Small Business: How Does Social Media Affect Your Business?

June 16, 2010

By Philip I. Frankel, Small-Biz Focus, May/June 2010

Regardless of whether you or company uses Social Media, it impacts your business in many ways. Once thought to be a passing fad for Generation Y, Social Media is now estimated to be the #1 activity on the Internet. Globally, the average user spends more than 5 hours every week using Social Media sites, an increase of 82% from last year. Social Media includes a wide variety of familiar sites and formats including blogs, microblogs (Twitter®), networking sites (Facebook®), video-sharing sites (YouTube®), bookmarking sites (®), news-sharing sites (Digg®), and photograph-sharing sites (Flickr®). Since your employees and your customers use Social Media, it is important that for businesses to understand how to manage and use Social Media for your benefit. Here are just a few of the many issues associated with Social Media.

Employment Decisions

Social Media is increasingly impacting employment decisions. During the hiring or promotion process many employers search Social Media profiles for more information about applicants. This could ultimately lead to the discovery of protected information and, potentially, claims of discrimination. In addition, some employers have fired existing employees based on harassing, inappropriate, or confidential information posted by that employee to Social Media sites. Since hiring or firing an employee based on Social Media conduct or content can have significant legal consequences for businesses, it is critically important to be aware of these issues.

Social Media Policies for Employees

Although most employees use some form of Social Media, few employers have created Social Media policies for their workplace. These policies govern the media's use both on and off the clock. The policies should inform employees that when using the company's systems they have no right to privacy and that when engaging with Social Media they have a duty to respect other employees, and competitors, protect the company's confidential information and intellectual property, and avoid inappropriate material. Employer's Social Media use policy must be clearly explained to your employees and be included in your employee manual.

Brand and Reputation Monitoring

Brand and reputation monitoring has always been an important business practice. The rise of Social Media, however, has made this practice more important than ever before. Although networking and content-sharing sites make it easier to discover and discuss a company's products and services, these sites also make it easier to spread negative reviews, misinformation, or falsehoods about a brand. Detecting and responding to attacks on your brand should be an essential component of your company's Social Media strategy. In addition to online sites and services that allow you to monitor your company's reputation for free, there are several companies that provide reputation management services.

Intellectual Property

While Social Media users create vast amounts of novel content every day, infringement of intellectual property is rampant in Social Media. Thousands of individuals misappropriate the trademarks and copyrighted material of others to register accounts and 'create' content. While some users simply ignore intellectual property laws, others intentionally violate them to steal the content and goodwill associated with a business's brand. It is also open to claims of libel and plagiarism. Although intellectual property law has been slow to respond to the online world, several recent developments promise to provide increased protection to businesses that detect potentially infringing activity.

The Road Ahead&

The viral nature of Social Media allows you to affordably market your business in ways that previously weren't possible. While your business can benefit from engaging Social Media, it is important to be aware of and monitor the many the many issues associated with this new medium, just a few of which are discussed above.