Social media clearly offers PR and marketing benefits. So why aren’t investor relations (IR) specialists taking advantage of social media to a greater extent?
Most corporate investor relations practitioners polled in the National Investor Relations 2016 Social Media for Investor Relations Survey, 72 percent to be exact, said they don’t use social media for their work. The figure dropped two percentage points from 2013. In addition, the minority of IR pros who use social media don’t track metrics. IR pros said investors are not interested in receiving information through social media.
Other research shows they’re wrong.
Most Investors Use Social Media
A Greenwich Associates report Institutional Investing in the Digital Age: How Social Media Informs and Shapes the Investing Process released last year revealed that almost 80% of institutional investors regularly use social media.
Out of that group, 30 percent said material gathered through social media influenced their investment decisions, 37 percent had informed their company’s decision-makers of information obtained on social media, 34 percent said information found on social media influenced a decision to work with a particular client or company, and 33 percent said information obtained on social media triggered a discussion with their investment consultant
“These results show that social media is influencing decisions that can result in the allocations of billions of investment dollars around the world,” stated Dan Connell, head of market structure and technology at Greenwich Associates and author of the study. “With approximately 40 percent of the institutions globally expecting to increase their use of social media in the coming year, we’re projecting a further, rapid increase of social media influence in institutional investment markets.”
Enormous News for IR Teams
“This is huge news for IR teams who continue to adhere to the outdated idea that institutional investors have no interest or no usage of social for work purposes,” says Zach Wallens, specialist, global disclosure & financial reporting services, at Business Wire. Benefiting from social media requires commitment from both IR teams and investors, Wallens argues.
“While we wouldn’t recommend using social media as a sole method of dissemination for regulatory news, we do recommend it as a complementary one,” states Obsidian PR.
How to Implement Social Media in IR
Obsidian PR offers these recommendations for IR teams developing social media efforts.
Create a policy. A policy outlines what, how and when you will share. It creates a workflow and assigns responsibilities. Your company size and sector and key audiences and their expectations will dictate the policy.
Monitor social media activity. Even if you don’t post, you must be aware of what people say about you. Social media listening and sentiment analysis enables you to gauge public sentiment toward your organization and stock performance. Investors are probably monitoring social media.
Prepare for a crisis. A proper crisis management process closely aligns with PR and traditional communication channels.
Measure engagement. Measuring the effectiveness of your communication and engagement with audiences helps decide where to dedicate resources. Analytics help correlate and better understand data gleaned from independent channels and find what works and what doesn’t.
Employ different approaches for different channels. LinkedIn is ideal for sharing most corporate content, from careers to market updates. Regularly uploading corporate results presentations and executive interviews to your own YouTube channel helps establish a following of private and professional investors. Twitter is well suited for live earning announcements, management Q&A on Twitter chat, and for pointing followers to investor-related corporate announcements. Brand-focused posts work well on Flickr or Facebook.
Bottom Line: Citing lack of investor interest, investor relations teams have been slow to embrace social media. However, research shows that institutional investors do indeed gather information through social media. IR teams that communicate through social media and employ social media monitoring and measurement will gain a competitive advantage, experts say.
This post was previously published on the CyberAlert blog.