The Reach of Social Media Networks

By Karen L. Garrett, partner, Stinson Morrison Hecker LLP, Kansas City, Mo. This article accompanies the main article, “Social media damage control: Why your bank must plan now”

Disclaimer: This article provides general information only. It is not intended to be a comprehensive summary of the law or to treat exhaustively the subjects covered. This information does not constitute legal advice or opinion.

Social networking is an internet juggernaut. According to a Nielson report published in March 2009, two-thirds of the world’s internet users regularly visit a blog or a social networking site. (Nielson Company, “Global Faces and Networked Places”). This sector now accounts for almost 10% of all internet time, which means most internet users spend more time on social networking site and blogs than they spend checking their e-mail. This sector now accounts for more than 1 in every 11 minutes people spend on line.

Facebook exemplifies the explosive growth of the social network sector. It began as a service for university students. Now, almost one third of its users are between 35 and 49. Almost one-quarter of Facebook users are over 50 years-old.

A survey conducted by Anderson Analytics in July 2009 indicates that the specific social network a person uses varies by age group:

• Generation X (30-to-44-year-olds) and baby boomers (44-to-65-year-olds) connected on LinkedIn more than any other demographic. LinkedIn is considered more of a business forum.

• Generation Y (15-to-29-year-olds) was different. Nearly 75% used MySpace, 65% used Facebook, 14% used Twitter, and 9% used LinkedIn.

• Generation Z (13-to-14-year-olds) social network users were more likely to use MySpace than Facebook. Only 9% of them used Twitter and none used LinkedIn.

• Large chunks of every age group joined a social network to keep in touch with friends; for diversion; to maintain contact with family members; or in response to a friend’s invitation to join the network.

• Notably, few users (about 5%) joined social networks for business-related purposes (e.g., to pursue job leads, increase sales, or build a network).

• These statistics underscore the internet’s omnipresence and suggests both risks and opportunity:

• Employees will be using social networks. Because most of them will use social networks to share details about their lives, it is vital that financial institutions implement policies to control the types of information their employees share about their employer.

• Large numbers of people are not exploiting the internet for business development. (Or they are not doing it effectively.) Well-planned and well-executed network strategies could provide a financial institution with a competitive advantage.

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