The Collateral Damage to Business From a Social Media Crisis

Most discussions and case studies around social media crises faced by companies is focused on consumer reaction – and direct loss of sales or brand impact. While these are critical, a non-consumer focused company may think they are more immune to these issues and a consumer product company may think the damage is relagated to the consumer segment, not their business to business side. This can be a dangerous assumption. We look at some of the collateral, perhaps harder to measure, damage that can occur.

Mistake Number One: Many companies who only sell business-to-business (B2B) assume that social media is all about consumers and that they are immune to damage. This is a fatal error. Many industries have niche social networks, forums, blogs, Twitter accounts, where industry news is discussed. Failure to understand this can cause significant problems.

Risk From Government Contracts
If a business also sells to governments, contracts may be lost. Depending on the severity of the issue, such as legal actions being talked about or happening, government agencies may be reluctant to buy products or services from a business they feel may be distracted from a contract or unable to fulfil it. It is hard to know if this happens. Some indicators may help determine the risk however.

Competitor Leverage
The bigger the story via social media (whether general sites or industry-focused channels) the more a competitor can cause harm. Employees can quickly and easily share information, this means relying on stories only being in major news media is dangerous. Competitors can shape perceptions with existing clients of yours and use it to foster perceptions of inability to complete work and more.

Every Industry Has Social Media Channels
We’ve conducted research and analysis on many industries. There is always some engagement by people in the industry in specialized niche networks, Facebook groups, LinkedIn discussions, FastPitch, eCademy, forums and newsgroups. Whether or not a CEO or senior executive is aware or participating in them doesn’t matter – employees are. Including from competitors. And they share information. A lot.

Board Perceptions & Risks
If it is a public company or just has a board and a smaller set of investors, once word trickles out, problems of governance come into play. A board or set of shareholders, may feel management has lost control of the company or are nervous of the management teams ability to contain and deal with the issue. If it is a major shareholder or board officer who raises awareness of an issue to management, they may feel management is not suitably aware of industry issues. There is then the possibility of a fractious board, a senior management battle and so on…

Investment Challenges
Companies looking to raise capital from equity sources or even debt, may find themselves in a challenging place if a negative story has reached the ears of those in the financial sector whom they are courting. If financiers perceive problem or potential escalation, they may either require more security or stall on a deal.

Supplier Fears
Suppliers of services or materials to a company who are tuned into the industry networks (often, they are more connected into online channels than the buyer of their product) may be concerned with the company’s ability to surface from a crisis. If they have extended credit, they may retract that credit or require new terms or demand outstanding payment to mitigate increased fears of risk.

Perception Can Rule The Day
The reality of these challenges are ones that businesses are just beginning to grasp.  Since these issues are  beyond just reputation management and are not as quantifiable being more qualitative in nature. It is not as easy as seeing immediate sales losses or a series of negative “tweets” on Twitter. Often, senior management is unaware of the social media tools being used in their industry. Monitoring tools rarely, if ever, pick these up because they are focused a) on mainstream social media channels for consumers, b) more business-to-consumer than B2B and c) perform poorly with smaller data sets to display.

We live in a world where perception can quickly become the reality. And that can spread across far more than just the consumer market and into supplier networks, financial sector and shareholders.

A Whole New Set of Headaches
All of this to say, the CEO and executive management of a company today have a whole new set of risks to manage. In some cases, they may not even realise an issue escalated as the result of a forum discussion or blog posting. Some research into these deep Web sources (where social media monitoring or reputation management tools simply do not go) can help a) understand the issue and b) help address the issue and give management the opportunity to mitigate risks and deflect the damage quickly.

Atlantic Conversations 4: Social Media in Atlantic Canada

We’re delighted to be releasing our 4th annual report on social media use in Atlantic Canada – the “Atlantic Conversations IV” report that was launched at Podcamp Halifax on January 22nd, 2012. We thank the largest number of attendees ever to the event and hope this information is helpful to clients and anyone else interested.

Click on the hyper-link to download the free PDF with analysis: AtlanticConvo4-Badger 2011.

Key Findings:
Our key findings in 2011 were as follows;

- When it comes to youth, the place to connect with them is on Tumblr and the best creative is video

- For adults, while Facebook remains popular, the trend is for people engaging more in “niche” social networks on platforms like Ning for their hobbies and interests.

- For use of social media apps on Smartphones, it’s the 30-39 age bracket that uses them more than youth. This was a surprise.

- Nova Scotia continues to lead overall use of social media in the four Atlantic provinces, but New Brunswick is catching up quickly.

- LinkedIn was the social network that grew the most over 2010 for businesses.

- Businesses continue to have low engagement in social media. In 2012 this could cost them revenues as consumers increasingly look to discuss regional brands and services.

- The “buy local” trend of discussions and consumers recommending grew and it expected to become ever more important in 2012.

- Governments both provincially and municipally are increasing their presence but it is slow. Nova Scotia government leads the way of the four provinces, but their engagement is faced with the challenges of complexity, available resources and ensuring protection of privacy with regard to individuals.

- When it comes to consumers or citizens engaging with brands and government – they want authenticity and to feel a real person is engaging with them in an authentic way to build trust. Standard “spin” lines are likely to cause friction.

A more detailed version of the report is available for CAD$995.00 and can be requested by emailing or calling us. We ask that if you use the content herein that you provide attribution and respect the Creative Commons license. The presentation made at Podcamp Halifax can be found on Slideshare at this link.

- The MediaBadger Team

Industrial Espionage & Social Media

Most companies are concerned with cyber threats such as hacks, viruses, malware and denial of service attacks. Yet a new threat to industry comes from social media or social networking services. That is industrial espionage by a) recruitment of employees to buy secrets or b) monitoring of employees engaged in social media to gain insights into what is happening and c) moles as employees using social media to engage employees or transmit intelligence. We take a quick look at these threats;

1. Employee Recruitment: Sounds like cold war style stuff doesn’t it? Fact is, it happens and is happening. Someone makes “friends” via a social networking connection and over time builds a trust relationship with that person. The end-goal being to get key information from that employee. The agent doing the recruiting may be a State employee working for an intelligence department or it may be a competitor who has staff that do this (usually former police or intelligence officers) or retain a third party.

2. Monitoring for Social Network Intelligence: Using data mining tools, social media monitoring services or through manual research and assessment, a competitive company or government looks for keywords and small bits of information. This is intelligence that can be used to assess corporate activities like moving into a new market, taking over another company or product information. Employees who use services like Twitter, blogs or Facebook may not even realize the damage they can cause through sharing information – what they think is an innocent comment, connected by a trained analyst can draw a bigger picture for a competitor.

3. Employee Moles: A government or competitor may insert an employee into a company in a department where they may be able to steal corporate secrets such as software, product plans, financial information etc. This is a challenge for companies and depends on their security procedures and perceived level of threat. This is a fairly common practice however and companies can have difficulty in Canada, US, EU and UK with regards to how much they can dig into a persons background or ask for information. Nor can a company dictate what a person does outside work hours, such as being on Facebook or using Twitter.

The Occupy Movement & Social Media

The use of social media technologies to create awareness and organise protests and “camp-ins” last year (and some continue today) was the first time these tools were used on an international scale. This is unprecedented in the history of mankind, at such speed and with incredibly well organised precision. As the Occupy protests lengthened, most often, it would seem, those protestors featured by many news media channels were the down-and-out, hippies and young students disenfranchised. Stories of partying, drugs and alcohol seemed the perfect fodder. But were they? Are they? We did some digging to analyse just who is online and who makes up the Occupy movement. What we found was not what we thought we would find.

Forget About Youth In Occupy Movement – The Demographics
It wasn’t just a bunch of university students. In fact, as we analysed the age groups, we found the average age to actually be 36. We also found that across the 5,000 profiles and commentaries we looked at, over 50% had a university education. We also found they weren’t poor either. Perhaps the “working poor” – yes. We estimate an average income of about $45,000CAD from  USA, Canada and UK. We suspect this median would hold up in many other countries as well. Certainly there were those who are on the margin of society and the students or youth movement. But they do not represent the majority. Involved were doctors, lawyers, entrepreneurs.

Nor was there racial or religious divide. All forms of faith and races were represented as were men and women.

It’s Not A Union Driven Thing
That unions played a key part there is no doubt. Unions have and likely will continue to, play a key role. But unions, mentions of unions and references to union messages we estimate were less than 10% of the overall social media engagement. The Occupy movement is not owned or being driven by unions. The unions help in rallying and organising but it is being driven not by any one organisation. It is truly driven by the average citizen.

Activist Groups & Agitators
While some may suspect underlying activist groups with more radical agendas, this doesn’t appear to be the case. We found little evidence of more fringe, radical activist groups. The organisations that support the Occupy Movement are more socially oriented, those that are necessary in a functioning democratic society.

Our Summary Conclusion
While we haven’t provided all the detail of our research here, we can quickly surmise that the Occupy Movement is international in nature, it is still active and likely to become increasingly more organised. What started out in anger and protest with no  defined agenda has developed an agenda and is refining that agenda. This is truly a movement more of the disenfranchised middle class who are also looking to the margins of society to help them as well.

Our forecast is that we will see increased Occupy activity and a clearer agenda form. There will likely be “fractioning” of the movement, if it can be said to be organised enough for there to be fractions occurring. Even the thought leaders of Davos have realized this is a serious societal issue of significant scale across multiple countries. We suspect the Occupy Movement to be a significant indicator towards a demand for greater change within current political systems.

Why Social Media Really Works in Civil Actions

Issues for protest or causing some form of unrest aside, the real reason social media tools have been a key technology in driving significant societal changes comes down to one reason we propose – lowered individual risk and group comfort. One person protesting in front of city hall is unlikely to cause a change. You need a lot of people. Our research into Keystone XL and the use of social media by civil society groups showed how now even groups can connect with other groups to take action on issues.

Herd Mentality
The truth is that we as humans prefer to act in groups. We have to. One person alone cannot build an office tower. When we see others gathering, we are more likely to join in when we share that groups values, ideas, opinions or vision.

Social Media Shows Commitment
Look at a Facebook group page on an issue of society, a celebrity or brand. If one group has thousands of followers we assume that group is generally more popular. A group page with just a few members isn’t as compelling. We’ll go for the group with more people – in general. An individual will go where there’s the perception of others with similar views. As social media tools thrive on high volumes of users, require little to know technical skills and are available through mobile devices as well, a person can quickly see when something is becoming popular. When we see others are committed, we’re more likely to commit.

Digital Mob Mentality
When an issue takes off, like #Occupy, Egyptian revolution or the London riots of 2011, people go into what we term Digital Mob Mentality. They are fast to comment and quick to share with their peer networks. This becomes a feeding frenzy of information. Coordination is quick, communication is essentially at zero cost and there is no friction. To those that suggest “slacktivism” takes place, yes, to some degree. But as the above events and many others show, the slacktivists are far less than those who can and do actively participate in the issue.

Hyper-Momentum & Networks
Because of the significant increases in the use of mobile data devices (SmartPhones and Tablets) and the easy access to social media technologies over increasingly higher bandwidth networks, an issue gains what we call hyper-momentum. The story spreads fast and furious. Far faster than ever before in human history. No one has to wait for mail to arrive or has to be at home to take the phone call. And every one of us has social networks of friends, family, co-workers etc. And we trust news and actions of friends very quickly. More so than official government communications. In several research projects we’ve done for governments around the use of social media in both natural and man-made disasters, we see a greater reliance on information passed through social networks or the social graph than that coming from government (including policing and fire services.)

In Summary
When we see other people taking part in something we are curious. Whenever we see a crowd, we are curious as to what has drawn other peoples attention. These behaviours are simply translated to online services through social media. The more we see others with a similar view are committed to an action, the more likely we are to participate. It’s as simple as that. And we have plenty of evidence.