Social Media Policies

Facilitating any and all business transactions requires communications. Whether with customers, suppliers, shareholders, employees or entire markets the fundamental process that influences all outcomes is communications.

While the need for effective communications has not changed the methods have and the social web offers rich and robust methods waiting to be tapped. Today’s social tools offer not only improved marketing and public relations methods but value in facilitating operating processes seamlessly.

Internally employees can leverage creativity and knowledge by using social tools to share experiences or brainstorm to solve new problems. Employees can also participate in the development of new products or services. Sales and marketing resources can get equipped with tools that create greater reach and richness aimed at creating and sustaining relationships. The virtual world is a canvas for people to draw on, create, engage and collaborate at speeds never before imagined.

The social web provides many valuable attributes that businesses can use to optimize performance. Business adoption of the social web tools is gaining traction within numerous industries. There is a rush to understand the medium and how to use it to gain strategic advantages which fuel economic gains, whether expense reduction or revenue growth.

Aiming at Creating Cost Effective Impact

[i]Recognizing the limits of traditional advertising, established technology companies are diving headlong into the sometimes chaotic landscape of social media to promote their products.

Companies ranging from PC maker Dell Inc to storage equipment maker NetApp Inc are increasingly turning to outside blogs, viral videos and websites such as FaceBook, Twitter, FriendFeed and Digg — and their tens of millions of users — to reach and influence buyers.

These social networking sites harness the age-old power of the word-of-mouth recommendation and can be potent marketing tools. If nothing else, they demand a higher level of buyer engagement than conventional ads.

For tech companies with big marketing budgets, the shift to social media is an implicit acknowledgment that television and print are not necessarily the most effective ways to reach buyers, particularly as more and more people rely on the social web as a primary source of information.

In addition, with a recession looming, corporate budgets are being slashed. UBS has forecast global ad spending will fall 3.9 percent in 2009. In such an environment, social media could prove to be a cost-effective way to engage customers and prospects while indirectly creating a differential for your company.

An Examination of Risk

Many corporations are looking to turn up the volume of the conversation with their customers by encouraging employee participation in social media for business purposes. But companies are finding that their desire for reach is not without its problems. Perhaps to their horror, Corporate America is finding out that simple common sense is not quite as common as the definition suggests. As a result there is a rush to establish corporate policies to reduce risk while enabling “engagement and participation from employees, customers and suppliers”.

[ii]Mitigating the risk related to employee use of social media is best put into the context of Forrester Research’s latest report by Charlene Li, The ROI of Blogging, which has as one of its recommendations to incorporate a risk calculation in the ROI for blogs. But what are the biggest risks for corporate blogs?
Using the tags UNLIKELY, POSSIBLE and LIKELY for each risk users have designated a percentage that analyst feel is somewhat realistic. These numbers might be different for particular organization’s blog, but it gives the basic idea.

Top 10 Risks for Corporate Blogs

1. Negative Comments. Companies are often very sensitive to criticism, especially if it appears in a format that is sanctioned by them. Negative comments can be offset somewhat with a consistent and clear comment and moderation policy. Also, most readers tend to trust a site more that includes both positive and negative information. If comments are overwhelmingly negative, the company might want to use the blog to address the complaints. LIKELY (90%)

2. Loss of Control Over the Message. In most companies, the process for vetting public statements and marketing or public relations messages is controlled. A blog is a bit of a maverick, and managers see this as a risk. Of course, people may already be talking out there in the either and some companies would benefit from having an opportunity to get out their side of the story. LIKELY (75%)

3. Neglect. Starting a blog and letting it languish is a risk of blogging. The time needed to maintain a blog isn’t insignificant. LIKELY (75%)

4. Misunderstanding the Culture of the Blogosphere. Bloggers have created a culture of sorts, which if violated can lead to a backlash. This can be avoided by understanding the culture, and engaging with it before a corporate blog is launched. LIKELY (30%)

5. Unprepared or Loose-Cannon Employees. Employees that are set free to represent the company without intimate knowledge and training in the corporate culture and requirements can be a downside risk. Extensive training and guidelines for corporate bloggers is essential. Also, care needs to be taken if such an employee must be terminated, as a wrongful termination claim is also a possibility. POSSIBLE (5%)

6. Fueling a Firememe of Criticism. One of the worst nightmares of a corporate executive would be to start a blog and then have it become the genesis for a bigger reaction in the blogosphere. The Dell blog, Direct2Dell, initially weathered this kind of widespread criticism but lived on to become an influential voice for the company. POSSIBLE (10%)

7. Legal Liabilities. Aside from lawsuits, there is the law itself. Corporations must make sure a blog complies with all applicable local, national and foreign requirements for doing business. Its author must also consider things like consumer protection laws, truth in advertising provisions, and intellectual property laws (such as plagiarism). UNLIKELY (0.05%)

8. Losing the Farm. Many managers fear that the blog might be a window by which corporate privacy and trade secrets are violated, jeopardizing the protected status of such information. Hand-in-hand with this are requirements by the Securities Exchange Commission about "forward-looking statements. UNLIKELY (0.05%)

9. Negative Impact on Stock Price. What if the content or reaction to a blog posting causes an impact in stock prices? This is also a concern as it applies to securities law for publicly traded companies. UNLIKELY (0.05%)

10. Tort Lawsuits. Claims of defamation, making statements your competitors might consider trade libel and other liabilities that might arise from the content of a blog are also concerns. The fear is that the corporation might be an easy target since it has deep pockets. Also, the blog must follow all company document retention policies in case it is named in the discovery phase of a lawsuit. UNLIKELY (0.05%)

Controlling The Risk

[iii]According to Lauren Gelman, associate director of the Stanford Law School Center for Internet and Society, it's all about control. "Employers aren't happy that employees have this new ability to speak about the workplace and about their employers to the world," said Gelman. "No longer do the public relations departments have the sole avenue of communication as to what the company message is."

While companies can't control the common sense quotient of their employees, they can do something about producing blogging guidelines for their employees to follow. But these policies are only good if the employee actually reads them. Rules chock full of legalese may "feel right" to management, but do little to encourage readership of the rules they are promoting.

Social Media Directions has studied the merging landscape of managing social media within and outside the corporate walls and can provide your organization with keen insights and resolutions based on knowledge of best practices.

For more information contact jay.deragon@gmail.com

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[i] www.reuters.com/article/internetNews/idUSTRE4AH8G820081118

[ii] http://overtonecomm.blogspot.com/2007/02/top-10-risks-for-corporate-blogs.html Alysa N. Zeltzer and John E. Villafranco, Do’s and Don’t of Corporate Blogging, Law.com Jacqueline Klosek, an attorney specializing in intellectual property and privacy law, The legal risks of blogging, Network World

[iii] Elizabeth L. Fletcher is the CFO/Legal Counsel for the Society for New Communications Research and frequently writes and educates on issues found at the intersection of law and new communications. She owns Fairbanks Fletcher Law and is admitted to practice in all New York courts and at the Federal level in the Northern District of New York and the United States Tax Court. She was the founder/publisher of Rhythm and News Magazine. She blogs at blawgher.com.