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The Evolving Role of Social Media for Investor Relations

Updated on June 11, 2014

The Reality is for the most part public companies have not stayed ahead of the online marketing boom. Rather, they rely on tried and true methods of circulating investor relations materials i.e. Editorials, Press Releases, Newsletters and Media blasts.

A noteworthy shift is taking place. The reach of the online marketing industry renders anyone who spends time networking through a computer a potential investor. That is, the online public becomes the target audience of an Investor Relations campaign. Furthermore, the divisions between Media Relations, Public Relations and Investor Relations become vitally interwoven as gradually Media Relations becomes a means through which companies can access the online public, a large portion of whom will translate to investors if the public company is intelligent about their online branding.

Social Media is a component of Online Marketing that contributes to the formation of Online Communities. An online community is a collection of a public companies target audience that is genuinely interested in building a relationship with the brand or company. The benefits to building such an online community as a portal of IR are innumerable. To list off a few of these benefits:

  1. Quantifiable Analytics: Social Media Strategy is quickly developing into a finely tuned science. The engage-ability of a post can be predicted based on measureable, quantifiable trends that include components like keywords and visuals. When it comes to IR, nothing is as important as being able to measure the influence of your Press Release. The very structure of your company depends on it.
  2. Ease of Access: Put simply, Social Media Marketing continuously builds your target audience, collects them into one platform and offers companies the ability to engage with them on new levels including personally, corporately, and culturally. All online, all in one place, and all reactions are measurable.

The Challenges

Knowledge: Quite simply there’s a hefty learning curve to navigating the world of online marketing. There are a variety of ways online marketing can be utilized for corporate advantage and a specific strategy should be developed that reflects each corporation’s unique goals and identity. Not a lot of investor relations specialists are versed in the online marketing trends. It’s an industry is relatively new and has only recently started to transcend stock market trends. Further, there’s a good amount of skepticism and confusion about how building an online corporate identity can result in capital gains. The statistics are slowly being gathered, however, and an undeniable association is being made.

Attitudes: There is an undeniable generational gap between the seasoned investors who are slowly reaching retirement age and the up-and-coming tech-savvy generation. The attitudes of these two generations of investors couldn’t be more different. That is, aging seasoned investors speak a language that is considered exclusive to the investing industry. This language is laden with thick financial lingo and tends to focus on the numerical realities of a public companies progress-that is, the hard facts. The language of the younger generation is based on much more sensory experiences. That is, the new age of investors considers elements of a public company that were previously labelled unimportant to the analytically focused generation of investors before them. New-elements of consideration include: brand identity (how does investing in a company make the investor look?), what is the public company trying to accomplish? What does the sustainability of the public company’s venture look like? Analyzing the shift in attitudes could provide enough content for an entirely new blog post however in general the new generation walks a fine line between their desire for immediate gratification and their concern for the long term effects of a transaction. The attitudes of up and coming investors must be understood by Investor Relations Specialists if they expect to generate interest in their ventures.

Public Companies are slowly making the shift towards building and capitalizing on an Online Community. Check out our case study on a company that is pioneering this initiative here.

Interested in reading more: This article by Rachel Bowman dives deeper into the discussion. Explore it here.

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