The Social Disconnect Between IROs and Investors

Jim-Delaney-Fall2012-CroppedBy Jim Delaney, CEO Marketwired

Although more than half of investors report using social media for research purposes, according to a recent survey released by NIRI, 72% of IROs report that they’re not using social media as part of their job. While that statistic may not seem shocking on its own, the data actually reveals a much deeper – and greater – disconnect between IROs and the stakeholders they’re trying to reach.

In the wake of the SEC’s April ruling approving the use of social media for the disclosure of material information, Marketwired commissioned a study to learn more about investor attitudes toward social media and explore if and how they’re using it. We discovered that Wall Street is already turning to social media for information that influences their investment decisions. When it comes to social media adoption, however, IROs tend to fall into one of three camps: avoid, augment or integrate.

AVOID

People who fall into the social avoidance group are averse to risk, change, and ultimately, the inevitable. With each new technology that has hit investor relations in the last decade and a half, this group has taken a stance against it. Much like investor relations pages on corporate websites, social media won’t always be a best practice; in time it will become a standard practice.

AUGMENT

The augment group falls somewhere between total avoidance and total integration of social media. They’re dipping their toe in the water, but unwilling to take any real risk. These are the professionals who will recommend that you keep doing what you’re doing, perhaps sharing a link to your traditional release in your social channels. Although this is the path many IROs are likely to take, it falls short.

INTEGRATE

In order to yield the intended result of broader levels of transparency, you must integrate social media and engage ambassadors wherever they choose to access information, not where you decide it is best to do so. Best practices make data accessible to people where they already are rather than asking them to come to you. It’s important that you integrate your communications to establish what serves as a credible social source of information for your company. If you don’t, you run the risk that other people will control your message for you. Those who choose to integrate are able to better leverage the advantages of eager listening, while those opting for augmentation and avoidance fail to utilize the valuable benefits of social conversation.

At Marketwired, we take an integrated approach. We have been focused on the evolution of information distribution for years. Acquiring Sysomos three years ago led to the development of our new product, Resonate, a first-of-its-kind platform that gives IR professionals a single interface to distribute material news to social and traditional channels simultaneously. I’m not proposing that one form of disclosure is better or worse than another. What I am saying is that the time to integrate your messaging is now.

The future of investor relations is no longer a distant dot on the horizon. It’s here. It’s social. It’s happening now. If you’re not thinking about social media from a 360 degree perspective, it’s time to open not only your eyes, but also your ears. Your investors are already using social media tools. People are talking about your company in the social space. You must be a part of that conversation.

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About the Author: Jim Delaney, Marketwired’s CEO, leads the company’s corporate vision, business direction and global strategy. Most recently, he served as Marketwired’s Chief Operating Officer, steering the day-to-day operations of the company. Prior to his tenure at Marketwired, Jim built a reputation for delivering exceptional results for prominent international companies. 

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3 Comments

  1. 40deuce on July 25, 2013 at 11:40 am

    Thanks so much for giving Jim the opportunity to post here today!
    I also agree with what he’s said here. It’s no longer about what the companies think is the best way, they now have to meet their customers/audience where they want to be met. If they like traditional press releases then that’s fine, but if they prefer social media, maybe it’s time to meet them there.

    Cheers,
    Sheldon, community manager for Marketwired



  2. Scott Cameron on July 26, 2013 at 3:11 pm

    “Marketwired commissioned a study to learn more about investor attitudes ” – do you have this study? I’m interested in the methodology behind this as I have read quite a bit that contradicts your assertion in other studies.



  3. 40deuce on July 29, 2013 at 5:04 pm

    Hey Scott,

    I’m the community manager for Marketwired, so perhaps I could shed a bit of light on the survey for you.
    We commissioned an independent market research firm who surveyed 120 people in different roles in the financial sector to better understand social media’s influence on Wall Street and investment decisions.
    You can view the survey results at http://blog.marketwire.com/2013/05/09/the-future-of-investing-and-the-great-social-shift-infographic/

    Cheers,
    Sheldon