Social Media and How IR Professionals Can Use It

Throughout this semester we have learned extensive amounts about social media through our own use, speakers and the article we were asked to read for class this week. The article discusses different outlets including Facebook, Twitter, LinkedIn and blogs and showed how different companies you these outlets in order to distribute information about their business. Through experience with blogs and Twitter this semester I decided to further research the need for social media usage in today’s Investor Relations industry.

A recent article written by Lisa Davis discussed the usage of social media and how it is able to build stronger shareholder value. Davis mentioned numerous times how the use of these media outlets has been significantly growing. While these outlets are being used, people worry about things such as blogs and Twitter due to the extensive disclosure regulations. IR departments need to be cautious to not distribute information through social media that has not already been made public. Davis decided to avoid the legal issues of social media and just focus on how relations with stockholders can be strengthen through using these outlets.

Typical thoughts about social media, which are untrue, include that the outlets should only be used by public relations and marketing departments. Another belief held by IR departments that is untrue, is that companies shareholders and investors are not present within the social media world. Since these ideas are untrue, companies are beginning to use these outlets in additional to traditional outlets. This addition has helped them to connect with media, analysts and investors in a new and economically proficient way.

Davis attempts to encourage companies to become involved in social media by mentioning certain statistics. Statistics include 85% of financial services professionals under the age of 50 are utilizing social media. 58% of investors believe new media will become increasingly important in making investment decisions. A final statistic which proves the increasing need for IR professionals to understand social media, is the 35% of Fortune 500 companies use a Twitter account.

Davis comments that these outlets can start conversation with investors, along with strengthen the bonds between companies and their shareholders. Davis attempts to help those not using social media to enter the Twitter, Facebook and blogging world in the correct ways. When first starting out, it is important to listen to what others are saying about your corporation. Once information has been listened to, start monitoring people that frequently mention your business and help them to disperse correct information. Once comfortable with these media outlets, business will start sharing in a proactive way. A considerable amount of our class has included social media, so it was of interest to me to learn how frequently these outlets are used, along with how companies can actively participate in Twitter, Facebook, LinkedIn, and blogs.