Social media missteps have cost organizations 10% –20% of stock value (average reduction of $1.04MM), more than $160MM in stock value, and even bankruptcy. Below are actual examples of value-related losses suffered by organizations:
Social media snafus cost a company, on average, $4.3 million, according to a survey focused on the public relations disasters, lawsuits, security breaches, and other risks. In addition, this article also sites a reduced stock price for 16% of respondents, with an average reduction of $1,038,401.
Renhe Pharmacy lost 10% of stock value and estimated a total loss of $160MM after a doctor posted misinformation in a tweet –which was retweeted by a television actor with more than 26MM followers. This is “…an illustration of the power of social media in healthcare and the significant role of doctors online. It is a painful example of what can go wrong when social media is used against a pharmaceutical brand.”
K-V Pharmaceuticals share value dropped 20% after a Facebook user protested it’s pricing. In addition, the FDA did not take enforcement act uphold the organization’s product approval. The organization filed for bankruptcy.
United Airlines stock dropped 10%, costing shareholders $180MM when a passenger’s guitar was broken and not replaced. He wrote and performed a song and posted it to YouTube –with more than 10MM views to date.
The impact of the data loss suffered by Target? “Target now expects fourth quarter 2013 adjusted EPS of $1.20 to $1.30, compared with prior guidance of $1.50 to $1.60.”
The 77-million accounts stolen from a Sony PlayStation hack cost the company 24 days of suspended service, $171MM and almost 36% of company value.
Technology can mitigate social media risks
Social media risk management technology (a.k.a. social media monitoring) is an effective way to identify what is being said about a company and its products, to analyze what is being said, and to alert appropriate personnel to risks requiring management. The collected data also can serve as predictive analytics to further identify potential areas for heightened risk efforts.
Putting an effective and impactful social media risk management technology in place can:
Protect brand reputation and stock value. Increase compliance and eliminate or reduce fines and sanctions. Safeguard against tangible and intangible losses and their resulting impact.