For some time, there’s been a recurring meme suggesting that investor relations pros are to blame for their industry’s painfully slow embrace of social media. The meme goes that social media has transformed many businesses -- but because IR pros have been so concerned about the potential dangers they’ve chosen to sit on the sidelines.
This is only a small part of the story.
Until recently there’s been no obvious social media platform for public companies to engage investors. That’s why the marriage of social media and investor relations has failed to take off. And while a number of investment sites have attempted to appeal to public companies, they’ve done so inconsistently.
Instead, some trailblazing IR pros have attempted to fill this void by creating social media opportunities for themselves. One IR pro in particular created an interactive investor experience on Facebook. But, ultimately changes at Facebook forced this effort to shut down.
Today, the value of social media to IR is abundantly clear. Social media offers two crucial opportunities for IR pros: (1) the ability to expand the reach of their corporate news / financial releases; and (2) the chance to reach new or potential investors – something incredibly challenging using traditional IR tools such as earnings calls, through press releases or via their IR websites.
So, how can IR meaningfully participate in the social media revolution?
Last year StockTwits launched an IR service that addresses public companies’ need for a social media presence to complement their IR websites. The StockTwits team developed its service by reaching out to IR firms, identifying their needs, and determining how its platform could help. This is exactly the game plan I used back in ’07 when charged with a similar effort at SeekingAlpha.
As a result of StockTwits’ efforts, hundreds of public companies have signed up for their service, and no doubt thousands of others will follow.
Aside from StockTwits, there are currently few, if any, social media platforms frequented exclusively by investors that offer the tools IR pros need. As a result, public companies continue to attempt their own social efforts.
This latest earnings season saw companies allotting more time to earnings call questions, using video to complement audio webcasts, adding additional investor content to corporate IR websites, and using Twitter/StockTwits to disseminate earnings related content.
The goal of these individual corporate efforts is to build trust, brand, and awareness for their company and stock. Building trust, brand and awareness also happen to be goals of most every social media campaign – which is why social media spending for IR outreach should come from the typically larger marketing budgets of public companies.
IR pros have already embraced social media. They have for years. That much is clear.
But their limited participation stems largely from a scarcity of viable options. They’re waiting for the “obvious” social, investor platform to welcome them with the tools necessary to spread their messages.
At the moment, StockTwits remains the best option. No doubt their service will expand to ever more interesting crowdsourcing opportunities that help IR pros target investors. And as more public companies participate in social media, more compelling content will be available to investors who will then have more tools to help them decide to become shareholders.
Hopefully, we’ll see other social media platforms dedicated to investment discussion roll out IR friendly tools, too. For, no doubt, everyone – public companies, investors – will benefit.