Could Your Social Media Fail Cost Millions?

by PR Coach

Social media mistakes costing millions

A July 2011 study released by Symantec showed mistakes in social media cost major corporations an average of $4.3 million in the past 12 months. This should raise big alarm bells for PR and social media managers.

The survey focused on the public relations disasters, lawsuits, security breaches and other social media risks of organizations with more than 1000 employees.

“Businesses know how important it is to protect and preserve email, IM, spreadsheets and other unstructured information. Now they need to recognize that information flowing through social networks is equally important,” said Greg Muscarella, senior director of product management for Symantec’s Information Management Group.

The survey found the top three social media problems experienced over the last year were:

  • employees sharing too much information in public forums (46%)
  • the loss or exposure of confidential information (41%)
  • increased exposure to litigation (37%).

More than 90 percent of respondents who experienced a social media incident also suffered costly negative consequences including:

  • reduced stock price (average cost: $1,038,401 USD)
  • litigation costs (average: $650,361)
  • direct financial losses (average: $641,993)
  • damaged brand reputation/loss of customer trust (average: $638,496)
  • lost revenue (average: $619,360 USD).

The implications are clear for all social media managers. Social media mistakes can be hugely expensive and could have a major impact on operations, reputation and other important business functions. As with any crisis or risk management plan, preparation and prevention are the best antidotes.

Here are several measures to put in place:

  1. have a social media policy with clear guidelines for employees; ensure it is widely available and employees are familiar with it
  2. know what regulations or laws apply to your business and what social media you may need to save or archive
  3. have a proactive social media monitoring program underway
  4. do communication audits at least annually and spot check your social media channels regularly for issues
  5. because social media moves so quickly, prepare an online crisis strategy and have your your crisis team trained and ready to respond instantly.

So are businesses prepared for the impact of social media failure? It seems not! The CIA, Lady Gaga, Fox News and Hugh Grant were all recently hacked. The Symantec study showed that only 24% of companies had a social media policy in place and only 22% had trained employees.

A SmartBrief poll also found that 43% of respondents do not have measures in place to prevent their social media from being hacked.

Predictably, many organizations are only giving lip service to social media risks but this is an incredible display of poor management in large and small businesses today.

Quick thinking PR pros may impress senior management by asking some strategic questions and suggesting some smart social media risk management strategies.

The potential for devastating costs and risk to your organization from social media mistakes are significant. Smart social media managers in businesses of all sizes should make social media risk management part of their critical responsibilities. If not, the damage could be in the millions.

Further Reading

We’ve got a selection of useful links to help PR pros get up to speed on developing social media policies, managing online crises and managing social media risk.

Social Media Policy Tips

3 Great Social Media Policies to Steal From  [Jennifer Van Grove]
57 Social Media Policy Examples and Resources  [Dave Fleet]
Creating a Corporate Social Communications Policy  [BurrellesLuce]
Social Media Policies: An Introduction – excellent free eBook [Dave Fleet]
Social Media Policy Examples  [123 Media]

Online Crisis Management Tips

5 Steps to Online Reputation Management  [Jonathan Hemus]
6 Ways to Avoid a Social Media Meltdown  [Giga Om]
13 Ways to Monitor Your Brand on Social Media: Do You Know What’s Being Said About Your Company Online?  [Jeff Bullas]
Applying Risk Communication Principles to Social Media Crisis  [Valeria Maltoni]
Best Practices for Crisis Communications Over Social Media  [David Spark]
Crisis Communications in Social Media: Are You Ready?  [Valeria Maltoni]
How to Use Social Media for Crisis Management  [Kristi Hines]
Reinventing Crisis Communications for the Social Web  [Brian Solis]

Social Media Risk Management
Symantec Finds Enterprises That Are Not Preserving Social Networking Business
Content Risk Increased Litigation Costs and Company Reputation
Could Social Media Flub Cost You $4.3 Million?  [Information Week]

Did you know our digital PR Library has more than 8,500 curated articles, tools and resources including online crisis management and social media & PR strategies? Come in and browse to your heart’s content but please, no chewing gum or loud talking.

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Infographic:  Symantec

Author: Jeff Domansky is Editor, The PR Coach

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