Published April 5, 2010
It didn’t happen. Social media didn’t go away. In fact, quite the opposite has occurred: Social media has exploded in its usage and ubiquity, and now significantly influences many communications around the world. The challenges of strengthening corporate reputation and building trust among stakeholders can prove difficult for any professional communicator. Across investor relations circles, the practice of supplementing more traditional IR strategies with social media is not widespread. Certain functions specific to IROs, namely the disclosure of material news, make adopting social media and using its channels as primary communication tools something to be thoughtfully considered. So, for the sake of this brief discussion, let’s sidestep the legal department and address the “relations” function of the IRO so that we can better understand how channels like Twitter, Facebook, YouTube and corporate blogs can work to enhance shareholder relations and improve the corporate bottom line.
Some “untruths” about social media for IR
Common fallacies among IROs considering social media include:
As more IROs begin to implement social media as part of their overall communications strategy and use the channels to enhance — not necessarily replace — traditional IR practices, they are connecting with media, analysts, investors and consumers in new and profitable ways.
How social media can strengthen the IR function
Social media connects you to audiences that matter. For those who think Twitter and Facebook users aren’t relevant to IR, think again:
Social media can start conversations and strengthen existing relationships. Every day, millions of people are sharing ideas and opinions on companies, products and brands. Search Twitter, YouTube or Google Blogs for your company, your CEO, your products and services or your competition. Chances are, you can’t afford to stay out of those discussions. By tapping into and monitoring conversations, you’ll soon identify the key influencers and opinion-shapers you need to talk to and incorporate into your IR outreach. The opportunities to promote your company and make it attractive to potential investors abound in social media. You can go beyond telling the story through financials and build strong relationships with key and new stakeholders. Remember, people are already talking about your company — it’s your choice to ignore or engage.
Social media participation can directly affect your bottom line. Attributing ROI to social media participation can prove difficult, but directly correlating a company’s financial performance to its social media activities is impossible, right? Not necessarily. The Wetpaint/Altimeter Group’s ENGAGEMENTdb Report found that the most valuable brands in the world are “experiencing a direct correlation between top financial performance and deep social media engagement (interacting with others, instigating discussions and responding during conversations.) The relationship is apparent and significant: Socially engaged companies are in fact more financially successful.”
Where to begin with social media
The tips, rules and strategies for establishing a presence in social media are seemingly as infinite as the channels themselves. Let’s keep things simple and outline some straightforward activities and no-cost ideas you can put to work right away: