Wednesday, December 09, 2009

Social Media Business Risks

Social Media Business Risks (2 of 3)

Social Media would seem to be affecting the way businesses view risk.

Businesses large and small appear to be participating in social media across numerous platforms without question or hesitation. The potential brand reach and return on investment appears to be blinkering many from the real risks that seem to jump out.

The social media platforms themselves disclaim themselves of liability in their terms and conditions and would rely heavily on the innocent conduit defence.

I have set out below a non-exhaustive list of the most apparent risks that are applicable to a UK business. In my previous post I explained how these risks are exaggerated as a result of Social Media Risk Multipliers.

I initially came up with 30 possible risks but have tried to distill these into general headings. I think that these risks can usefully be split into legal and strategic/commercial risks but the two, of course, are inextricably linked (please feel free to add to this list by leaving comments):

  • Contractual - Are your Social Media participators accidentally creating or varying contracts using Social Media - has this been excluded from your terms and conditions?
  • References and Testimonials - are your Social Media participators providing references or testimonials via Social Media platforms . If so what happens if these are incorrect/negligent and someone relies on them?
  • Regulated Activity - is your business regulated? - ie are required to comply with Financial Services Legalisation when using SM to promote services?
  • Product - are your SM participators making unauthorised representations or warranties about products or services that bind your business.
  • Country Specific Rules - is their legislation in other countries that you might breach if people can access your content or follow you from those countries?
  • Professional - does the use of SM breach Professional Codes of Conducts - ie for Solicitors is the person participating in SM holding themselves out as a solicitor when they are not?
  • Data Protection - when you tweet an individuals name or contact details or retweet the same or discuss one of your employees via Social Media does this comply with data protection processing obligations?
  • Criminal - are your employees discriminating via their tweets or inciting criminal behaviour?
  • Consumer Protection Legislation - does your Social Media participation fall foul of consumer protection legislation - in particular with respect to misleading advertising. Sometimes all you have is 140 characters of text so it could be easy to mislead.
  • Ownership - of the profile and the following built up by employees as part of the business - what if the employees leave?
  • Advertising - do your business tweets or other participation comply with the ASA Codes?
  • Intellectual Property Infringement- do your Tweets or other content infringe copyright or trademarks? 140 characters can still represent copyright infringement. It is quality not quantity!
  • Defamation/Privacy - are you staff defaming people or other businesses via social media platforms? Are they breaching a persons right to a privacy?
  • Breach of Terms and Conditions - Each SM Platform will have its own terms and conditions of use. Does the way your business uses that platform breach those terms?

Less my area but the obvious ones are:
  1. Brand Dilution over numerous platforms
  2. Brand degradation- how will your customers react to participation in SM
  3. Off Brand Message being disseminated
  4. Diversion of resources - SM participation is time consuming. Is it diverting resources form other useful activity?
  5. Next SM Platform Syndrome - what next. Twitter is en vogue in the US and UK but will it be the same in two years time? Will Xing acquire LinkedIn or vice versa?
  6. Profile/Brand squatting - is your business name available for a vanity url or otherwise? Did someone beat you to the name?
Given the numerous risks my big three big questions for any business participating in Social Media or putting together a Social Media Strategy are:
  1. Who are you empowering to participate in Social Media on behalf of your business and do they appreciate the risks?
  2. How do you intend to manage risks and risk multipliers?
  3. How are you going to maintain control over content and dissemination?
My next blog will consider what can be done to manage risks. Of course if a risk can be managed it is more likely that a business decision will be made to take that risk.


this site said...

Everyone has to face some risks or have to take some risks either its business or life. You have to make decisions that may be in your favor or may be not. But you have shared a wonderful blog. Great Job

superiorpapers discount said...

I am sure to keep these things in mind if I am ever thinking about using the social media as a part of advertisement. We are supposed to be aware with the consequences of everything.

Lipozene said...

Social media is running good and big businesses with the help of the power of the public. All the issues of the media have been charged for the organization of the comments and arguments on live TV.