With 63% of institutional investors reporting social media to be an input that will have increasing importance in investment decisions, it has quickly become a channel that the IR industry can no longer ignore, despite compliance concerns present in any Reg FD communication.
Surprisingly, the discussion around compliance was limited – the group has taken steps to mitigate risks while focusing on innovation in this space. We have started to see this from our clients more frequently now – where previously, regulated communication groups have been unable to overcome the compliance concern, they are now focusing on the opportunity that innovation in social media can provide.
Some other points that the panel agreed on during the conversation were:
1) Context is key for investors to find signal in social media
In order for investors to find value in IR comms through social media, they need a way to cut through the noise of consumers talking about the same brand. StockTwits’ development of the “$” in tweets has helped bubble stock and earnings information to the top of the pile and IR communicators are actively using this in their information releases.
This is one of the great differentiators of Twitter as a platform compared to Facebook. Whether a poster uses a hashtag or a dollar sign, it enables you to push your message into any niche group that you want to be in. It also creates an efficient way for searchers to find this specific content through the competing noise.
2) Curation of content is an art, not a science
Howard Lindzon of StockTwits says that his company focuses on four components to ensure effective curation of stock-focused content not only for the internal StockTwits community, but also for the top-tier media partners using this consumer generated content: Community self-policing through user flagging of off-topic content, an internal StockTwits moderation team, automatic keyword filters, and technology to pull in the right content from the right contributors from the outset.
While today’s technology is powerful and automatic filters efficient, we’ve found that nothing beats having a human looking through content. StockTwits’ use of community alerting as well as a moderation team is a model we roll out for our clients in many projects as well – often in conjunction with automatic filtering. This lets us be as efficient as possible without missing out on the value that experience around a topic can provide in curation.
3) Retail investors can be as well informed as their institutional counterparts
Friederike Edelmann, Director of Investor Relations at SAP (an Ogilvy client), spoke about how social media has helped her company maintain its commitment to treat all investors in the same way. When SAP releases a news bulletin, the IR department starts with a typical PR Newswire release, but follows immediately with a tweet through its corporate Twitter handle.
68% of surveyed companies do the same thing as SAP, which makes sense since this platform helps companies not only reach the retail investor, but also financial writers. In fact, according to the Financial Media Conference, 60% of financial bloggers use Twitter as their primary news source.
4) Social media still presents IR communicators with challenges
At the end of the day however, the panelists weren’t willing to say that social media didn’t present risks for IR communicators. Paul Dickard from AECOM said his biggest concern was the lack of control of his message and where the message could appear. Of course, Dickard was quick to acknowledge this risk exists through almost every other communication platform.
Gene Marbach from Makovsky and Co. also reported the need for clearer guidelines from the SEC. This makes sense – uncertainty around SEC and FINRA (for broker/dealers) regulations continue to cause pause for our clients – it’s only by walking them through a process to select the right social media compliance platform, establishing risk response guidelines, as well as moderation and escalation protocols do they feel ready to move into this space.
5) Investor Relations must become more socialized with the rest of the enterprise
John Bell, Global Managing Director of Social@Ogilvy, said in his keynote address that enterprises are quickly becoming socialized in every department. Our IR panelists agreed with this statement and were firm in their stance that their industry can’t lag behind the rest of the organization, in spite of the risks that are inherent in this niche space. Their organizations are quickly moving forward from pilot programs into operationalizing social media as part of their everyday communications tactics – and it’s showing value for them almost immediately.
As we celebrate the launch of Social@Ogilvy, Ogilvy’s new global social media practice, it’s exciting to feature the an industry that is mitigating its risk in order to reach its stakeholders in a meaningful way – through social media.