Social media and networking have become a part of life. But what is their role in the business environment and how can businesses benefit from having a presence, while limiting the downside?

Much has been written about the role of social media during the recent riots in England, blaming networking sites such as Facebook and Twitter for fuelling the unrest. For today’s younger generation social networking is a fact of life – information is shared and disseminated quickly – sometimes with bad intensions, but more often with good. Social media and phone messaging may have aided the rioters, but it also mobilised the clean-up in the days following the chaos.

With social media so prevalent in today’s society, businesses are rightly exploring how they can better use this space to communicate with stakeholders. A recent study carried out by Burson-Marsteller found that 79 per cent of the largest 100 companies in the Fortune Global 500 index are using at least one social media platform such as Twitter, Facebook, LinkedIn, YouTube or corporate blogs – with Twitter as the clear leader.
Many believe social networking could be the preferred way of doing business in future, perhaps even replacing the telephone and email. And it could play a role in attracting and retaining talent among a generation who have become used to using it for communication. However, as with any evolving technology, social media also introduces new risks.

“Many companies now use social media as a form of advertising and with this increased use comes greater exposures,” says Iain Ainslie, technology and cyber liability underwriter at ACE European Group. “The content on a company’s web pages, whether on a company website or a social media site is associated with the company. Where a company may have strict controls around the publication of content on its website can the same be said for a social media page?

“The added exposure can come from the ability of the public to leave comment on a social media site without that content passing through the internal checks,” he continues. “Members of staff can also leave comments which can be problematic should a staff member be disgruntled with the company, his/her boss, or a colleague. This area falls under the media element of cyber insurance policies and is often excluded due to the use of non-mediated content.”

The main exposure for any business is that of content. Rumours, malicious gossip, poor product reviews and even an insensitive comment – poorly timed – can have an immediate and sometimes catastrophic impact on an organisation’s brand and reputation.
As David Meerman-Scott, a viral marketing strategist, rightly points out, social media “differs from the so called ‘mainstream media’ in that anyone can create, comment on, and add to social media content.”

“It is very difficult to stay on top of content shared through Twitter as the spread of information is now so fast and outside the control of the organisation,” says Ainslie. “Staying on top of the information flow is difficult enough but having an influence over the content is almost impossible – as was shown with recent leaks that even the courts could not contain.”

For businesses in the social age, many are now cottoning onto the fact that while social media is another platform from which they can reach their customer base, more crucially they can better monitor what is being said about them. “I firmly believe if a business isn’t where their customers are at they are making a mistake,” says Elaine Heyworth, a senior risk manager. “So if their customers are young mobile Tweeters, as they call them, or if they’re on Facebook, the company should have an exposure there.

“They should if nothing else be monitoring what people are saying,” she adds. “People are more honest on Twitter or Facebook than they will be in a call to a contact centre. Things can be said on Twitter that can really expose you. They can put a hash tag by your name and before you know it, you’re trending and you don’t know anything about it if you’re not there listening.”

Sometimes the source of a PR nightmare comes from the very heart of an organisation. Take fashion designer Kenneth Cole earlier this year. During Egypt’s pro-democracy revolution earlier this year he tweeted, “Millions are in uproar in #Cairo. Rumor is they heard our new spring collection is available online…” Twitter users were quick to denounce his comment as “in bad taste” and he quickly apologised, but the damage had been done.

“It’s a whole new culture of how to communicate,” says Heyworth. “You don’t want to go slagging off your boss – particularly if you’re connected to him. I’ve never connected to anyone I work with – I only start connecting to them once I leave a job. I think [people] should be careful of what they’re [posting] and be more aware of the privacy options.”

Through sites such as Twitter everyone can be a critic – retweeting negative stories they have heard – rarely checking the truthfulness of the original source. Even worse, stories told through social media are often picked up by the mainstream press, and printed as fact.

This can be disastrous from a brand management perspective. “It takes an organisation a number of years to build a brand and to get a strong and robust reputation. However, it can take only a matter of minutes to destroy that brand,” says Mick Scott, Deloitte’s UK cyber threat intelligence leader. The impact can also vary according to the particular sector the brand belongs to.

“With any communication, internally or outside an organisation, it needs to be aligned with the business objectives and the culture of the company,” he adds. “Any message from an organisation needs to manage the negative effects, but also use that opportunity to show that it’s responsible and doing the correct thing.”

The public relations universe is littered with cautionary tales – companies that failed to manage negative press with a long-lasting and damaging impact. From Exxon Valdez’s example of poor crisis management in 1989 (a lesson some would argue had not been learnt by BP when it faced the Deepwater Horizon incident a year ago) to Coca Cola’s “mass hysteria” case in Belgium, and the more recent phone hacking scandal at News Corporation (International), a company which has lost 14 per cent of the value of its share price since the crisis began.

“There are tools that have been developed which can be partnered with indexing type software to search for information that’s relevant to a company’s brand,” says Scott. “Organisations can use this technology to find out what’s being said about them on the internet. There are some companies in certain sectors that are very keen to know what their resellers are saying or what people are saying about their product – to make sure it’s being resold in an appropriate and professional manner. If there is negative feedback on their product, they want to know about it.”

According to research carried out by PR firm Weber Shandwick which surveyed 950 global business leaders, the time estimated to fully recover from a damaged reputation is 3.5 years. The results of Safeguarding Reputation suggest the best steps to beginning the reputation recovery process are announcing specific actions the company will take to fix the problem (76 per cent), creating an early warning system (76 per cent) and establishing procedures and policies the company will following to demonstrate its commitment to being a responsible citizen (73 per cent).

It does not recommend responding to bloggers post-crisis. “Perhaps business decision-makers around the globe believe that companies should concentrate on fixing the problem and understanding what went wrong before turning their attention to correcting online conversations,” said Dr. Leslie Gaines-Ross, Weber Shandwick’s chief reputation strategist. “This is not surprising since our research also reveals that only a minority of companies pay attention to online coverage.”

Time wasters

Of course the other downside to social media is that it can be addictive, with countless man-hours lost as employees check their messages, information boards and status updates. Firms need to have a clear policy when it comes to social networking, including how much time should be spent on social media sites in any given work day.

“Many organisations have a very clear policy with how they allow their people to interact with social media or they deny people access to social media via corporate networks,” says Scott. “But, obviously, with smartphones and BlackBerrys, people can continue to use social media sites whilst at work to communicate.”

In these times of austerity, getting caught quaffing too much champagne can also be a recipe for disaster. “How organisations train and make their people aware of social media is also important,” adds Scott. “For instance, a picture of a fun ‘knees-up’ at a Christmas do that is then placed on a social media site can actually affect the brand of an organisation. Should a client of the business see these photos online, and then consider them to be inappropriate, this could potentially hinder a firm’s reputation.”

Share Story: