The Future of IR is Social

If you think that Millennials thrive on social media, you’re right. If you think that the Baby Boomers haven’t tuned in as well, you’re in for a surprise. Social media has cross-generational appeal and forms the demographic heart of the investor community.

Platform of the People
More people are using social media than ever, and the bulk of those users are adults. According to the Pew Research Center, 65% of all U.S. adults now use social-networking sites, up from 61% a year ago and just 5% in 2005.

Social media has become pervasive across all generations and demographics – providing a tremendous new platform for IROs to inform and engage with the investor community. However, a 2010 study from IR Web Report highlights a surprising lack of uptake of social communication by IR professionals—despite growing evidence that social media can deliver serious benefits to corporate stock, up to 90% of IR pros fail to engage in social media, even when their company promotes these channels through other areas on their website.

Evolve Engagement with Social IR
Engagement methods within the IR community remain, for the most part, traditional and conservative. Most IROs rely on regulatory filings, press releases and earnings calls to distribute and update corporate and financial information – and a combination of non-deal roadshows, investor conferences, analyst days and company visits to engage with new and existing shareholder relationships.

While these tried and true methods still have a place within IR programs, IROs can improve their effectiveness and efficiency by employing a social IR strategy.

Expand Reach Without Breaking the Bank
When IR professionals use social media as a communications platform, they can distribute accurate, timely information to investors quickly and inexpensively, while still meeting the demands of fair disclosure. Social media creates an essentially no-cost scalability solution by providing quick, cheap and broad distribution for as many “eyeballs” as your company can acquire.

Additionally, social media allows IR professionals the opportunity to create something new within the investor community: true dialogue. Savvy marketers have been using social media for several years to monitor customer sentiment and create customer-driven strategies built on a foundation of listening. The IR community is now beginning to adapt these same strategies and use social media tools to create two-way dialogues as well. Social media conversations alert businesses to the priorities and concerns of their external stakeholders. By simply listening and committing to a practice of engagement, a business can establish leadership, share investment and create more meaningful investor relationships.

Drive True Investor Relationships
Face-to-face interactions with investors help the IRO move beyond one-way, sterilized communications with investors toward genuine, two-way relationships – putting a human face on the company and driving a deeper understanding of business strategies. By leveraging two-way social interactions and video conferencing with the investor community, IROs can better scale their face-to-face investor time in a cost- and calendar-effective way. This ensures a long-term understanding of corporate and financial strategies and long-term continuity and stability in the shareholder base.

About Sean O'Brien

Sean O’Brien is PGi’s Chief Administrative Officer. He oversees the company’s Legal, HR and Program Management organizations and manages Corporate Development, M&A and Acquisition Integration. In addition, Mr. O’Brien leads Corporate Strategy, Executive Communications and Global Facilities Management.

Leave a Reply