The Social Media and IR Hype Cycle

17 October 2012

By Darrell Heaps

4 comments

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There is a general theory of technology adoption know as The Hype Cycle. To sum it up, the theory outlines the phases of adoption that most new technology goes through in any market.

Wikipedia’s definition:?A?hype cycle is a graphic representation of the maturity, adoption and social application of specific?technologies. The term was coined by?Gartner, Inc.[1]

If you’re a regular reader of Q4?s blog and whitepapers you know we’re big believers in the value and importance of using social media in investor relations. This year has been an interesting one for me personally, as I’ve had the opportunity to speak to hundreds of IR professionals across the country about social media and IR. Recently I’ve noticed some interesting things that are happening in investor relations that made me think of the hype cycle.

This makes me think that we are somewhere between the Trough of Disillusionment and the Slope of Enlightenment in the Hype Cycle.?So what does this mean?

As social media has become a part of the web it’s now evolved as part of regular communication with key audiences.

So as much as communication is a part of IR, so is social media. If your company does not put a lot of emphasis on refining key messages and effectively communicating those messages to your key stakeholders, chances are your company doesn’t see the value in using social media for IR. Similarly, if you believe in honing messages and being fully transparent with your stakeholders, then you are probably open to using social media.

This is key, because social media is a communication tool. Not an objective. From the work we do in the market we see for many companies social is now a part of the communication mix and always will be. For others, it’s not a fit yet, but will become an ever-important component as we move to the Plateau of Productivity.

Where do you think social IR is in the Hype Cycle?

 

4 comments

Comments

Joann Sondy

7 years ago

Reply

If your chart were a scatter chart, I bet the dots would be scattered everywhere.

I do agree that early adopters are utilizing social media as a distribution/communication channel. However, in defense of the laggards, it might be their clients who are resisting. Client budgets are miniscule compared to 10-15 years ago and many companies are “just doing what is required”. Combined with the IROs lack usage for business-related activities.

Of course, the total disconnect of IR/marketing and general PR still exists. Maybe the new IR apps might help IROs demonstrate how cost-effective a well-defined social media strategy can be.

Darrell Heaps

7 years ago

Reply

agree the dots would be scattered, however I do think we’re past the initial hype phase and now it’s really about what utility it provides investors and companies. Your comment about budgets is interesting and I hadn’t thought about that, perhaps if we had the budgets of 10 years ago we’d be further along!

Loa

7 years ago

Reply

Totally agree that budgets are probably a factor in adoption of social IR. I also think that there is hesitation in the sense that it adds yet another “thing to do” in an already busy role of communication with an investor audience. Also, adoption of new technology with GenXs is not as quick as GenYs. Many of my friends (I’m GenX) and colleagues are not a fan of using social media for business. They are “old school” IR and finance professionals, if you will. Telephone, email and paid advertising vs earned media. I’m a huge advocate of social media and early adopter of technology in general however many of my peers feel differently. They will get on the bus eventually because they have to or will loose their competitive edge!

Darrell Heaps

7 years ago

Reply

Thanks for the comment Loa, I think you’re right and I’ve heard the same thing many times. “I don’t have time for something new” I’ve always felt this is more about priorities than anything else, as there is always time for the important things. And what could be more important that staying competitive (both corporately and career wise!)

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