I recently had the opportunity to sit on a panel to discuss social media and investor relations. The event was put on by the NIRI Cleveland chapter in downtown Cleveland. The panel consisted of myself and Matt Lehman – Web Experience Director at Progressive.com and was moderated by Chuck Hemann,Research Manager for Dix and Eaton.

The following post is what I consider to be the top 5 points from the session:

1. There is no longer a line that separates social media and the rest of the web. Social media defines the online experience. 2/3rd of people use social networks and regularly blogs. The social aspects of the web can now be seen everywhere. If you are considering a web strategy, it MUST include the social web because that is where the market is.

2. Social media is not just about Twitter and Facebook. From an IR perspective it is about how these social technologies have impacted financial portals and social investing/trading networks. Sites like Seeking Alpha, Wikinvest and StockTwits along with the 1000s of financial blogs and countless emerging services have transformed equity research and the financial media. This is not just about retail investors. Institutional investors are increasingly using web based services to supplement traditional systems. The bottom line is that news breaks first on Twitter. For more evidence, Bloomberg recently included StockTwits to their service.

Also, 75% of institutional and professional investors visit your investor site on a daily or weekly basis. Some think that websites are only for retail investors, and if you’re largely held by institutions then the website doesn’t matter. In today’s market, this simply isn’t the case. Your website and how you use the social web have a direct impact on your company’s reputation and in many cases the value of your stock.

3. The risk of social media exists whether you participate or not. Individuals now have a voice that is as loud as your company. Financial bloggers, tweets, etc. can spread rumors at an alarming rate. So it is essential to monitor the conversations to ensure what is being said is true. Negative issues can potentially erode value in your brand and even your stock within a short period of time – and issuing a press release in response is not enough to deal effectively. Social networks have a wider reach as they can spread messages over a wider audience in a shorter period of time, than traditional channels alone.

The reality is, by not participating and using these channels you are exposing your company to a higher level of risk. At a base level, you need to be monitoring to see what’s being said. However, to reduce risk you need to be using social channels to communicate.

4. Establish your “voice of authority” across the web.
You need to know when your company is being discussed and should you decide to engage (either directly or indirectly) you need to be able to use the same channels to interact. Twitter, Facebook, Slideshare, YouTube, etc. are key social channels to supplement any communications strategy. The key is to establish these as channels of communication so when the time comes to respond to the market you have experience and processes in place, and know how to use them.

Only share content that has been previously disclosed. This will keep you on side of RegFD. In essence, anything that exists on your website is fair game to share through social channels.

5. Social media does not create content, it amplifies it. Content will always remain king. Social media allows your content to be found by many more people. Posting a quality presentation on slideshare.com and embedding it on your site (in our experience) at least doubles the visibility of that presentation.

The investor website is more important now than ever – using it effectively to tell your investment story and make connections with investors remains paramount. As your content becomes viral and is disseminated across the web, each time it is re-sent, increases the ability of users to link back to your site.

Videos, presentations, slideshows and well structured content are essential to maximizing the exposure obtained from using social channels.

Examples of companies actively using social media:

Rio Tinto on Twitter: Rio Tinto uses Twitter for general corporate updates, particularly around their corporate site. This includes letting people know of new video or other content, telling them where key documents will be placed and when, and giving advance notice of important dates coming up such as the AGM. We recently did an interview with Rio Tinto on Q4’s Blog. You can read it here.

Agnico-Eagle Facebook: Agnico-Eagle uses Facebook fan page to provide news and updates from their corporate site as well as pointing users to various 3rd party information, such as articles on Seeking Alpha, video interview on Mad Money, etc.

Finally, we recently released a report on how public companies are using Twitter for investor relations. The report includes details on over 80 companies that were included in the report. Further details can be found on our blog at: http://www.q4blog.com/about/research-reports/.

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