December 2013 – UPDATE:
Pharmaceutical companies have a fairly unique problem when it comes to social media. Like financial services companies (insurance agencies, banks, investment firms, etc.), pharmaceutical firms have to follow strict compliance guidelines in their social messages, or else risk punishment from regulatory bodies. Unlike the financial services industry, though, Big Pharmaceutical doesn’t have a set list of guidelines to follow. The Food and Drug Administration (FDA) can fine pharmaceutical companies if they misuse social media, yet they haven’t really set forth any clear social media guidelines for those companies to follow.
Sure is a tricky situation.
And on second thought, maybe it’s not so unique after all. If you manage the social media for a shoe store, or a delivery service, or a bakery, or a design firm, or a theater, or any number of companies, you don’t have government agencies telling you what you can and can’t post to Facebook, but you also don’t have free license to just post whatever the heck you want. You don’t need a regulatory agency to tell you that posting curse words, tasteless jokes, insensitive posts, misspelled words, and poor grammar to your company’s social networks is a bad idea. All of these can all land you in hot water with your boss, and maybe even the company’s Board of Directors.
But fear not! Whether you work in pharmaceuticals or for a company that has internal, self-imposed social media guidelines, there are steps you can take to make sure your (and your team’s) social media posts are always compliant.
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Earlier this year, the CFO for Francesca’s Holdings, a retail clothing company, tweeted, “Board meeting.Good numbers=Happy Board,” and in doing so violated SEC regulations regarding fair disclosure. He was fired on the next business day.
In March of 2011, a social media representative at New Media Strategies, a social media marketing agency, who was handling Chrysler’s Twitter account accidentally posted a tweet to @ChryslerAutos that was actually meant for his own, personal account. The tweet read, “I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to [expletive deleted] drive.” The representative was fired from New Media Strategies, NMS was taken off the Chrysler account, and Chrysler found itself scrambling to engage in damage control.
And in July of this year, Celeb Boutique, a fashion company, saw that #Aurora was trending on Twitter and decided to take advantage of the trend by tweeting, “#Aurora is trending, clearly about our Kim K inspired #Aurora dress ;)” with a link to the company’s online store. What they didn’t realize, of course, is that the reason #Aurora was trending was because of the tragic incident that occurred at the Aurora Century movie theater during the midnight showing of The Dark Knight Rises. Understandably, the backlash was instantaneous and extremely damaging.
These are just a few examples of companies and representatives that have suffered the potential pitfalls of social media. They are by no means alone. In the past few years, we’ve seen similar stories from American Red Cross, McDonald’s, former Representative Anthony Weiner, Gilbert Gottfried, and many, many more. Social media snafus happen every day. They’re usually embarrassing, and although they sometimes go by unnoticed, they can also be incredibly damaging, to corporate brands and personal careers alike.
There’s just no way around it; social media can be scary.
Social media has taken the world by storm over the last several years, but when it comes to corporate usage, there are some industries that have been a little reluctant to embrace networks like Facebook and Twitter. Chief among them are the financial services providers. The reluctance of investment brokers, lenders, insurance companies, and credit unions to tackle social media head-on is due largely to the need for industry compliance. Regulatory agencies like the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) hold brokers responsible for following strict communications regulations and hand out severe penalties for non-compliance, so it’s not hard to see why many of these companies have deemed social media more trouble than they’re worth.
But with the growing importance of social networks, financial services institutions can’t afford to avoid Facebook and Twitter and still hope to thrive in an ever more digital marketplace. So the question is, how can companies like Gremln help brokers navigate the compliance minefield of social networks?
First, let’s examine what exactly is it about social networking that poses a potential threat to financial services.
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