[BreachExchange] Social media exposure can increase the cost of a data breach

[Destry Winant]

https://www.siliconrepublic.com/enterprise/social-media-data-breaches

A new study from Dublin City University shows that social media exposure
can exacerbate the negative impact of a data breach.

2018 has been a year dominated by data breaches. Companies from Facebook to
Google and Marriott all fell victim to data breaches in the past 12 months.
The incidents exposed personal information such as email addresses, credit
card and passport numbers, and passwords, among other types of data.

A recent study conducted by  Dublin City University (DCU) researchers,
Social media and stock price reaction to data breach announcements,
examined whether increased exposure on social media mitigated or compounded
the cost and damage caused by data breaches.

The study examined 87 individual breaches across 73 publicly listed US
companies that occurred over a four-year time period.

Disclosure of data breaches is a minefield

The analysis showed that social media exposure can exacerbate the negative
impact of data breach announcements and increase the cost of the breaches
themselves. On average, companies experienced an additional stock price
decrease of 1.2pc.

The negative impact is even larger when the company discloses the breach
via its Twitter account (a further decrease of 5.2pc on its stock price).
An increase in the number of tweets over the event period and a large
Twitter following also increased the negative result.

For other firms, the result can be slightly different. The study also found
that the timely communication and disclosure of a breach can reduce the
potential harm for companies that have relatively low visibility with
traditional media such as newspapers. The impact for these firms is
positive as social media allows them to disseminate information that cannot
be disseminated through more established channels of communication.

Social media can be overwhelming for companies

One of the researchers, Dr Pierangelo Rosati of DCU Business School, said:
“Social media has the expectation of instant feedback, and meeting that
expectation is incredibly difficult in [the] midst of a crisis, and this
creates a significant amount of pressure. The number of tweets or comments
can be overwhelming.

“Also, once bad news goes viral, it is very hard for companies to keep
control of the information flow. In the context of a company crisis, this
may be particularly detrimental and worsen an already serious situation.”

He added: “There is a generalised positive view on the adoption of social
media for firms’ communications. This study shows that communications
departments and press officers should be more aware of the downsides and
negative aspects present when it comes to crisis management, and allocate
adequate resources to manage it.”
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