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The legal and compliance impact of social media

Ed. note: This post is the fourth in a series drawing from Mainstay Salire’s study on Social Media ROI: Quantifying the Benefits of Social Media Marketing Platforms for the Enterprise. Download the entire report for free here.

Comprehensive Legal and Regulatory Compliance

Financial services and insurance companies are regulated by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC), which consider all “static” content (including social media posts) to be marketing material. As such, companies are required to conduct pre-reviews of social media communications and retain copies of content published on Facebook and other channels.
“We worry about fines all the time,” a representative of a major financial institution told us.
Educational institutions as well as companies in a range of industries (e.g., fitness clubs) are also subject to state advertising regulations and labor laws. These range from restrictions on how institutions are allowed to advertise and market educational programs (including via social media) and rules that require only full-time employees to publish posts on behalf of businesses.
Findings

  • Regulated companies reported easier compliance with government and industry regulations due to their social media marketing platform’s built-in monitoring, workflow, and archival systems
  • Companies said that the platforms substantially lower the risk of incurring regulatory penalties and becoming the target of legal action

Streamlined Compliance Supervision Effort

Regulated companies that introduced compliance automation capabilities said it helped them move more confidently into local social media markets. Marketers at an insurance company, for example, said they were better able to focus on building customer relationships rather than worrying about legally allowable content. The platform’s monitoring, alert, and data management capabilities all contributed to reducing administrative overhead. Adoption of the platform resulted in a 65% reduction in the number of full-time employees needed to manage data compliance.

Thanks for reading! If you want to learn more, download Mainstay Salire’s study on Social Media ROI: Quantifying the Benefits of Social Media Marketing Platforms for the Enterprise.