My Top 3 “How to” Q&A for Social Media and Investor Relations
7 October 2010
By Darrell Heaps
Over the past month I’ve been fortunate to meet with many groups about the use of social media and investor relations. This includes events in Chicago, Dallas, Toronto, Vancouver and New York. I really enjoy getting out on the road and meeting with people face to face, it’s also great to sit on panels with really bright people like Serena Ehrlich, David Baer, Rhonda Bennetto, Doug Chia, Broc Romanek, Michelle Leder and Eric Jackson.
To prepare for this road trip my presentation and notes focused a lot on why companies should be including social media in their investor and corporate communication efforts. To help make the case I included stats like, 49% of institutional investors are reading blogs (latest Rivel research) and 85% of brokers under 50 are using social media (Ledermark study). Essentially, I wanted to “shine a light” on social media so people would see the irrefutable evidence that social media is a requirement now, not an option.
After the first couple of sessions it became clear that things had changed and that instead of “why”, attendees were now interested in the “how” of social media. I was pleasantly surprised to see the tide changing, considering the conversations I had with IROs across the country in previous years and really hard-selling them on the value of social media.
I don’t think this is representative of the entire market. As I recognize that many of the naysayers out there aren’t the ones coming to sessions or meeting with me. However, the key to overall market adoption is seeing the next wave of early adopters starting to use these tools and derive value from them.
On that note, here are my top 3 “How to” questions and answers for social media and investor relations:
1. How to manage Risk?
Managing risk is an integral part of investor relations so it’s not surprising that it’s always one of the main areas of discussion. Here are a few areas that I tend to focus on when discussing risk.
- I really believe the first thing every company should do is ensure they have a social media policy that covers disclosure and succinctly states that only previously disclosed information is to be shared. In addition to disclosure, the social media policy should also govern the use of social media by ALL employees.
- The next area is to monitor the web and social media for mentions of your company, executives, key projects etc. I always recommend starting with free options like Google Alerts and Twitter Search and then depending on the volume and whether you need/want analytics on this data, moving up to a paid service.
- I believe the final aspect is to include legal early in your intention to use these tools and involve them in approving things in advance. For instance, preparing a list of quarterly Q & As that you plan to share through social media after earnings are released. Include these during your disclosure process so everything is handled and approved together.
2. How to convince Executives?
Convincing executives comes down to showing them real world results. It doesn’t matter how many stats, charts and graphs about the use of these tools by investors. What is going to get their attention is your peer group using these tools and real world results. To provide this I recommend you:
- Share case studies on how similar companies in your space are using the web and social media.
- Provide reports on what is being talked about your company online.
- Start small and track specific metrics. This can be one channel or one aspect of the business. The key to true buy-in is when executives will see real results for your company.
3. How to measure ROI?
The BIG question always centers around what is the ROI of these efforts and how to track it? The answer to this is evolving as the market adopts and we learn from the early adopters what works and what the return of their investment has been. My experience has shown there are 3 main parts to tracking social media ROI for investor relations:
- Increased awareness: when a company starts using social media in an investor context the most immediate and direct way to track these efforts is through increased traffic to the corporate website. Related to this is also tracking the number of views that social media assets like videos on YouTube, Slides on SlideShare and photos on Flickr generate over time.
- Reduced incoming calls to IR for repetitive questions. During my panel in Chicago, Serena shared examples of how companies are publishing Q&A to their blog following earnings and how this has been instrumental in reducing incoming call volume. When presenting with Rhonda Bennetto, IRO from @TVIPacific in Vancouver, I learned that calls to the TVI investor relations group decreased from 50 calls a week to 2 a week after adopting social media. Talk about ROI!
- Republishing of corporate content by investors and journalists. There is a lot of power of using social media for listed companies as is it allows investors and journalists to easily republish your information. This in turn expands your company’s influence and helps to ensure your corporate message is consistent across the web. We have seen this with HP and their acquisition of Palm. Laura Graves from Cisco has also talked about this and Rhonda from TVI let us know that she is now seeing excerpts from her posts on Facebook showing up verbatim in Yahoo!Finance message boards.
To wrap up the post, this latest road trip really opened my eyes to the changes that are happening. Yes, we’re still early on but I can just imagine where we’ll be in the next year.
Do you have any answers to the “How to” questions above? If so, please share in the comments below.