Social poses significant risks to participating companies

When the Altimeter Group asked risk management professionals, including social media managers, lawyers and compliance officers, which social sites were riskiest to their business, those with the broadest reached ranked in the top three.

Of the professionals involved in the study:

61% cited Facebook as the riskiest;
60% cited Twitter;
43% cited YouTube;
10% cited third-party blogs and blog comments;
8% cited company blog and blog comments;
8% cited LinkedIn.

Companies said they were most at risk from damaging their brand reputation via social sites, cited by two-thirds (66%) of participants. An inappropriate joke or comment, or an unresolved complaint left hanging on a Facebook Page's wall, can have damaging consequences. The next biggest concern cited was the release of "other confidential information", which 32% of respondents said was a 'significant' or 'critical' risk, followed by a loss of intellectual property (28%).

"To safeguard brand reputation, protect information and intellectual property, and mitigate legal actions, organizations need to be more proactive about managing social media risk," writes report co-author Alan Webber on the Altimeter blog. "We found that to set up an effective social media risk management process, organizations need to focus on the IAME loop:

1) Identifying social media risks;
2) Assessing and prioritizing those risks against limited resources;
3) Mitigate and manage those risks to reduce the impact on the organization; and
4) Evaluate emerging risk against mitigation efforts."

Tags: brand marketing, brand reputation, intellectual property, reputation management, risk management, social marketing, social media