Social media has been having a tremendous impact on business, as new ways of using it have emerged. One of the first major business applications was the socialization of Customer Relationship Management systems. Social CRM enables a business to maintain current information about customers and use it to develop products that best meet their needs.
Social media is also being used to generate big data, which is then analyzed through systems such as Business Intelligence to generate broad based useful information for serving customers and finding new opportunities for profit and cost savings.
Some businesses have gone so far as to incorporate social media into all or most of their functional areas, leading to the concept of social Business.
So it was only a matter of time until Investor Relations got into the act. Late last year, the Securities and Exchange Commission recognized social media as a primary means of distributing IR information. Canadian regulators are not that far advanced, but there is nothing to prevent companies from using social media as a secondary channel.
So far, Twitter has been the most used form of social media. Companies have found it useful for sending out earnings notices, dividend announcements and generally links to important corporate events. Although Twitter is limited to 140 characters, the ability to include links makes it a very powerful distribution tool.
Starbucks is a leader in this field. In fact, they won the social media award last year in the NIRI corporate reporting contest for effective use of social media. Their Starbucks News account in Twitter is a model of “how to do it”.
Many companies have social media accounts but often they are not devoted to IR. Sometimes those accounts contain IR related information, though. Goldcorp is an example of a company that makes good use of Facebook (www.facebook.com/Goldcorp) and provides substantive information on it. Anyone holding Goldcorp shares would find the site interesting and informative.
The Goldcorp Facebook site links to a blog (another form of social media) which in turn contains a feed of the Twitter tweets issued by Goldcorp. Also, that same page contains links to the other social media used by Goldcorp, which include the full blog “Above Ground”, YouTube, Slideshare and Flickr. The “Above Ground” blog contains important IR information, including at the date of writing, a message from the CEO on the company sustainability program.
Finding relevant information on social media can be a problem. Twitter has hashtags and they are often useful in finding investor related information. All the media have search engines. But some of the companies help out by providing indexes and customized search facilities. Seimens is a good example of this in their use of Youtube. That company provides playlists that classify the video content by topic. For example, the playlist for industrial productivity should be of interest to investors.
LinkedIn is a favourite social media for business professionals and one that can be used effectively for investor relations. Strangely, it has not yet achieved the level of use for IR that Twitter and Facebook have. However, some companies maintain corporate sites on LinkedIn and they do often have notices such as earnings releases and conference calls. An example of this is Agrium Inc.
Social media is fast becoming a significant component of IR communications. Twitter is the most critical at this point, with Youtube and Facebook important runners-up. As Social IR develops over the next year or two, we will see a lot of innovation in this field.