What are the strategic implications of social media for managing the public relations function?

Social media represent a central challenge and opportunity for public relations practitioners.  As a case in point, consider the recent video posted on Youtube by employees of Dominos Pizza, offering viewers a twisted view of food preparation at the national chain.  Although the video was quickly discredited as a hoax, it nevertheless was seen by millions of potential Dominos customers who may have had their views of the company’s products seriously downgraded.  See http://www.youtube.com/watch?v=OhBmWxQpedI

How should a company respond to a crisis generated by such communication on social media such as Youtube, Facebook, Myspace and the like?  What are the appropriate strategic considerations?  What goals and objectives are realistically achieved when utilizing social media in a pro-active or reactive fashion?  Dominos responded to its Youtube crisis by posting its own video on Youtube. See http://www.youtube.com/watch?v=7l6AJ49xNSQ Is this the right response?  What other steps should be taken?  How can results be measured?

Heidy Modarelli handles Growth & Marketing for IPR. She has previously written for Entrepreneur, TechCrunch, The Next Web, and VentureBeat.
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