Stop Making Excuses! Social Media IS Investor Relations
Well, it’s time to face a dirty little secret. Corporate communications officials responsible for investor relations (IROs) are the last hold outs to embrace social media. Oh, they think they have reasonable excuses, such as: “who has the time?”, “our legal team would never approve it”, or another favorite, “our investors aren’t using social media.”
Well, colleagues, in 2011 the excuses just no longer hold water. Here are 5 reasons why social media is beneficial to investor relations
- Most listening = Better messaging = Stock price stability?
- Save time. And money. Company-wide
- Crisis Communications? Social Media is your friend
- Everyone is doing it!
- Speaking of which, even the analysts are doing it
Social Media will make your job easier
Today’s corporate communications and investor relations professionals have significant responsibilities relating to the health and welfare of the company. As the voice of the company to key financial audiences, these teams are responsible for communicating the company’s messaging to shareholders and stockholders, answer a wide range of shareholder’s questions, and protect the company’s reputation. As Chris Wachtelhausen of Rivel Research so eloquently points out: The IRO role is increasingly vital as stock prices often correlate to the clarity and transparency of the company’s messaging.
Social Media Saves You Time (and cuts costs company-wide)
Oftentimes, the most time-consuming part of the company’s communication and customer service is responding to the questions about the company. Investing significant time in common and repetitive communications is a huge red flag. Company websites and communications channels are not providing company information in a way their core audience, shareholders and investors, can understand. Social media can help you fix this, and you will save time across all company channels.
Crisis Communications? Social media is your friend
The best way to see how social media works in a crisis is to answer 3 core questions that come up during any crisis:
- What happened?
- What are people saying?
- What is the best way to respond?
Social media reveals the public perception of what happened, an insight into what people are saying, what people want to know and, more importantly, who is talking about you. All of these factors will guide you through your short-term and long-term response plans. But even more valuable, by having established social media platforms, the company has the perfect place to share their response message, establishing your company as the authority of its own crisis.
Everyone is Doing It
Social media, once feared by public companies, is being embraced across communication departments. From marketing and sales initiatives to corporate recruiting on Facebook to corporate blogs and YouTube channels.
As legal teams become more familiar with social platforms, initial resistance to communication via social platforms has waned.
Source: Q4Websystems, June 2011
Yes, even the analysts
- 95% of journalists believe that social media can be a reliable tool for sourcing stories*
- 49% of institutional investors read financial blogs**
- 60% of financial bloggers use Twitter as a primary news source***
- *New Communications Research and Middleberg Communications
- **Rivel Research 257 US institutional investors
- ***Financial Media Conference, Feb 2011
First, let’s just get rid of the idea that analysts aren’t using social media to research your company. Not only do analysts use social media, they rely on articles written by journalists who use social media to round out their research. This is a perfect opportunity to provide the information needed by journalists and analysts.
But wait! You Need a Social Media Policy
Until your company establishes a social media policy for your employees, anything mentioned online is fair game. Keep your brand reputation safe and your employees RegFD compliant and implement a social media policy and quarterly training.
So take advantage of social media, my corporate communication friends. The maturation and saturation of social media tools and the benefits to the overall health of the company makes 2011 truly is the year public companies realize that social media is investor relations.
