Did you know that a company loses an average of $3.5 million from one social media incident? Here is the breakdown: direct financial costs ($641K), reputation damage ($638K), lost revenue ($619K), reduction in stock price ($1M) and litigation costs ($650K). You can read more details behind these numbers in our whitepaper by David Houlihan, Principal Analyst with Blue Hill Research, “The Foundations Of Social Media Risk Management.” The paper covers four prominent areas of social media risk (disclosure, discourse, conflict of interest and fraud), as well as the average financial impact that a social media faux pas has on a company. I’m willing to bet that the companies below were unaware of the financial impact of a social media mistake, or they may have taken further measures; perhaps they would have updated or clarified their social media policies, required more in-depth, interactive social media compliance training or conducted a social media risk assessments to put them in better positions to mitigate their risk.
Blue Hill in the News: The Cost of Poor Social Media Compliance Training? $3.5 Million
Posted on December 30, 2014 by David Houlihan, Esq.