Facebook is dangerous for business

Facebook can be dangerous for business.

Many organisations have rushed blindly into putting up a facebook page and engaging via Twitter without analysing the potential downside. Just like any powerful tool, facebook has to be treated with care; there are benefits but get it wrong and your organisation could lose money and reputation.

Before launching your facebook campaign consider the following:

This space is not for rent.

Facebook allows anyone freedom to create just about any group, provided it is legal and decent. Many organisations have taken advantage. They have increased their web presence and built an enviable following of loyal supporters. However, investing significant time, effort and money in third party assets could be short-sighted.

Social sites can and do shut down groups. Every facebook user has the right to report any group and many social sites take a ‘risk adverse’ approach. So, if someone complains (even without justification) that your group is misleading, you are likely to be shut down. You will not only lose reputation; you will lose you contacts and all the investment in building your group.

Policies change: what might be free today may become very expensive tomorrow. We have seen how Google mutated from a completely free service to the most powerful advertising organisation on earth. Today facebook has over 300 million subscribers and it is starting to flex its commercial muscle. We simply do not know how long commercial group pages will remain free.

Dangerous praise

Word of mouth marketing is great but again, it is not without risk. False claims made on your behalf by a well meaning but misinformed supporter could prove costly, especially if your company initiated the process. For example: if an organisation provides a product free to consumers it is potentially liable for any misleading  blog posts.


You could be forgiven for wanting to return to a simpler time; when all your advertisements were vetted by the legal department before publication!

All that lovely data

The social media business is all about data collection and consumer profiling. Knowing, on a massive scale, individual preferences, hobbies and lifestyles is a marketers dream. But it also creates risk for organisations. A successful facebook group will have thousands of followers. Create an application: a game or interactive survey and you will obtain a great deal of information about your consumers. This information not only has to be protected, it has to be collected in accordance with local data protection laws. And how often do you see a privacy statement or terms of use link on a facebook page?

That’s right. Not often.

In enthusiastically following a social media strategy organisations could be unwittingly setting themselves up for potentially expensive litigation. Organisations need to understand the sensitive nature of information that flows through social media. They should recognise the serious compliance and litigation risks that the collection and distribution of such information entails.

There are contractual tools to mitigate these risks, including properly drafted privacy policies and terms of use. A trip to your legal department will help you understand your obligations under all applicable data privacy and security laws, and help you build a nuts and bolts plan to meet those obligations.

Just because there are risks, does not mean you should not do it

Social media is the marketing phenomenon of the new millennia. It provides great opportunities to really understand customers on an individual basis and to engage in deep and meaningful dialogue. It has already started to revolutionise industry and the genie cannot be put back into the bottle. Organisations looking to benefit from the medium can, provided they treat social media with the respect it deserves.

11 Responses to “Facebook is dangerous for business”

  • This is a minefield. Do you have any links to cases in the states where some of these issues have been tested?

  • Social websites interfere with work time. They contain alot of useless irrelevant information but can take hours to troll through. Seldom does this equate to money saved. Quite simply the genie that has escaped out of the bottle is an excuse for non productivity for many individuals, and therefore has little benefit to “profit” but a great benefit to “loss”. It should be confined to leisure time and never in the office.

  • Excuse me, but I must heartily disagree. Shall we jettison our adventures and amazing discoveries via internet tools in favor of laws that were built in different times for different cultures? Shall we spoil the awesome creativity and ambition of the web because someone might bring a lawsuit?

    It’s true that the contacts you build on FB remain in FB. Unless, that is, you use the tools properly and re-direct your FB Fans to your own bit of cyber-space as quickly as possible.

    Nothing online has to be a liability, unless ineptitude and or greed make it so.

  • Sangeetha Narasimhan:

    I have read in one of the recent issues of The Economist that managers were against the use of MS Excel on the grounds that employees might use it to make shopping lists and make a league table of football teams…can any company survive without Excel today? Think the skepticism around social media is just the same. Embracing it early on in a sensible manner will actually improve a company’s reputation and provide better customer touchpoints.

    Every medium including direct mail has the risk of litigation. As the article finally concludes, we just need to be aware of the risk-but not be averse to embracing the change.

  • MJ:

    @ Andrew Archard I get all my information from social network sites such as Twitter & Facebook. Updates from companies that offer a lot of creative information through these sources. I.e. Smashing Magazine on Twitter updates + all skills I have I got through the internet & following tutorials which I also got through the social network sites, so it’s definitely not a waste of time.

  • Mark:

    The benefits of social networking far outweigh any potential risks. Just make sure risk assessment is part of your social media strategy.

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  • Interesting article i totally agree with the comments above. Keep writing

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