The Twitterverse has witnessed yet another case of Twitter hack. This time the victim is the Associated Press, with hackers tweeting about an attack to the White House and Barack Obama being injured! It took 5 minutes for the post to be retweeted over 4,000 times and favourited by over 250 people (hopefully, realising it was fake). The account has over a million followers.
The significance of the story is the financial impact it brought within minutes. It took only two minutes for Dow Jones share prices to drop significantly. The news travelled amongst the traders at lightning speed, via e-mail and other channels.
As a result, the AP account is no longer live, and presumably an investigation is taking place.
See what power one tweet can have! I think there are at least 3 implications that the story highlights:
1. Financial markets increasingly trust social media
Twitter has become a trusted channel. Social updates are no longer swept under the carpet but are taken seriously. And, as we’ve found out, the social sphere is being constantly monitored and responded to accordingly. No wonder Bloomberg has announced incorporating Twitter feed into its data service.
2. The impact of social media (mis)use can be immediate and financial
Miscalculated and clumsy tweets can cost not only a reputation but also immediate sales. The Dow Jones fell by 140 points within 2 minutes of the tweet. Another research by McKinsey has recently revealed that 90% of executives whose companies use social technologies report measurable benefits. Misuse of social media channels can cost money, whereas appropriate, informed use can boost sales.
3. Organisations should prepare themselves for social crises
Because of the two points listed above, businesses, politicians and non-profits can no longer afford to be unprepared for social incidents or even crises. There is a clear case to invest in crisis prevention, mitigation and management strategy. You may find our recent series of articles on Crisis Management thought-provoking.