Having an opinion on social media in investor communication
At the 24th IR Society Annual Conference on 20th April 2010 there was a poll taken at the beginning of a debate on social media. The audience was asked at the beginning of the discussion whether they themselves used social media. Nearly half (46.2% to be exact) responded that they didn’t use it at all. The subsequent session aimed to highlight the opportunities and the pitfalls of using social media as an IR tool. At the end of the session, the poll asked whether anyone had changed their mind? The response showed that 44% said ‘no’, it hadn’t changed their mind. Given the list of delegates at the event and the influence they will have in their respective organisations, I think it is a useful barometer that the speed of take up is not going to be that fast. It confirms that the jury is ’still out’ and that there would need to be a significant amount of convincing to erode the perceived risks of this activity.
Many commentators are advising to keep a watching brief, if you’re not going to be actively using social media as an IR tool, at least look into how they are being used by others, and learn from the mistakes of the ‘early adopters’. I guess its hard to have an educated opinion on the use of social media for Investor Relations if you are not using or experimenting with the tools directly?
All important communication initiatives need to be owned at the top. The CEO would not normally have to have these knowledge and skill sets as part of his/her personal armoury, but one thing is for sure, they need to have an opinion on them in order to have a policy, and to have that they need to understand the landscape.
Some of the issues associated with the new routes to communicating with investors using social media is that there are many platforms, they all have their own strengths, they each have security risks, they require a coordinated approach to implement. They can’t just be ‘bolted on’ as an afterthought.
If you are investigating the merits of using social media in your investor relations communication or haven’t yet developed an opinion, you may benefit from reading ‘Does social media have a place in investor communications?’ .
It does seem that the ‘rule book’ slows down the adoption of new technologies for the IR department, this hurdle doesn’t affect the marketing function. There are a number of pitfalls that need to be avoided, but the benefits could be compelling.
If you do decide it is a route that adds value to your IR communications, and once the legals and an an appropriate policy is addressed, implementation may then call for a stronger working relationship with the marketing function. In many cases they will already be well versed in applying social media to their communication mix. It may also help to break down some of the silo mentality between marketing and the corporate team that we see in corporate reporting projects and perhaps encourage more ‘joined up thinking’?
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