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Harmful Effects of Misinformation and Its Impact on Business

With the announcement of Elon Musk’s US$44 billion proposed takeover of Twitter, the debate about the harmful effects of misinformation has again hit the headlines.

The issue of misinformation vs disinformation and the harmful effects it can cause is not just for Twitter but for many businesses around the world. It’s an issue that iResearch has examined in our in-depth survey, The New Reality: Mitigating The Risks Of Misinformation and our new report, Does fake news affect your business? But first, we ask, what is the difference between misinformation and disinformation?

Confused by misinformation vs disinformation?

Don’t worry if you are confused by this. There is a lot of misunderstanding over misinformation vs disinformation. Although both words refer to types of wrong or false information, only disinformation is wrong on purpose, says Liberties.EU says author Toba Beta puts the difference between misinformation vs disinformation as “Disinformation is duping. Misinformation is tricking.”

Our new report also addresses the difference between misinformation vs disinformation. It states that misinformation is an umbrella term that covers any information that is inaccurate, regardless of whether it has been created or disseminated on purpose. Disinformation is the poster child of misinformation, as modern society grapples with fake news spreading rapidly across digital networks.

Yogesh Shah, CEO of iResearch Services, says “Regarding misinformation vs disinformation, the main difference is intent. Misinformation has been around as long as there have been human civilisations, but it has found its element in the digital age. The types of motivation behind it abound, from political strategy to malicious players to poor fact-checking. Intent is key to distinguishing disinformation from inadvertently inaccurate facts.”

Sentiments surrounding the effects of misinformation on business were gathered from 1,000 consumers and 600 business leaders globally for the survey, which harnessed data science to bring new insights into perceptions surrounding misinformation.

Harmful effects of misinformation on business

The dangers of misinformation and disinformation are widespread. It is not only an issue for social media giants such as Twitter, it also can have harmful effects on all businesses. In fact, the effects of misinformation can burden businesses with hidden costs.

All respondents to the survey say misinformation is an “extreme” problem, or a “common” issue. Around eight out of 10 believed that the effects of misinformation are most felt by businesses.

In addition, more than half (54%) of business leaders said the effects of misinformation are likely to be worse in 20 years than they are now.

Why are the dangers of misinformation so important? According to the survey, this is because inaccurate news about a business can directly affect customer purchasing decisions. To demonstrate this, 85% of the consumers surveyed stated that they would not buy a product from a company associated with misinformation and 90% said reliable information is a “very important” or “fairly important” factor in whether they choose to buy a product or service from a particular business.

The majority of all age groups surveyed other than the 18-23 age group found this “very important”. Among younger respondents, 47% felt it was “fairly important”, compared to 41% who thought it was “very important”. Two-thirds (66%) of those aged 56 and above found it “very important” – the highest proportion.

Trust is a crucial element in business

Misinformation thrives best where there is a lack of accurate information, says Yogesh. “This suggests that businesses that are actively communicating with their customers and the public are best poised to stay ahead of fake news and possess more credibility when trying to mitigate any crises of disinformation.

“Trust is a crucial element in business. It makes or breaks brands. Without it, companies have an uphill battle when it comes to their brand reputation and marketing.”

One of the major dangers of misinformation in the sustainability sector is ‘greenwashing’ – claiming products and services are more eco-friendly than they are in reality. This issue was highlighted in our Sustainability Summary. It is truly a case of misinformation vs disinformation, as businesses are not necessarily aiming to deceive when announcing their efforts when it comes to sustainability. Excitement over such initiatives can lead to overeager communication.

Most consumers aged 18-55 surveyed thought that businesses were doing what they said (or more) in terms of sustainability. However, perceptions of consumers aged above 55 differed radically, with only 38% believing businesses do what they say (or more). Consumers in the 18-23 group were the most optimistic about corporate sustainability messaging, with 74% believing in it.

Two-thirds (68%) of business leaders surveyed claim their company’s sustainability messaging accurately reflects the level of activity that has been taken. Conversely, only 39% of consumers believe businesses seemed to be doing what they say. “This perception gap indicates a figurative space in which mistrust is bred.

“Businesses need to be able to determine if their messaging and marketing is posed at an accurate level, or if their customers need to be educated on how the companies are fulfilling their sustainability promises. In most cases, businesses will need to do both to build customer trust in their sustainability pledges, and to build on their reputation as eco-friendly brands.”

In the health care sector, the effects of misinformation vs disinformation can be a matter of life or death, so the survey questioned their effect during the COVID pandemic.

Most respondents in all regions (75% in APAC, 66% in North America and 61% in Europe) thought that companies were doing very or fairly well at combatting misinformation related to COVID-19.

Are businesses doing enough to prevent the dangers of misinformation?

Most business leaders believed they were doing ‘fairly well’ to prevent the dangers of misinformation. Leading the way were those in the information technology and services sector, with 41% going a step further and saying they are doing very well. This was followed by professionals in financial services (34%) and healthcare (30%). The lowest proportion was among those in marketing and communications at 21%. This shows it is not enough for businesses to be actively taking protective steps against the dangers of misinformation – they also need to communicate their expertise to be seen as credible, trustworthy experts.

So, what are businesses doing to combat the dangers of misinformation vs disinformation? Businesses in the regions we surveyed said that they were focusing on building trust with employees, clients and affiliates to combat the dangers of misinformation and disinformation (89% in both North America and APAC, and 86% in Europe). Next in importance for businesses in APAC and North America to offset the effects of misinformation is the involvement in policy and governance (85% and 83%). Companies in Europe, on the other hand, prefer to invest in reliable brand messaging and communications (82%) to protect against the effects of misinformation.

Demystifying data followed next for those in the APAC region (82%), North America (78%) and Europe (74%). Only 35% of business leaders on the whole thought that their companies were taking an active approach when it came to demystifying data to mitigate the dangers of misinformation.

The report concludes, “As we have reiterated repeatedly, establishing credibility is a key tool in a business’s arsenal in the fight against misinformation. A key element of this is being able to communicate data – hard facts – in a persuasive and engaging manner. Through compelling data storytelling, companies can be seen as reliable experts in their fields — and as trustworthy sources who can speak out against disinformation.”

Find out more about how to combat the effects of misinformation.

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