CMO Council Finds Link Between Data Breach and Brand Trust

Heightened public awareness and media attention have created a direct link between personal data security, brand reputation, and stock price. Yet only 30 percent of marketers have any crisis containment plan for security break-ins or failures.

That is the finding of a new study about data security and brand trust scheduled for release today from the CMO Council. Conducted with the Opinion Research Co. and the Zyman School of Brand Science at Emory University, the study involved consumers, executives, and marketing professionals.

While some 80 percent of top marketers polled registered a growing level of concern, there is a disconnect in what they believe and what is being done, the study reports. For some 60 percent say security has not become a more significant theme in their company's messaging and marketing communications. A full 27 percent don't even know if their company has a crisis containment plan.

"There is a real opportunity for marketers to differentiate themselves by talking about their security protection," says Scott Van Camp, editorial director of the CMO Council and author of the study.



Factiva, which sponsored the research with software security maker Symantec Corp., tracked more than 17,000 distinct articles written on security breaches over a 16-month period.

The most surprising finding, says Van Camp, is how unprepared marketers are to deal with what is surely an inevitable part of doing business in today's connected environment. "There needs to be a lot more preparation," he says.

Of more than 52 million individual account records placed in jeopardy in 2005, more than 9 million Americans were victims of ID theft, with cumulative losses totaling more than $54 billion--a per-victim average of $5,885, the report states.

So far this year, at least 30 million more cases of compromised data have occurred, according to the Federal Trade Commission.

Researchers from Emory University also found that on average a company loses from 0.63 percent to 2.10 percent value in stock price when a data breach is reported--equivalent to a loss in market capitalization of $860 million to $1.65 billion per incident.

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