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Using Social Media for Investor Relations: Two sections to be careful about

👤 🕔 May 3, 2013 0

 

The usage of social media has been on the rise since the April 2nd SEC announcement that social media channels can be “Regulation FD-compliant means of communicating material non-public information”.
Although these are very good news, Investor Relations, PR and Marketing people should still be careful about what is being posted on the social media sites. They should specially take notice of two things:
• The public is correctly notified of the use of a certain channel for the purpose of communicating that type of information.
• All social media “posts” should be clear.

Usage of correctly notified channels

For the first point, this has implications on who can share the information. There should be one Twitter, Facebook, Google+, etc. account that will be in charge of disseminating the information, and a person who knows about the rules should control this.
The problem would arise when executives of the company misunderstand this ruling and start “Tweeting” or “posting” information in their personal accounts (which have not been notified to the public as a channel used for the purpose of communicating that information). IR, PR, Marketing and Legal departments should work together in order to decide who would be in charge of making these updates, getting this person or team up to date on all the new rulings, and train other members of the company on what they can and can’t share via Social Media platforms.

Social Media is about being brief, but be careful.

Social media is a great tool for conveying information because of two main aspects: it is real-time and concise. By disseminating information through social media, investors are always up to date and because of the nature of social media to be concise, they don’t have to read a lot in order to know the information.
This doesn’t come without a price, the real time nature of social media, means that there is no opportunity to “proof read”. If a mistake is made, the information is already out there and even if deleted shortly after, chances are someone has already seen it.
The conciseness of social media can also be a problem. For example the usage of twitter, limits the company to convey information in 140 characters, therefore in such a small piece of real state it might be difficult to convey a complete idea. A solution might be to separate the message in different tweets, but we have to also take into account that user will read and share these tweets separately. At the end of the day each tweet should convey an idea and not leave space for confusion. In terms of Blogs, a company might be interested in summarizing a press release, earnings call, etc. through this medium, if this is done we would advice to include a link to the complete document in order to avoid any confusion.

At the end of the day, the company needs to be sure that they are combining the benefits from social media while still being compliant with securities commission’s rules. We believe that with creative thinking and constant communication, any company can reap the benefits of using social media to convey information to investors.

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