offending post citing copyright infringement.

Greenpeace immediately reposted the video on Vimeo.com and sent tweets and messages through other social media outlets about the video’s suppression initiating a firestorm of discussion about Nestlé’s inadequate environmental practices.

Nestlé responded within hours by issuing a news release stating that it had “replaced the Indonesian company Sinar Mas as a supplier of palm oil with another supplier for further shipments,” and insisted that no palm oil from Sinar Mas had been used outside Indonesia. However, the company admitted that it could not guarantee that Sinar Mas palm oil wasn’t finding its way into the shipments of other suppliers it used.

Undeterred, Greenpeace hijacked Nestlé’s Facebook fan page, encouraging followers to post profile pics with creative versions of the Nestlé logo along with derogatory comments about the company’s environmental practices. Nestlé’s moderator was not amused, posting this edict on the Nestlé Wall:

“To repeat: we welcome your comments but please don’t post using an altered version of any of our logos as your profile pic — they will be deleted.”

Nestlé’s Facebook page was besieged by critics deriding the multinational confectionary giant for censorship and precipitating a scathing war of words. At one point during the online exchange, Nestlé’s moderator sarcastically responded to a poster with:

“Thanks for the lesson in manners. Consider yourself embraced. But it’s our page, we set the rules, it was ever thus.”

Fans went ballistic and an avalanche of rants on Nestlé’s Facebook page ensued. Outgunned by critics, Nestlé’s moderator went silent after posting the following apology:

“This (deleting logos) was one in a series of mistakes for which I would like to apologize. And for being rude. We’ve stopped deleting posts, and I have stopped being rude.”

Clearly, Nestlé dropped the ball badly. Rather than address the issue at hand, Nestlé antagonized its followers until the story morphed into “Nestlé tries to censor Greenpeace and Facebook.” In the end, the company drew far more attention to the palm oil issue than warranted and handed Greenpeace a decisive PR victory.

In retrospect, Nestlé’s Facebook fiasco provides some important lessons on how companies should manage an online social media crisis.

Develop a Social Media Strategy:  Too many companies jump head first into social media without a comprehensive communications strategy, a clear set of policies and measurable goals. Facebook, Twitter, YouTube, blogs and other social media channels are great avenues for reaching out and building relationships with consumers, but the expectation is that the company will engage in a two-way dialogue with its followers. This often means dealing with criticisms, potshots and at times unfounded allegations. Do you have a comprehensive plan for engaging online audiences or managing an online crisis?

Establish the Ground Rules for Dialogue:  Whether it’s a blog, Facebook fan page or other social media channel, a company should outline the rules of engagement for people posting on the site. A simple welcome statement outlining the rules governing language, ethnic or religious slurs, personal attacks or comments clearly off topic will set the stage for dialogue. This will enable you to remove offending posts without appearing to be a reactionary censor. However, it does not give the moderator free rein to remove every post that disagrees with or criticizes the company. Don’t promise openness and transparency if you’re not going to follow through.

Monitor Social Networks:  Negative news spreads faster than ever before on Twitter, Facebook, YouTube and blogs. Establish weekly or if necessary daily social media monitoring to track what being said about your company so you can respond accordingly

Recruit Allies:  Before a crisis strikes, identify your online supporters and build relationships. One of the most striking aspects of the Nestlé crisis is how isolated the company appeared. Building positive relationships with supporters can go a long way towards balancing the online dialogue once critics come out of the woodwork.

Respond Quickly:  Information moves at lightning speed on the Net. Organizations today have to be fast and nimble. It’s critical to respond within hours to a crisis situation, not days. Waiting too long to respond can cause a situation to escalate.

Remain vigilant but don’t overreact. Establish social media engagement guidelines so the company takes the right tack when responding to a lone, determined detractor or managing a full-scale, organized attack.

Tailor Your Response to the Situation:  Train staff responsible for social media and make sure all comments and responses from the company are courteous, respectful and professional. Above all, don’t get into arguments with posters. If the online community is alleging the company is doing something wrong, tell them what you’re doing to fix the problem or address their concerns. If their information is inaccurate, set the record straight and/or direct them to an independent third party who can corroborate your side of the story.

People don’t relate to big, faceless corporations. They relate to people. One of the many mistakes Nestlé made was letting an anonymous moderator hide behind their brand. In any crisis situation, people are looking for leadership. If a crisis escalates, don’t let a foot soldier lead the discussion. Get the CEO or Sustainability VP online immediately, taking responsibility and directing the response.

Take a page from both Domino’s and jetBlue Airway’s book. When two Domino’s employees posted an unappetizing video on YouTube, the company posted an apology on its website, asked employees to Twitter a link to it and CEO Patrick Doyle posted a videotaped apology on YouTube.

After a fierce winter storm resulted in massive flight cancellations in 2007, jetBlue Airways ran full page advertisements in newspapers in New York, Boston and Washington, D.C., apologizing to customers. JetBlue founder and CEO, David Neeleman, also posted an apology on YouTube. The incident also prompted Neeleman to announce a customer bill of rights that outlined steps the airline would take in response to future service interruptions.

Both companies were commended for their prompt and sincere responses.

Direct the Discussion:  Any company with an online presence should expect some sort of criticism. Nestlé’s undoing was letting its Facebook fan page get hijacked because it had no alternative for public input. If you’re going to invite commentary, set up a dedicated discussion area with designated threads to focus and manage the conversation. Critics will have a forum and the company’s brand will be a less visible target.

Don’t Be Defensive:  It’s impossible to win the hearts and minds of the online community if you’re in a defensive position. Take control of the situation. Focus on what you’re doing to address the issue and the progress you’ve made. If you’ve made a mistake, fess up. In the end, admitting fault, apologizing and outlining what you’re doing to ensure the situation doesn’t happen again will go a long way towards reestablishing trust and credibility.

Build Bridges:  All crises are resolved one way or another. Once the dust has settled, it’s good policy to reach out to your detractors in a less emotionally-charged environment and solicit their ideas on how you can better work together or find solutions to outstanding issues. Reaching out and building bridges will go a long way towards helping the company avert another crisis down the road.

The story was the City of Vancouver and the provincial government’s opening of the Downtown Eastside Connect centre last Monday, billed as an international media and tourist centre to educate visitors on social issues facing Downtown Eastside residents. In addition to perusing the glossy photos of homeless Vancouverites, complete with condensed tales of hardship and challenges in the ghetto, visitors to the centre can rent a homeless person for a nominal fee who will regale you with stories of life on the streets in the Downtown Eastside for 30 minutes.

Not surprisingly, the media weren’t particularly on board with the Mayor’s enthusiasm for the centre. (See Miro Cernetig’s story in the Vancouver Sun) Aside from the blatant objectification in presenting homeless people as a human “library”, what’s really disturbing was how badly Vancouver Mayor Gregor Robertson muffed his message.

Mayor Robertson broke one of the cardinal rules of media relations: Don’t reply to a negative question by repeating the negative. By denying that the Downtown Eastside Connect is a “spin centre,” the Mayor came across as defensive and provided journalists with a juicy negative headline, in the hallowed tradition of Richard Nixon’s “I am not a crook!”.

When hit with a negative question, your first response should be an instant deflection of dismissal, such as “Quite the contrary, or “There’s another way to look at that” , or even the personable: “I prefer to see it this way.” Then move on to a positive statement by listing the attributes of what’s being discussed.

This will prevent you from coming across as defensive and increase your chances of communicating your announcement in a positive light.

Catch Paul Sullivan’s column in today’s Metro on politicians behaving badly.