RiskMarketers have increasingly emphasized the importance of social media in our ever-evolving digital marketplace. Specifically, social media has become essential for companies who are targeting younger generations.

While social media can be a highly effective engagement tool, it's crucial for business professionals to be aware of the potential business risks of social media when it is not managed well.  By becoming aware of these risks, our hope is that your Company can better leverage social media and minimize these potential problem areas.

  1. Wasting company time - Are your employees actually using social media for business marketing purposes? Or are they spending too much time chatting with friends or boosting their own personal agenda?  Many employers fear the latter, and therefore limit their employees' ability to access certain social media sites.  Clearly define the Company's social media strategy for the business, as well as the individual role that each employee plays in that strategy. This may include specifications on the recommended number of hours individuals should be spending on certain social media outlets, as it relates to the overall Company goals.
  2. Damaged brand reputation - It's always nice to receive positive feedback, but what happens when customers post negative comments about your business on social media?  While two-way dialogue can be beneficial in receiving suggestions and staying in constant communication with customers, there is no way to control what others may post.  Be aware of this, and have a plan for responding to negative feedback.  Set a goal for the Company to turn all negative feedback into a positive interaction with the client. Additionally, ensure that your company social media strategy is clearly understood by all employees – specifically those employees who will manage the company social media pages. All posts and engagement should align with the company vision and mission. One way to mitigate potential damage to your brand, is to hold social media 101 training sessions for focused groups of your employees. In the trainings, clearly communicate the company vision, give examples of social media "do's and don’ts", and explain the appropriate content to post and share.
  3. IT & data security issues - In an age of prolific technology, protecting your business's confidential information from hackers and identify theft, has become more difficult and there fore more important.  Confidential data can be lost through inappropriate personal communication of company information, computer viruses, and access of social media through mobile devices, which often circumnavigates the general entity IT controls.  Be sure your IT staff understand the risks social media can pose to your business systems and ensure documented procedures are in place to address those risks. Also, ensure your IT team stays current on information protection best practices.
  4. Potential legal Issues - As social media becomes a more commonly utilized tool in the marketing world, the risk of lawsuits related to the inappropriate use of social media will also continue to increase.  Be aware of the common legal complaints that are currently originating from the use of social media.  As a precaution, verify that your Company's insurance would cover any potential legal issues that might arise related to social media.

As with everything else in business, it is hard to achieve your goals or measure your marketing efforts without a written plan.  By creating a plan, setting specific goals, and clearly communicating to each employee their individual role, businesses can maximize the benefits of social media.  Remember to assess (and reassess!) the risks of social media and to implement controls in order to mitigate those risks.

Delap LLP is one of Portland’s largest local tax, audit, and consulting accounting firms, located in Lake Oswego, Oregon.