Social media is changing the world, that’s no secret. Twitter, Facebook, LinkedIn, Youtube and others all attract more users every day and the range of uses continues to grow – from forcing change in governments to just keeping in touch with friends and family.
A key aspect of social media is that it is essentially interactive, allowing for fast communication with stakeholders and for feedback from them.
While many companies have been slow to use social media for conveying investor information, this is changing. Twitter is now commonly used for releasing quarterly earnings reports and for making important announcements. Numerous companies have Facebook pages, which extend beyond investor information but often do include it as well. And the interaction on Facebook between the company and its stakeholders can be revealing and sometimes even act as a forerunner of significant stock price changes.
Many companies are also using LinkedIn, a social media site that tends to cater more to professionals and business people. They use Slideshare for sharing key presentations, Youtube for sharing videos of annual meetings and executive presentations and StockTwits to channel important investor information to stakeholders and numerous stock outlets for financial news.
What this means is that investors have a variety of new information sources, which can be received on a very timely basis and which can be very revealing about a company. It’s an interactive media where you can see the responses and complaints of customers and observe how the company is handling them. It’s a media that levels the playing field. A media that is showing signs of becoming a major force in Investor Relations.
A less obvious result of the growing use of social media is the vast amount of information that becomes available online about a company and its customers, investors and other stakeholders. This information is tremendously valuable to the companies themselves.
The difficulty, however, is the sheer volume of that information. This is where the concept of Big Data comes in – a concept that has been receiving extensive attention in the world of corporate information systems. Companies are mining the data coming available through social media and analyzing it for purposes of evaluating their strategies in dealing with stakeholders – from customers to green advocates. There has been a huge emphasis in many companies on installing new “Big Data” tools that can be used to feed the data into their Business Intelligence and Customer Relationship Management Systems.
So social media represents not only a new means for stakeholders to interact with a company, it also provides a vast array of information that is being used to help shape future strategy and policy. That’s true interaction and something that is changing the way both the stakeholders and the companies behave – a true game-changer.