Social media is a cheap, easy, and relatively fun way for
organizations of all types to reach out to constituents and stakeholders...except,
of course, when it ends up costing you over $4 million in litigation costs.
A recent survey sponsored by Symantec and performed by
Applied Research has found that private companies have reported an average cost
of $4.3 million stemming from "public relations disasters, lawsuits, security
breaches, and other risks," associated with social media according to
Information Week's Brainyard blog.
The survey of organizations, all of which had over 1,000
employees, found that 28% reported damage done to their brand or a loss of customer
trust averaging a cost of over $638,000. Meanwhile 15% reported that they had
to spend an average of over $650,000 on litigation directly tied to social
media. A quarter of those surveyed claimed to have lost an average of $619,360
in revenue because of their online presence.
Of course many of those surveyed said that the costs and
risks associated with social media are far outweighed by the positive aspects
of these programs. Even if social media is looked at as a risk for these
businesses, it is also increasingly seen as an inescapable part of being a
major organization. "You could make the argument that social media has become
the Internet," Symantec's Sean Reagan told The Brainyard. "So the only way to
block social media is to block the Internet."
The survey also examined what risks associated with social
media organizations were most concerned with. A plurality found employees
sharing too much information (46%) and the loss/exposure of confidential
information (41%) were among the biggest risks. But clear majorities found that
the risk of these mishaps could be lowered by drafting a formal social media
policy (87%) and conducting employee training (86%).
As Reagan correctly noted, social media has become such an
integral part of the internet that it is nearly impossible to escape for any
organization hoping to have a relevant internet presence. Like anything else in
business, committing fully to social media means taking a plunge that carries
certain risks with it. But the potential rewards of those risks, from revenue
to brand recognition, are impossible to ignore.