Social Media: Reap the Rewards While Avoiding the Pitfalls

By: Jeffrey D. Peterson

Facebook, Twitter, Linkedin and other social media sites are becoming standard tools for businesses to market their services and communicate with their customers. Social media sites can be powerful tools for companies to promote their brands, provide word-of-mouth marketing, and allowing direct communication between the company and its customers. While social media sites provide many potential benefits, they also come with associated risks that companies should be prepared to identify and manage.

The first thing a company should be aware of is to make sure its specific social media pages are compliant with the terms of use and privacy policies of the social media providers that govern the use of the site. Most social media sites have prohibitions against posting material which infringes the intellectual property of others, defamatory material or material posted by minors. Companies should make sure that its own postings and materials posted on such sites are compliant with these terms. Companies should monitor usage on social media platforms, especially when customers are allowed to post to the company’s social media pages, to insure that the customer is also complying with the terms of usage. Additionally, monitoring of the company’s social media pages should be done to examine if any posts contain defamatory or negative statements about the company on the page.

Another pitfall to be aware of are testimonials and endorsements a company may use or post on their social media site. The Federal Trade Commission has indicated that companies are subject to liability for failing to make material disclosures relating to any endorsement relationship between an endorser or testimonial and the company. Therefore, if the endorsements or testimonials on a social website are in some way controlled or sponsored by the company this relationship needs to be disclosed.

Another area in social media that companies must be vigilant of is the social media activities of the employees of the company. Apart from simple efficiency losses, due to personal use of social media by employees during work hours, companies should be vigilant about possible leaks of confidential or proprietary information by their employees about company practices, policies and plans on these websites.

A helpful tool for companies to manage their usage of social media, is to develop a social media policy for the business. The social media policy should serve a number of functions. First, it should provide guidelines on how and what type of material the company should distribute on the different social media sites. Secondly, it should provide a monitoring protocol for the social media sites of a company to make sure that the sites are in compliance with the terms and conditions of the site providers, and that the third-party material posted to the sites are also in compliance. Thirdly, the policy should have an action protocol in place for dealing with non-compliant posts of third parties on the social media sites, including a simple request from that can be sent to the social media hosts to take down any non-compliant posts, and canned statements to the users of such sites addressing such non-compliant activity (such as defamatory statements or use of infringing intellectual property). Fourthly, a company should have a protocol in place for dealing with harmful statements made about the company or its products on the website. Fifthly, a company should have policies on its employee’s use of social media sites in relation to company information to protect against the inadvertent release of confidential information

By developing a social media policy and how a company handles its own social media, monitors the social media of others with respect to its company and how its employees deal with social media, a company can manage and avoid all the pitfalls associated with social media activities.


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