Institutional Investors and Analysts Increasingly Using Blogs and Social Networks for Research
Brunswick Group LLC, recently released results of an online survey to examine if and how new media (which encompassed blogs, message boards, Facebook and Twitter) plays a role in the investment recommendations and decisions of institutional investors and analysts. The survey was distributed to several thousand buy-side investors and sell-side analysts in the U.S. and Europe in July 2009. 455 analysts and investors responded with a nearly 50/50 split between the sell-side and buy-side, and a similarly even split between respondents based in the United States and Europe. Participant profile etails were captured in the survey, including firm type, geographic location, sector focus, market-cap focus and age group.
Presentation on SlideShare:
The findings are quite interesting and provide concrete evidence that institutional investors are using blogs and social networks to gather information. The findings also point that social media is growing in importance for this key audience:
• 30% say that blogs, message boards and chat rooms have become more important to them.
• 42% read blogs (12% use social networking sites).
• 22% said definitely going to become more important.
More importantly for IROs, is the fact that the investment community is still looking to the information provided by the company as a primary source of information to make investment recommendations and decisions:
• 53% of participants selected “information direct from companies” as the source with most influence, while 83% ranked it in the top three sources of influence.
• 4% of participants included “new media” as the source with most influence while 12% listed “new media” among the three most influential sources (Business media was 5%).
Further to this, the findings show that they are also using social networks to make investment decisions or recommendations as:
• 47% of European and US institutional investors have read information posted on a blog which prompted them to investigate an issue further and for 20% this led to an investment decision or recommendation.
• 14% have made recommendations or decisions based on information they found through investigating something they read on a message board.
• 4% have made an investment decision or recommendation based on information they initially sourced from a social networking site.
We can surmise based on these findings that institutional investors are integrating blogs and social networks as part of their day-to-day routine as 58% of the respondents believe that new media will become increasingly important in helping them make investment decisions in the future.
Social networks are providing another source of information for institutional investors to make investment decisions. So a comprehensive IR plan that entails having a robust IR website and incorporates the use of social media will certainly enable a company to increase its reach within the investment community.
Related posts:
- An IR perspective “Equity Research in the Age of the Web”
- The Use of Social Networks to Engage Investors During the Quarterly Reporting Period
- 60% of Financial Advisors in North America are Using Social Networks to Drive New Business: Study
- Equity Research Analyst Weighs in on the Social Web – podcast
- Trends and Best Practices in Online Communications and Social Media in Corporate IR
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