2011 trends: Risk management and social media ROI

We recently held our second webinar in this My.ComMetrics 2011 trend briefing series – 25 blog posts and 7 webinars.

2010-12-03 – Update – risks you take when outsourcing IT applications  using computing in a cloud – WikiLeaks, Piratenpartei Deutschland, versus Amazon

We conducted the third one:  2011 trendwatch webinar: Social media marketing and ROI, yesterday (watch video, listen to podcasts and view the slides).

Our seventh post focuses on social media, risk management and things like body scanners to improve airport security, as well as return on investment (ROI) of such measures.

A. Crisis communication – the ripple effect on social media networks

In 2010, Toyota, BP and a few other well-known brands all experienced the backlash of a social media assault of some sort. Most handled these situations with at least some degree of aplomb, if not outright arrogance (i.e. BP) or ignorance (i.e. Nestlé’s KitKat brand against Greenpeace – see point 5). Some dropped the ball (e.g., Migros) and still others decided to completely reverse a corporate decision in the face of a social media storm (e.g., Gap returns to its previous logo to satisfy a few angry Facebook visitors).

Maclaren was the first company to suffer having a major global product recall play out on social networks when an initial leak in November 2009 hinted about a children’s product’s safety issue quickly evolved into a planned recall. David Miliband, father of two small boys and at the time Britain’s foreign secretary, sent out an unusual message on Twitter, the social networking service saying, “No alarms with our Maclaren today.” Mr Miliband’s tweet was one of thousands in a week where the privately-owned company was battered by the speed of consumer communication.

Trend 1: Nestlé, KitKat and Greenpeace and others will continue battling it out on the social web, but estimating social media marketing ROI will remain difficult.

Proper risk assessment and risk management will play an increasingly important role in assessing ROI while protecting the brand in case of disaster.

Tip 1: Social media is like corporate reputation insurance. You pay premiums in the form of building relationships, by listening and responding to clients’ questions and suggestions.

Doing so is sound risk management, because it is like acquiring protection to help you when a PR disaster strikes. These people have an affinity for your personal or product brand and social media provides an existing channel to reach them (e.g., Xing or Facebook).

See our 8 guidelines for fostering social media engagement.

B. The clash between privacy, security and convenience

Unfortunately, convenience wins hands-down over security or privacy in users’ minds.

This may differ for airport security, where the public supports more security, not less (e.g., full-body scanners and controversial profiling techniques).

But security is an issue that divides people. A careful balance must be maintained between protecting social media users’ rights and privacy and giving them the feeling that big brother is always watching.

Please share your knowledge and opinions in the comments section. Also, you can get the next blog post directly in your inbox by entering your email address below and clicking subscribe.

Trend 2: The threat of users being infected by malicious code on social networks will increase markedly during 2011.

For instance, worms that set status messages via the application without the profile owner’s knowledge use a shortened link service with an infected GIF file – these will become more frequent as usage increases.

Tip 2: To avoid getting infected or having data security compromised, be cautious which shortened link you click on in a Facebook status update or tweet coming your way via Twitter.

C. Outsource in haste, repent at leisure

As the Deepwater Horizon disaster illustrates, the seemingly quick and cheap fix of outsourcing may turn out to be nothing of the sort, instead costing a bundle of money and doing great damage to your reputation.

Outsourcing IT-related activities amplifies the risk of faulty execution. For instance, mobile computing that draws on services from giant central data centers – known as cloud computing – uses methods and procedures inherently vulnerable to disruption.

You might fall for the illusion that outsourcing IT services removes the need for you to pay complete attention to a service or function that is now being provided by somebody else. The financial argument, usually made in terms of ‘cost savings’ or ‘lower head count’, was bound to win out. But the risks can be substantial and when things do go wrong as they inevitably will, the costs far outweigh the savings in most cases.

Trend 3: Discussions about the hypothetical value and real cost savings of using cloud computing will continue in 2011, but the wise will leave this discussion behind, focusing instead on better risk assessment and management.

Finding innovative solutions after carefully examining and weighing all the information and risks is key to delivering dependable services to your clients and customers.

Tip 3: In most disaster scenarios, it is not an initial catastrophic event that predetermines the outcome, but rather how the people involved react.

For instance, do they make hasty, poor decisions for a ‘quick fix’ or calmly think through and follow planned solutions such as a six-step fire drill to get a grip on an emergency.

2010-12-03 – Update – see the risk when one outsources IT work using computing in a cloud – WikiLeaks versus Amazon

Follow our 5 critical steps for reputation management.

More resources: Six steps to proper risk assessment and management, How cloud computing works, Amazon lowers prices again for S3 – cloud computing, Google street view runs afoul of German data commissioners (see Saturday).

Are you with me on these risk management and social media ROI issues for 2011 or am I completely off? What have I missed? Please leave a comment; the floor is yours!

Article source: 2011 trends: Risk management and social media ROI

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