Wall Street

The Investor Relations Social Media Revolution

For years now, I’ve been a big proponent of utilizing social media as part of an effective investor relations strategy. The speed and efficacy of a service like Twitter is unmatched for quickly disseminating information, adding an additional layer of engagement alongside earnings calls or interacting with the public through Q&A. Services like StockTwits, founded by my long-time friend Howard Lindzon, are providing IROs the tools to manage, monitor and control their company’s social media IR presence.

The rest of the financial world is finally starting to catch up. A few months ago, the SEC ruled to allow companies to announce key information through social media, in compliance with Regulation Fair Disclosure, so long as investors are alerted to the social channels that are being used. This ruling gives IR professionals even greater opportunity to embrace social media, not simply as a nice-to-have but as an integral part of their IR strategy. It also puts pressure on organizations that have previously ignored social media—either due to their lack of understanding in its value or to avoid any regulatory snafus—to now adopt a social IR strategy in order to fairly inform all investors in a timely fashion.

With social media usage for IR poised to go mainstream, here are a few ways adopting social media can improve your IR strategy:

Deepening Levels of Engagement

Social media teams are obsessed with a single word: engagement. How can you go beyond simply broadcasting information and actually inspire your customers or investors to join the conversation? Twitter, for instance, can be used for a lot more than just live-tweeting your quarterly calls. You can take questions, engage and share data, all in 140 characters or less. Remember the old adage, “the medium is the message?” Present your social IR communications in formats that are easily digestible and appropriate for the platform; for example, consider creating infographics out of your data points to include alongside your tweets to create a visual message instead of merely a written one. Make your Twitter feed a dynamic complement to your traditional IR communications and you can improve your company’s overall investor relationship program by transforming it into a dialog rather than just a one-way megaphone.

Better Monitoring of Response and Reaction

Social media tools like Stocktwits or Hootsuite provide more than just an easy way to create and schedule your communications. Arguably more important is the integrated functionality allowing you to actively monitor social conversations surrounding your company and your brand. Tracking URLs and integrated analytics and reporting tools give your IR team a snapshot of the reactions and engagement that your social IR strategy is generating, allowing to you identify patterns and pivot your strategy as needed in real-time.

Staying Ahead Instead of Playing Catch-up

It’s no secret that today’s society is a social one—70% of companies are already utilizing social technologies today, not to mention the staggering user numbers of services like Facebook and Twitter, which integrate both businesses and consumers alike. With the SEC opening the doors to disclosure through social media, it’s not difficult to imagine a future where social media becomes a mandated part of investor relations. There are certainly hurdles to be navigated and questions to still ask: Are all social networks created equal as disclosure platforms? Must all communications happen simultaneously and identically across platforms with differing messaging requirements in order to maintain fairness? However, your IR department must be prepared to embrace this new direction, because the only constant in the world of technology is change. Your company’s ability to navigate an ever-changing technological landscape will be at the forefront of business trends and your customers’ and stakeholders’ minds for years to come. The social networks we explore, communicate with and rely upon today will look very different years if not months from now, but the vital importance of engagement and fair disclosure will remain the same.

By embracing social IR now, your company will be better positioned for the future of social media, whatever it may bring.

Photo Credit: Emmanuel Huybrechts

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.

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