Are businesses prepared for the risks involved in social media? According to new research by Grant Thornton, nearly half (48%) of the senior financial executives who responded to the survey feel that social media will be an important component of corporate marketing efforts going forward, but 61% of companies do not have a management plan to deal with fraud or privacy breaches via social media.
The report declares that “for many companies, social media is the proverbial double-edged sword. It offers both opportunities and risks.”
The vast majority of companies (87%) expect corporate use of social media to increase over the next 12 months, but more than three-quarters (76%) of respondent companies do not have a clearly defined social media policy, and only 27% of companies surveyed regularly review social media content.
Are companies concerned about the risks of social media? Over one-third (38%) are “concerned, but believe risks can be mitigated or avoided” while one-quarter (25%) are “aware of the risks but believe benefits far outweigh them.” Respondents also ranked five types of social media risks in order of importance (see graph).
Are companies comfortable with the safety of their information on social networks? Exactly half (50%) of survey respondents are confident that sensitive or confidential information is adequately protected on social media platforms. Only 23% are not confident of adequate protection on social media sites (the remaining 26% ‘don’t know’).
Just 3% of the companies surveyed had experienced social media fraud, 18% didn’t know, and the vast majority – 79% – had not experienced it. Among those who did experience social media fraud, the cost was under $50,000 for the majority (75%), and ranged from $50,000 to $100,000 for the remaining 25%. The two main types of social media fraud experienced were identity theft (29%) and scams (29%).
The majority of companies (54%) list the marketing/public relations department as being generally responsible for driving social media strategy and implementation.
Data results were from an online survey (conducted in August and September 2011) and in-depth follow-up interviews among senior financial executives from both public and private companies. The majority of responses came from small to midsized companies, although nearly all revenue ranges were represented, and almost all of the respondent companies were located in the United States (the remainder in Europe).
