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Even as more and more companies embace social media for internal and external communication, only a few are actively managing the risk that social media entails. These companies are strolling unprotected through a minefield that might one day destroy a cherished brand or lead angry regulators to their doorstep.
According to survey results from the Altimeter Group, nearly “two-thirds of companies surveyed say that social media is a significant or critical risk to their brand reputation.” But 60% of those companies deliver social media training and expectations to their employees only once - upon their hiring - or don’t bother to train their employees about social media at all.
That’s a pretty big group, especially since other reports peg the proportion of U.S. companies using some sort of social media at 80%.
“Companies are often aware of the risks at some level, but instead of taking specific concrete actions, they cross their fingers and hope that they dodge the bullet,” wrote Alan Webber in the report.
With so many companies using social media, and even acknowledging the risk involved with using it to communicate with customers through branding and marketing efforts, why are so many firms not being more proactive about protecting themselves?
“The simple answer is that most companies are still enamored with social media and don’t want to admit that there is a risk–simply if we don’t see it, it really isn’t there,” Webber told ReadWriteWeb. “For those that acknowledge the risk, even most of them just assume that they won’t be targeted or what they already have in place if crisis comes is enough.”
Assessing the Risks of Social Media
the risks can be serious and varied. Brand reputation, which topped survey results for concerned risks at 66%, can massively effect a company’s credibility, as Kenneth Cole learned in February 2011 when the company tweeted “Millions are in uproar in #Cairo. Rumor is they heard our new spring collection is now available online at http://bit.ly/KCairo – KC”It may not be enough, because
Then there’s the risk of releasing confidential information. That’s what happened to Gene Morphis, the former CFO at Francesca’s Holdings (a fashion retailer and public company), who was fired in May after tweeting confidential information like “Roadshow completed. Sold $275 million of secondary shares. Earned my pay this week.” on January 27.
You don’t even have to originate the poor communications to be at fault, either. In 2011, the Australian Competition & Consumer Commission found Allergy
Pathway Pty Ltd. at fault for misleading comments fans on its Facebook page and Twitter made about the company’s products. Even though
Allergy Pathway didn’t actually make the false statements, the Commission fined the company for not correcting them after the fact.
The risk of hijacking is also a real problem, as Shell Oil discovered to its dismay this summer when it tried to launch the now-infamous “Let’s Go” ads, only to find social media-distributed mock ads proliferating the Internet like wildfire and a fake Shell Twitter account broadcasting mock threats to perpetrators. McDonald’s found itself in similar straits back in January when its #McDStories Twitter campaign was tweetjacked with embarrassing stories about the restaurant chain instead of the wholesome, fun stories it seemed to be seeking.
Dealing with the Risks of Social Media
Altimeter’s report emphasized that all the risks must be identified before a company can properly manage them. And resource dedication must be a part of that management plan. The survey identified 43% of respondents having less than one full-time-equivalent staffer dedicated to managing social media risk.
The report urges companies to start taking social media a lot more seriously, even following IBM’s example by making social media a board-level issue. A good place to start is to watch and learn from other companies' mistakes and successes in dealing with social media crises, and learn from your own company’s past mistakes, as well. Once your social media responses are in place, test them through exercises or even full “war games” to see how the plan works.
Ignoring the risks of social media is a dangerous game. The real question is when, not if, a social media storm will threaten your company.
Images courtesy of Shutterstock.