Social Media Behavior Motivates System Evaluation
Two Alerts issued last Wednesday by the SEC confirm the influence social media has on corporate perception and public opinion. The SEC used a case in which an Illinois-based investment adviser attempted to use social media channels in order to fraudulently represent himself to the public with the intention to gain interest from potential buyers online. This instigated the filing of two SEC risk alerts which were issued on January 4. The first, entitled "Investment Adviser Use of Social Media" provides an overview of policy and procedural definitions and characteristic use of internet habits.
"Social media is landscape-shifting. It converts the traditional two-party, adviser-to-client communication into an interactive, multi-party dialogue among advisers, clients, and prospects, within an open architecture accessible to third-party observers." The Alert specifies its definition of the term social media as "an umbrella term that encompasses various activities that integrate technology, social interaction and content creation. Social media may use many technologies, including, but not limited to, blogs, microblogs, wikis, photos and video sharing, podcasts, social networking, and virtual worlds..." and it goes on to clarify the idea of this definition within the space of what it refers to as rapidly changing technology.
The alert also identifies website display as particularly unsettling since its use under those conditions may interrupt corporate intention, claiming it "converts a static medium, such as a website, where viewers passively receive content, into a medium where users actively create content."
The second alert, prepared by the Office of Investor Education and Advocacy, entitled "Social Media and Investing: Avoiding Fraud" seems to be issued as a warning to consumers or users of these services in an effort to create better awareness toward internet predatorial schemes.
These alerts, while somewhat provocative, at least should provide marketers with a degree of concern over current policies and insufficient guidelines for use by their employees, and the importance of creating a better understanding of consumer-based and/or service-oriented internet traffic.
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