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Social Media and IR Trends Webinar Wrap-Up

July 21st, 2009
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sm_ir_webinar_title_slide1Last week, at our second webinar of the year, Darrell Heaps, Co-founder and CEO of Q4 discussed the current trends in social media and investor relations.  Social media has been given a lot of attention within the IR arena and Darrell has been an active participant in some of those discussions.  For example, he recently sat on two panels on the evolution of financial communication and the evolution of disclosure at the NIRI and CIRI conferences respectively this past June.  He also presented to the CICA research group in Toronto on trends in corporate reporting earlier this month.

We had another great turnout and a lot of insightful questions at the end.  The team at Q4 did tweet the event, but we thought we would provide an overview of the salient points for those of you who missed it:

AGENDA

  • Key trends
  • Financial social networks and blogs
  • Examples of companies using social media today
  • How to get started
  • Monitoring
  • Risks

KEY TRENDS

  1. In August of last year, the SEC issued new Reg FD guidance which “under certain circumstances” supported corporate websites and blogs as recognized channels of fair disclosure.
  2. SEC also issued their support for shareholder forums.
  3. Nielsen online report issued in March 2009, states that 67% of the global online population uses social networks and blogs – up from 58% the same time last year.
  4. Study by Rivel Research Group in 2007 that states that 75% of pro investors use corporate websites weekly if not daily.
  5. Slow decline in the number of sell side analysts are helping to push coverage and equity research to the social web.
  6. Competition for capital is fierce – as there has been a steady decline in the number of IPOs in recent years.

All of these trends have helped to initiate a change in the market over time which has seen the increased use of the web and social media to communicate with key audiences.  Traditional channels are no longer effective on their own and companies who adopt these new channels are able to differentiate and compete more effectively for capital.

FINANCIAL SOCIAL NETWORKS AND BLOGS

Seeking Alpha – largest financial blog aggregator partnered with Yahoo!Finance; four million unique users/month (25% are institutional investors).

StockTwits – trading social network based on Twitter; has around 85,000 users, adding 500 a day; linked to whalewisdom and now available through Bloomberg.

Wikinvest – part of a new wave of contributor driven communities; finance portal; social interactive data.

EXAMPLES OF COMPANIES USING SOCIAL MEDIA TODAY

Q4 has been keeping a close eye on the use of social media and investor relations.  Part of our findings is that in addition to traditional channels of disclosure, Twitter seems to be one of the initial social networks companies are using.  For example, it is being used as a notification system linking to headlines and other content already posted on their websites.  All of the content that these companies share has been previously disclosed through RegFD channels.

A total of 12 examples of companies using Twitter were provided (note this was not an exhaustive list, but rather a sampling of a variety of sizes and sectors):

UPS; Catch The Wind; West 49; Johnson & Johnson; Dell; Ebay; Sun Microsystems; CGI Group; Shell; Chevron; Rio Tinto; Barrick Gold.

Blogs aren’t really that common, but the handful of companies using them (eBay, Sun and Dell) are doing a great job.  Facebook has not been used for IR purposes but more for marketing and HR.  Interestingly it is used the most to share pages.  Lastly, we have been monitoring LinkedIn but we haven’t seen any companies who use it as another communications channel as of yet.

SLIDESHARE AND OTHER CONTENT NETWORKS

SlideShare is a social content network that Darrell calls “the YouTube of presentations”.  There are thousands of IR presentations on SlideShare and they recently added an IR category.  Other content networks include DocStoc and Scribd.

Using content networks increases your discoverability and gives people the ability to make your content viral which means it can be shared, disseminated and republished across the web to millions of retail and institutional investors.

FIVE STEPS TO GET STARTED USING SOCIAL MEDIA

  1. Good IR website and follow best practices
    a. The IR website must be viewed as the primary channel
    b. Self-publishing control allows you to be strategic
    c. Ease of use, accessibility and transparent communication
    d. “Why invest?”
  2. Create compelling content (news, presentations, events)
  3. Make it social and include it on your site – upload your content to social content networks and then embed your site + provide RSS feeds for News, events and presentations
  4. Use Twitter like a ”notice newswire’
    a. Tweet about news, events and presentations and link to IR website
    b. Manually post updates and/or use RSS feeds to automate
    c. Start small, learn and expand conversations over time
    (only share content through Twitter that has been previously disclosed, do not use it as a primary channel for disclosure – basically anything that is on your website is ok to tweet about)
  5. Monitor the web and evolve over time (free ways to monitor include google alerts and other free tools i.e. http://search.twitter.com, http://socialmention.com).

RISKS

  • Disclosure of material information should follow Reg.FD guidelines
  • All social channels must be treated the same as traditional channels (disclosure controls)
  • Only previously disclosed information should be shared (social channels should not be used for initial disclosure of material news, only after disclosure has taken place)
  • Risks are from innocent updates in social networks – travel example
  • Social media policy and training are important to mitigating risk

I think it’s safe to say that anyone who is interested in social media knows a company that is using it quite effectively for marketing, advertising and PR.  What is not widely known is the number of companies who are using it and how they are using it for IR.  It is still in its infancy for use in IR and it will be interesting to see where it evolves.

Please click here  to view the presentation or video version of the webinar.

Related posts:

  1. Webinar Replay – Social Media and Investor Relations Trends
  2. Trends and Best Practices in Online Communications and Social Media in Corporate IR
  3. NIRI Cleveland – Social Media and IR Wrap Up – Top 5 Take Aways
  4. IR Website Best Practices Webinar Wrap-Up
  5. The Current State of Social Media and Investor Relations – FREE Webinar

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