Earlier this year, the Virginia based National Investor Relations Institute put out an “executive alert” to its members on the use of social media. It’d surveyed IR professionals and found that 72% were not using social media for their work. The most often cited claim was that investors were simply not interested in the medium. Press releases and SEC filings were still far more important. You can access that survey and report HERE.
Let’s start with a gut feeling. In the same way that many in comms and marketing once resisted digital, one can’t help but feel that IR is in danger of being the last bastion of resistance. So do we think that investors are somehow cocooned from the digital revolution? Do they use social media less? I’ve hunted round for various bits of research on investor behaviour and some trends are very clear:
- Half of investors read blogs and a quarter use YouTube, more or less
- Influential financial bloggers are using Twitter as their main news source
- Over half of institutional investors are using social media at some point in their research
- And….institutional investors believe that social media will become more important in their work
Yet many IR departments are still averse to basic online services like mobile sites and investor apps. I still read curmudgeonly arguments about social media lacking credibility, being open to abusive comments and not being a suitable arena for such lofty topics. Those brave corporates that have used social media to announce their results have been accused from the sidelines of being rash and too risky.
In fairness, there is increasing use of YouTube but often to stick up dull as ditch water executive interviews with patsy questions that then – surprise, surprise – don’t get watched. Word of advice – nobody but nobody sits through eight minute formulaic CEO interviews – not unless they died while staring at the screen.
If you are worried about using social media for IR – the Investor Relations Society has issued helpful guidance which you can view HERE. What we at Rostra recommend is a very creative and interactive use of content to engage retail and institutional investors – departing from set-piece interviews and press release style commentary. All adhering of course to the rules and regulations.
- Twitter’s IPO and Investor Communications: A Turning Point for Digital IR? (edelman.com)
- Investor Communications vs. Social Disclosure on Social Media (businesswire.com)
- HedgeChatter launches product to monitor social chatter of stocks (bizbeatblog.dallasnews.com)