Reports of data breaches affecting some of today’s largest companies continue to grab the headlines of prominent news outlets nationwide. The damage experienced by a company after a data breach has lasting negative effects on brand equity and reputation. In fact, a recent survey* of nearly 850 executives, conducted by the Ponemon Institute and sponsored by Experian Data Breach Resolution, reports that the average time it takes to restore an organization’s reputation is one year.
In addition to the time and energy it takes to rectify the situation, a data breach has the potential to severely affect a corporation’s brand equity over the long term. Depending upon the type of information lost as a result of the breach, the average loss in the value of the brand ranged from $184 million to more than $330 million, with an average brand value prior to the breach of $1.5 billion. Hence, the minimum brand damage was a 12 percent loss, increasing to nearly a one-quarter loss of the brand value in some instances.
Read more of the press release from Experian.
The keyword for me is “survey.” Where are these executives getting these cost numbers from? Are they providing factual reports or is this their impression? And what kind of sample was this is the average pre-breach brand value was $1.5 billion? So far I haven’t found any link to an actual write-up of the survey methods.