Regulation. It sounds antithetical to the very nature of social media, right? Social is real, unedited, and raw. It’s often unplanned, and seemingly out of control.

Social media purists may argue that you can’t regulate it, nor should you try. It’s an environment where the people are in control rather than the institutions, and if you try to control the conversation (or flow of information) you do so at your own peril.

While I appreciate that sentiment and recognize that social media participation warrants a very different approach than traditional advertising and marketing, it is naive to think that it can happen unfettered, particularly in heavily regulated industries like health care and financial services.

Beyond the risks that most brands face in this area (loss of messaging/positioning control, copyright/trademark infringement, fraud), brands in regulated industries have additional challenges with regard to social media, including potential privacy disclosures, adverse event reporting, fair balance representation, supervisory and data retention requirements, and what exactly constitutes an endorsement.

Regulating bodies like the Federal Trade Commission, Health and Human Services Department,  PhRMA,  FINRA, the Securities and Exchange Commission, Insurance Marketplace Standards Association, and others continue to grapple with how to oversee and control these new channels. The overarching theme of their rulings to date is that posts on social networks and blogs can be considered correspondence, public appearance, advertisement, and/or sales literature and are therefore subject to the same supervisory, data retention and reporting requirements as other marketing channels.

But the benefits of social media (monitoring brand mentions and industry trends, identifying and cultivating influencer relationships, freely disseminating original content/news, researching and connecting with prospects/clients, providing a higher degree of interaction and transparency) and the growing numbers of participants are hard to ignore. As Irwin Lazar at Nemertes Research noted, "I don't think you can put the genie back in the bottle, so it's more about defining acceptable use policy and managing [enforcement]" than it is about avoiding social media altogether.

So let’s talk about managing (or dare I say, regulating) your own social media initiatives. There are steps you can take to ease your company’s entry into this “Wild West” of  marketing.

1) Appoint a person or team to “own” the brand’s social media involvement. This is likely some combination of marketing, PR, customer service, legal/regulatory, and/or agency partners. This task force will develop the formal process for monitoring, contributing to, and analyzing social activity. It’s not meant to make the process more bureaucratic and less social, but rather to engage the right stakeholders, get everyone comfortable with the process, and protect your organization and employees.

2) Create a Social Media Governance Policy for your organization that provides guidance on usage and regulations. Include employee use of these channels at work, as well as appropriate conduct with regards to work related information in their personal time. Often, you can re-purpose existing marketing communications rules here (e.g., how employees use email, instant messenger, or other channels) coupled with some of the newer guidelines. Make it clear that reference to clients, customers, or related work products are prohibited without express permission. Education and training are half the battle when it comes to regulatory compliance, as many employees simply don’t realize they are breaking the rules. “Let’s not blame social media for training or policy inadequacies that need to be addressed within a company.”

3) If you’re new to social media, it’s OK to start small. Don’t try to enter into and manage every social space at once. Identify the one(s) most used by your customers or industry, monitor what’s going on there, and then choose one area for a pilot program. This is often the best way to increase the comfort level with social media within the organization and refine your operational procedures. I really like State Farm’s approach here:

Try getting started with something unrelated to your business. State Farm initially got involved in social media through the 50 Million Pounds weight-loss challenge. It wasn’t aligned with the core business, which allowed the company to cut its teeth in social media without facing the privacy, risk and management issues directly related with its business.

4) Leverage the new crop of social media middleware providers to operationalize your programs; players in this space include:

• Socialware. Their Risk Manager product allows administrators at a company to turn on or turn off many of the features enterprises find questionable on LinkedIn, Facebook, and Twitter, and archives user-generated content from these applications that can be aggregated and exported to XML format for an easy audit trail.
• Arkovi, which also provides social media archiving for business including a record of public communications and mentions, capture of corporate and individuals’ social media footprint, and hold & release screening.
• Facetime, whose Unified Security Gateway monitors, controls and records content posted through the corporate network to social networking sites. It also includes workflow to preemptively control social media posts by banning specific keywords or preventing the post entirely, recording the incident, and alerting an administrator.
• Hewlett-Packard. Their HP TRIM records management software enables enterprises to archive any pages, documents and posts to its SharePoint sites.

With a well-thought out plan, social media is doable within regulated industries. Social media policies shouldn’t be about prohibiting innovation, but rather fostering increased participation. Take a page from the Harvard Business Review playbook and make your own policy encourage the use of social media to create value and realize the opportunities for problem-solving, relationship-building, and reputation enhancement. Think of it as enabling effective use rather than simply preventing problems.

Do you have an example of a brand in a regulated industry that has successfully adopted social media? Any other best practices or lessons learned to share? Let us know in the comments.