3 reasons why you can’t avoid social media (even if you wanted to)
Even if you want to avoid social media you can’t. Its pervasiveness and power to reach global audiences instantly creates dramatic impacts.
Here are 3 reasons you can’t ignore it.
1. You can be drawn in
If you are a brand you’re already involved.
I could pick any number of examples to illustrate the point, here’s one.
Remember in 2012 when advertising was suspended on 2GB after Australian radio host Alan Jones said then Prime Minister Julia Gillard’s father died in shame?
Although Jones later apologised, many said the gesture was underwhelming and coalesced online, pressuring advertisers to withdraw support.
Many did, including Mercedes-Benz Hornsby, Woolworths, Freedom Furniture, Lexus of Parramatta, Coles, ING, Bing Lee, Mazda, 7-Eleven, Sydney Symphony Orchestra, and HCF, costing 2GB up to $80,000 per day. These businesses announced the decision online, mostly via Twitter.
Inadvertently brands became associated with a statement they did not make, but which contradicted their own or customers’ values. Those companies that did not withdraw advertising came under pressure to explain publicly.
None of these businesses woke up expecting to have to pull advertising or justify their marketing approach. This is the speed and impact of connected communication.
– Do you have a plan for how you would respond to a similar incident?
– Has your Board or executive got a policy on when you would and would not withdraw advertising support?
– Where would you announce the decisions to your customers?
2. People in your organisation use it
From bottom to top, people at work use social media.
In 2012 Melbourne Victory, Melbourne Rebels, and Melbourne Demons all dumped major sponsor, Energy Watch, after its then CEO Ben Pollis posted a string of racist, sexist, and bigoted messages on his personal Facebook page. Although he claimed these were private jokes, they were of course, public.
The Boards of the various sporting clubs met immediately and quickly terminated sponsorships, as did other businesses like Momentum Energy and TruEnergy who were using the energy broker. These were not trivial matters. For the Demons alone, the deal was worth around $6 million over three years. The energy companies lost money, the CEO was forced to resign, the company went into administration, and employees lost their entitlements.
In Canada a man lost his job when he used Twitter to try to score marijuana. He tweeted: “Any dealers in Vaughan wanna make a 20sac chop? Come to Keele/Langstaff Mr. Lube, need a spliff.” Police who saw the tweet shared it with the added comment “Awesome! Can we come too?” The tweet quickly received 3,710 re-tweets and 2,456 “favourites”. Because there was no crime, no charges were laid but police did inform his employer, who subsequently fired him.
The outtake is simple – social media is a publishing platform and you’re a publisher, responsible for what you say. Because business impacts can be dramatic, they must be managed.
– Do you have a social media policy?
– How is it communicated and are staff trained?
– What are the rules for personal vs. professional use?
3. The law says so
The impacts of a channel that is ubiquitous are ubiquitous. Because social media can directly impact the market, it has to be integrated into strategy, governance, and risk.
In 2013 US stocks plunged temporarily when an announcement about a bomb at the Whitehouse was made via the Associated Press Twitter account, which had been hacked.
Quick action by Twitter (which suspended the account) and AP meant the account was taken offline within minutes but the tweet had already been shared over 3,000 times. The AP immediately confirmed the news was not true but the Dow Jones plunged 120 points within a couple of minutes and reached 143 points down before recovering. Subsequent reports suggest over $20 billion worth of stock changed hands during the brief trading hiccup. In a world of automated financial triggers, that’s worrying.
In January 2013 in Australia the share price of Whitehaven Coal dropped six percent after a fake press release lit up Twitter. The release claimed to be from the ANZ bank overturning a recent loan that would have had a significant impact on its Maules Creek project. The hoax was confirmed but not before $314 million was wiped off the share price and the company was placed in a trading halt.
While market rumours are nothing new, social media means information (true or false) can reach people – shareholders, the media, regulators – faster than a company knows what has happened.
The Australian Stock Exchange updated its guidance on disclosure in 2013 stating company secretaries should consider impacts with respect to risk. The ASX said it did not expect companies to monitor every single comment, only for market sensitive information, material transactions, and market speculation. The Australian Competition and Consumer Commission (ACCC) has said all businesses should monitor platforms and have 24 hours (or longer for small businesses) to act on misleading information. Businesses are responsible for comments made by others on their sites.
1. Is your Board, company secretary, and executive aware of ASX Guidance Note 8? What reports do they ask for?
2. Do you have social media monitoring in place? What reports to you generate? How do you communicate them?
3. How is social media opportunity and risk integrated into business strategy and governance?
Why do you have to pay attention to social media?
It impacts every area of life and with predictions the audience will reach 2.55 billion by 2017, the impacts are set to increase.
Your Directors and C-suites should be able to answer every one of the questions above. If they can’t and you’re reading this, then you probably have a role in driving that conversation. You might want to send them this.
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