From NIRI 2009 – The Evolution of Financial Communication
On June 10 I attended a panel discussion at the NIRI annual conference in Hollywood Florida entitled The Evolution of Financial Communication, which centred on social media. Michael Nowlan, President & CEO of Marketwire, the event sponsor, did an excellent job of moderating the discussion.
Panelists were: Timothy Carey, Managing Director, Digital Media, ICR, Inc; Ruth Cotter, Director, IR and Treasurer, Advanced Micro Devices; Eileen Cassidy Rivera, Vice President, Communications & Investor Relations, Vangent, Inc., and Darrell Heaps, President, CEO & Co-founder, Q4 Web Systems.
Michael opened the session by asking each panelist to introduce themselves and to describe their involvement /perspective on social media.
Eileen was a new user of social media and referred often throughout the session to the need to get one’s message down to 140 characters. In looking at the Vangent Inc. site, I didn’t notice any reference to Twitter. I searched Twitter for both Eileen and Vangent Inc. but didn’t find anything, so I assume that Eileen is in the very early stages of adopting social media. Her newness in the area may have served as an inspiration to attendees who were thinking of also getting involved.
Eileen felt that IROs needed to look at getting information out in more new and creative ways in order to reach audiences who might be looking outside of traditional media. And to give these audiences better ways to access information. She said that brevity of message was important in social media.
Ruth said that “Content is king and even more so in social media. It’s a challenge for IROs to adapt their content for social media.” The AMD site was chock-a-block with all kinds of social media – in fact, I had to pull myself away in order to get back to writing this post. It’s obvious that the AMD culture has embraced this new technology. This page in their corporate section includes links to FriendFeed, YouTube, Facebook, Twitter, Flicker, Videos, Blogs. Other than one video for an Executive speech , social media hadn’t penetrated IR communications to the same extent but it’s likely that the road has been paved for Ruth to more easily expand the role of social media for investor relations.
Darrell said that “social media has added another layer to communications – it doesn’t replace the old. It just gives you one more way to get your information out to people who want to access it through social channels.”
Tim agreed and said that “a lot of the tactics that IROs use are still important. It’s not about replacing the old, it’s about having the right strategy to integrate social media into the investor relations program.” The entire panel concurred.
Darrell referenced a panel that he attended the day before on Trends in Media & Technology, where Robert Williams, Director Investor Relations at Dell Inc., had mentioned his surprise the volume of internal responses he received when he solicited questions for his quarterly earnings call. Darrell said that, “Social media drives more internal dialogue as companies respond to things that happen in the market. This can have a positive effect in bringing divisions closer together and in getting input from other areas of the company.”
Mike then asked each panelist what they felt was the largest trend or change in communications that new technology was leading to – was it social networking? Blogs? Enriched content such as video, photos and audio assets?
Ruth said that one of the greatest changes in communication was the ability for social media to address issues in a much faster way than traditional media. She had a great example of how social media helped to solve a market misperception about her company. AMC’s valuation had been discounted by the market because of perceptions about battery longevity. This problem actually stemmed from inconsistencies in the way that battery longevity was measured. Her CEO started a blog that ultimately resulted in changes in how battery life was measured, which soon dispelled this misperception.
In speaking with numerous issuers Darrell has heard many of them express concern about rogue comments in social media and their hesitation to get involved in blogging. Darrell felt that a good place for issuers to start, was to think of SM as a notification system, “60% of web users are using social media – issuers should think of it as an additional way to get information out. Today that means using your existing content, information that has already been vetted through your disclosure controls and procedures to give broader dissemination to this information”.
Tim felt that video had a key role to play, “Video makes things more personal. It puts a face to a name and helps viewers get to know a company better.” (This perspective supports a lot of what we heard the day before from both Laura Graves of Cisco Systems and Dell’s Robert Williams, who also both felt that video didn’t always have to be high production.)
Mike then asked Ruth about challenges she faced in incorporating blogs into IR communications, despite the fact that as a culture, the company seemed to really embrace blogs for product initiatives. He also asked her what IROs should be looking at before jumping in – what rules should they be thinking of.
Ruth, admitted that it was a challenge to get the company to accept blogging for IR. She said that issuers really needed to train their employees on using social media on behalf of the corporation and that employees also needed to be mindful of what they were communicating in their personal social media channels. She gave an example, of an employee had once mentioned on his Facebook page that he was going to be away and the specific location he mentioned led to a market perception that a deal was in the works (which it was). This resulted in movement on their stock. (I heard a very similar story from another executive in a social media webinar I attended last year – different company, but essentially the same story.)
In terms of what companies should do to prepare for their involvement in SM, Ruth felt it important to have a social media policy in place. She also said that AMD provides in-depth training for their employees on social media and that employees needed to get an internal license in order to use SM on behalf of the company.
At this point, numerous questions came from the audience – it was clear that attendees were very engaged in topic. One person asked how to monitor who was talking about their company?
Darrell said that there were numerous ways that one could automate this, including subscribing to Google alerts for mentions of your company. (This same question came up in the Trends in Media and Technology and Serena Elrich of Start-up Army offered a number of free monitoring services.)
Another person asked, “How do I keep up with responding to all of the mentions?”
Ruth said that, “The purpose of social media is to spur a conversation so we don’t usually respond. You have to consider how important it is to respond on a case-by-case basis.”
The next question asked by an attendee was, “How many big institutional investors are involved in social media?”
Darrell said that as an example Seeking Alpha, a portal for financial blogs, was visited by 4 million unique users per month, and that 1 million of these were institutional investors.
Following this, someone asked, “How do I get my information out to analysts and institutional investors?”
Tim responded by saying that short videos were a good format – again largely because they expose other people within the company. Ruth agreed with this and said that her company found them very valuable.
Darrell said, “You need to repackage your content to make it easier for them to consume both on your site and in social media. For example, instead of just providing your presentations in pdf format, also use Slideshare, which makes for a much better user experience and makes it easier for others to share your content.” He felt that it was, “Important to get involved in social media and be a part of the conversation so you know what’s going on. You can’t ‘control’ the conversation, forget about that, but you can help set the tone.”
“You also need to look at your corporate/IR website and consider the role that it plays. Right now, with current budget cuts, public companies are focusing more on face-to-face meetings, but what does that analyst do before he goes to your meeting? He looks at your website for context on your company. And what does he do after he leaves your meeting? He goes back to your site to verify the facts that came up in the meeting. You need to understand this and stop using your site as a filing cabinet – you need to use it as a strategic tool to provide more context.”
Tim agreed and said, “If you have a good vision, a good leadership team and strong performance you should bring this all together to help users understand why they should invest.” (I talked about this very topic and gave some good examples in an IR Website Best Practices webinar we ran a few weeks ago. )
The topic then turned to using social media for issues management.
Ruth said that using social media could get the word out so much faster than traditional channels. (See reference to Dominos versus Wendy’s in my June 10 post as a great example of this.)
Tim felt that issuers should have a strategy in place for issues management through SM, before a situation arose, so that when an incident occurred, they knew how to respond.
Darrell felt that it was important to be proactive – if a company knew that a situation was going to be contentious, it was better to be out in front communicating about it before a problem arose. He said that Barrick had done a good job of this related to a specific mining site, where they anticipated community backlash. By being upfront, they were able to address concerns before they became problems.
Questions were still being asked as the clock ran down and the time was up.
Clearly this topic continues to be of great interest and companies need to find ways to get involved that suit their cultures and their comfort level.
As I was using TwitterBerry to tweet the session live, I may have omitted something, so if you attended or were a panelist, I look forward to your comments.
Related posts:
- Legal, Social Networking and Financial Expertise Help IROs Stay on Top of Game
- NIRI Twin Cities – IR in the Age of Social Media Wrap-up
- Webinar Replay – The Current State of Social Media and Investor Relations
- Trends and Best Practices in Online Communications and Social Media in Corporate IR
- Q4’s CEO Discusses all things Twitter, Social Media and Investor Relations
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“Darrell said that “social media has added another layer to communications – it doesn’t replace the old. It just gives you one more way to get your information out to people who want to access it through social channels.” ” I agree with this comment, there are still many people who have not been exposed to media on the internet and therefore it is not replacing the old. Good blog here!