Marketers are failing to keep pace with the financial, customer and brand implications of information security in the digital age, according to a major research initiative focused on the impact of security on corporate brands and business value, involving consumers, executives, and marketing professionals.
With customer sensitivity, media scrutiny and public awareness about security dramatically escalating, marketers must do more to develop contingency plans and brand strategies to address both the risks and opportunities associated with security and data breaches, the new CMO Council study warns.
The study, Secure the Trust of Your Brand: How Security and IT Integrity Influence Corporate Brands, found that while both corporate marketers and business executives indicate that security concerns are a rising concern for their companies and their customers, just 29 percent of marketers say that their company has a crisis containment plan in case of a security breach.
Eighty percent of 250 top marketers polled registered security as a growing concern for their companies and customers, and there is reason to believe their concerns are justified: more than 17,000 distinct articles were written on security breaches and issues from January 2005 to July 2006, significantly impacting affected companies and customers.
More than 50 percent of consumers say they would either strongly consider or definitely take their business elsewhere if their personal information were compromised, and security breach events directly impact stock performance. Emory University researchers found that a company loses, on average, from 0.63 percent to 2.10 percent value in stock price when a breach is reported: equivalent to a loss in market capitalization of $860 million to $1.65 billion per incident.