Social Media Risks and Impact

In my previous blog titled “Social Media value for businesses” I spoke about the opportunities that are presented my social media and the need for businesses to rethink their strategy on how they engage and connect with their customers. The inspiration for companies to use social media for corporate communications is reinforced by the study conducted by Postman in 2009 which indicates that social media enhances brand awareness and perception, promotes better engagement with stakeholders and presents a richer experience and interaction with users.

These benefits noted above have resulted in a substantial number of companies participating in social media platforms to exploit the existing communication opportunity. However, other companies choose to remain conservative in how they engage and communicate with their customers, which usually depend on the nature of their business. For instance, companies in construction and mining generally do not participate in social media platforms, mainly because their customers are companies and organisations as opposed to ordinary individuals.

What many companies and individuals are unaware of is that social media is dynamic because it comes with inherent risks which do not only impact companies that subscribe to social media but also those who do not subscribe. For example, the bridge that collapsed in Grayston drive Sandton killing three people resulted in a social media outcry which costed Murray and Roberts dearly. This was mainly because Murray and Robert had no social media presence and the misconceptions around what transpired in the collapse were never address on social media, therefore leaving an irreversible reputational damage on the company.     

Below is a brief discussion on some of the risks companies are subjected to, irrespective of whether they actively participate on social media or not.

• Fraudulent or hijacked corporate presence – individuals and competitors open bogus social media sites to dent the reputation of companies that do not have official social media platforms i.e. Twitter, Facebook etc. which  costs many companies both reputationally and financially.
• Misrepresentation of company values and policies - employees at times make reckless or inappropriate statements in their personal social media platforms which may contradict the values of the company they work for. These employees are perceived by the out side world as the ambassadors of their companies, therefore their actions should be monitored not to compromise the image of the company. Companies that fail to reprimand such employees are usually lambasted by media, civil society, political parties and other civil rights organisations which may cost them financially and sometimes result in them being insolvent.
  

• Inappropriate or unapproved use of company intellectual property (IP) - Some people or sometimes employees use company IP such as logos or trademarked material inappropriately. Failure to detect such may result in a misrepresentation of the company which affects their branding and how they are received by their customers.
  

• Introduction of viruses and malware – social media platforms presents new ways in which internal IT systems are exploited or compromised. This is because malware gets introduced through these social platforms. At times employees are victims of phishing as they are not trained on how they should identify or deal with such attempts by cyber criminals.
  

In context of these risks noted above, it is therefore imperative for companies to take a proactive stance on managing social media risks in order to realise the full value of social media. However in order to manage social media risks successfully, one needs to follow best practices to ensure a systematic approach when addressing all aspects or challenges of social media. Hence the birth of Social Media Governance which provides a comprehensive guidance on how companies can harness the power of social media. In my next blog, I am going to discuss in depth the need and expectations to implement a robust Social Media Governance program.