Ponemon Institute Survey Finds that Data Breaches Can Cause Lasting and Costly Damage to the Reputation of Affected Organizations
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 Resolutions, 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.