Over recent years, social media have become an essential marketing instrument. The efficient use of social media in a business environment is crucial to the productivity and viability of an enterprise. Hajli and Sims have demonstrated that social interaction influences purchasing behavior and overall commercial intention of buyers (355). Rating a commercial system, as well as reviewing and recommending it among peers is a widespread practice.
Thus, social participation in commercial structures is closely tied to a company’s marketing strategy. However, a social network of a commercial character demands an advanced IT security system that allows for developing an efficient IT defense (Ponemon 7). Thus, while social media offer an array of promising opportunities for increasing a company’s productivity, it can also be a source of difficulties and can hurt an enterprise.
Negative Impact 1
The impact of the perverse halo effect can be rather serious regarding the brand image, as it can occur across rival brands in a recall environment. A peer-reviewed report written by Abhishek and Tellis and published in the Journal of Marketing Research provides valid research-based evidence. The purpose of their study consisted in demonstrating the halo impact on sales and stock market performance (Abhishek and Tellis 149).
The descriptive results were obtained by conducting a disaggregate analysis. The results of the mentioned study show that an average monthly sales loss of 3.8 million can be caused by concerns about a rival brand (focal nameplate) increasing by 1%. A 1-day wear-in period of the perverse halo was registered, as well as a 6-days wear-out period (Abhishek and Tellis 157). Moreover, online chatter can lead to negative impacts on downstream sales intensified 4.5 times.
It is indicated by the authors that to minimize the negative effects of perverse halo, social media management must participate in a dialogue via their site to address these concerns. Problems related to recall require taking certain measures to avoid a spillover crisis of an enterprise. Information regarding the recall should be gathered consistently regularly to reduce the risks involved.
Negative Impact 2
The use of social media in a business environment makes a company vulnerable to certain IT security risks. It is crucial to address the issue of IT defense, including the defense against hackers and identity theft. Study results discussed below come from a peer-reviewed article published by Ponemon Institute, which is devoted to conducting independent research of sales management and IT security problems. The evidence comes from census data and surveys. The purpose of the study consisted of exploring various kinds of disruptive technologies and their impact on the productivity and security systems of an enterprise. Six hundred and fourteen survey respondents are reported to have 11 years of prior experience in the researched field (Ponemon Institute 1).
The results of the study indicate that the majority of respondents consider a cyber-attack to be likely. It was determined that there exist the necessary strategies and procedures aimed at IT security improvement, but the essential technological defense systems are often unavailable (Ponemon Institute 3). A lack of necessary technological solutions was indicated by 53 percent of respondents.
It is crucial to acknowledge a high likelihood of cyber-risks in case the social media tools are employed by enterprise management (Ponemon Institute 1). To ensure a safe and stable social networking system, it is necessary to improve the computer network security structures. Since cyber-crimes have become increasingly creative over recent years, there is a vital need to upgrade and improve IT defense systems consistently and regularly.
Negative Impact 3
Employing social media tools can result in a transfer of power from sellers to buyers. Hajli and Sims have conducted a study by employing the SEM-PLS model for data analysis, conducting surveys, and collecting census data. Their article was published in the Technology Forecasting & Social Change and was peer-reviewed. The purpose of the study consisted of determining patterns of consumer behavior regarding social networking systems (SNS), as well as predicting future modifications. Hajli and Sims demonstrate that SNS is an increasingly significant factor in social change (351). The results of the PLS analysis indicate that social commerce constructs lead to an increase in an intention to buy.
The obtained evidence suggests that the consumers’ empowerment is directly related to social networking strategies the companies employ. It is a substantial change, which leads to the power transfer from sellers to buyers (Hajli and Sims 354-355). Buyers are subject to a transformation, wherein they play not only a passive role of consumers but also an active role of content-generators (Hajli and Sims 354-355).
Based on data-driven evidence, it is possible to conclude that social media networking systems constitute a major factor of change in consumer behavior (Hajli and Sims 354). Moreover, an increasingly widespread practice of employing social media marketing leads to serious risks regarding the IT security system (Ponemon Institute 1). The perverse halo effect was demonstrated to hurt sales indices (Abhishek and Tellis 149).
In response to the research evidence provided above, it is necessary to recommend the management to invest in social media networking support, IT security system development, as well as controlling the perverse halo effect. Despite the adverse effects, the social media marketing system is an excellent method to establish a relationship with consumers (De Vries, Gensler, and Leeflang 1), as well as to improve the overall productivity of an enterprise.
Abhishek, Borah, and Gerard J. Tellis. “Halo (Spillover) Effects in Social Media: Do Product Recalls of One Brand Hurt or Help Rival Brands?”Journal of Marketing Research 53.2 (2016): 143-160. Print.
De Vries, Lisette, Sonja Gensler, and Peter SH Leeflang. “Popularity of brand posts on brand fan pages: An investigation of the effects of social media marketing.” Journal of Interactive Marketing 26.2 (2012): 83-91. Print.
Hajli, Nick, and Julian Sims. “Social commerce: The transfer of power from sellers to buyers.” Technological Forecasting and Social Change 94.1 (2015): 350-358. Print.
Ponemon Institute. “Global Survey on Social Media Risks: Survey of IT & IT Security Practitioners.” Ponemon Institute Research Report (2011): 1-21.