It’s Time to Face Social Media for Investor Relations

“But social media for investor relations won’t work for my company!”

The use of social media is radically changing the way our society communicates – and the investment community is no exception.  But many investor relations officers still refuse to use social media as an IR tool.  I’ve heard any number of reasons why “social media for IR won’t work for my company.”  Our business model is primarily B2B.  The retail shareholder base is small.  Our market cap is less than $500 million.  My corporate counsel tends to be conservative regarding disclosure.  Notwithstanding the huge volume of research that supports the use of social media in IR, I think it would be easier to land a lunch with Warren Buffett than to convince the typical IRO to set up a Twitter account.

I recently spent a whirlwind of a week focused on social media in investor relations.  The NIRI Westchester Connecticut chapter invited me to serve on a panel discussion entitled, “Investor Relations and Twitter – To Do or Not to Do?” with Darrell Heaps, president & CEO at Q4 Websystems (@darrellheaps), Dan Dykens, co-president at Meet the Street (@meetthestreet), and Doug Chia, senior counsel & assistant corporate secretary at Johnson & Johnson (@dougchia).   I was pleased to see that more than half the room had at least been on Twitter.  Two questions seemed to preoccupy the audience:  “what should we know about using Twitter,” and “how can we use it as part of an effective IR strategy?”

Twitter is important, but it’s far from the only way to use social media as an IR messaging tool.  Given the wide range of social media platforms – each with its own etiquette and user ecosystem – the easy, low-risk way for an IRO to get started is to set up a social media monitoring program to keep track of conversations that are going on about the company on the Internet.  Several tools are available to help organize and streamline the monitoring process.  SMA has listed some of them in a handout, which can be accessed here.

A social media monitoring program will uncover who is talking about the company; the industry journalists who are on Twitter; the influential bloggers; traders who are sharing stock tips; competitors’ social media practices; potential customers;  employees’ usage, and other kinds of useful information.   A comprehensive social media monitoring program also should keep tabs on the practices of companies with an established social media presence, like Cisco.  (More about Cisco below.)  Understanding how similar companies are using social media makes it easier to take the next step, which is to determine what combination, if any, of the social media platforms (blog, Twitter, Facebook, video, etc.) will best support the company’s IR program.

Earlier that same week, NIRI’s Boston chapter hosted a “Social Media Debate” moderated by Serena Ehrlich (@serena), SVP Social Media at Startup Army and featured an expert panel that included Laura Graves, director, global investor relations at Cisco, Adam Feuerstein, senior columnist at (@adamfeuerstein), and Megan Gates, attorney at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.   There certainly was truth in the title here as a lively debate ensued. 

Cisco has successfully incorporated social media into its outreach program through a corporate blog, video posts on YouTube, Twitter and a Facebook page.  Their strategy is to leverage existing content and public statements by repurposing them via social media to strengthen or “clarify” the company messages.  For example, when announcing a new product, Cisco will post answers to its most anticipated questions on the website and direct incoming inquiries to that page.  They report that this strategy has noticeably reduced the number of incoming calls after an announcement.

Ms. Graves was presented with a variety of questions and statements from IROs concerned that this strategy could get them in trouble with the SEC.  One participant questioned why Cisco would not include the information from any anticipated questions in the news release, while another shared concern about clarifying messages via the blog.

It’s important to note that Cisco’s market cap is $150 billion.  What works for a large cap might not necessarily work for a smaller company.  Another hurdle might be convincing management and legal counsel that implementing a social media strategy is necessary and worth the risk.  This may be easier said than done, so we recommend maintaining a “social-media clippings book” of content found online, such as tweets or blog posts that mention the company.  The sheer number of mentions likely to turn up will support the need to develop some type of formal social media program – if only for defensive purposes, initially. 

Finally, before creating a corporate IR presence on social media platforms, it’s important to implement a social media disclosure policy with clear employee usage guidelines.  It can be an eye-opening experience for companies to discover what their employees are sharing about their business online.

Social media may seem intimidating at first, so a monitoring program is a good place to start.  What you find may surprise you.

Dennis Walsh (@DWalshIR)
Senior Associate & Social Media Specialist

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Filed under Crisis Communications, Social Media, Speaking Engagements

12 responses to “It’s Time to Face Social Media for Investor Relations

  1. Pingback: Tweets that mention It’s Time to Face Social Media for Investor Relations « The Podium --

  2. Scott Treacy

    Great work, very informative. More posts about the use of social networking sites for companies (i.e. Cisco) would be very beneficial. What issues arise or serious hazards can they see on the horizon? Also does this make the publication process more efficient? Anyways Thanks for the post.

  3. Dennis – nicely done. As you know, I agree that IROs cannot dismiss social media as something more appropriate to their PR colleagues. Along those same lines, it’s not right for everyone – in other words, you aren’t going to “miss the boat” if you don’t employ social media tools. It really depends on what your programmatic goals are and if/how social media tools can help you to achieve them.

  4. You’re right; listening is a great place to start because it delivers a solid sense of the conversations that are happening, what people are saying (good, bad or indifferent) about your brand or products, where the conversations are happening, and who’s leading these conversations. Armed with this intelligence, companies can make smarter decisions on whether to invest the time and effort in social media and, as important, determine where to focus.


    Mark Evans
    Director of Communications

  5. References to not one but two IR + SocMedia articles in the past hour via #IR tag. Thank you.

    Monitoring and observing how social media functions is very important to developing one’s one company strategy — for any size company. My head is spinning with ideas right now on how I/we can demonstrate to IR agencies (and individual IROs) the tools to monitor feeds with a few clicks and set ups.

    Companies will also need to understand that the investor relations sections of their website will require some re-tooling to ‘pull’ AND ‘push’ content. This might also save some money on the pre-programmed services that have been in use for the past 10-15 years. Additionally, the ability to deliver content for mobile devices should be in-play as well.

  6. Don Allen

    While it’s all well and good to monitor the social media, it can be precarious to have C-level execs participate in social media. Lots of issues. Check this blog item from my NIRI-KC friend Dick Johnson, at IR Cafe ( He refers to a blog item on Mashable about that topic, with an interview with the president of Forrester Research in Boston. Some interesting practical and legal points are made in the blog. It’s worth checking out

  7. Use of social media in investor relations is the way things will be done in the future for smaller companies too. More and more investors are using Google and if one’s company can’t be found, they are missing an opportunity. Skillful and proper use of social media platforms along with optimized website/news releases can go a long way in increasing a company’s presence on the Internet.

  8. Pingback: Cisco IR and Social Media, A Love Story « Hannah Getz's Blog

  9. really thanks for such an informative and usefull post,but as we all know that More and more investors are using Google and if one’s company can’t be found, they are missing an opportunity.companies will also need to understand that the investor relations sections of their website will require some re-tooling to ‘pull’ AND ‘push’ content.

  10. Pingback: What Makes for a Successful Investor Relations Program? | The Podium

  11. How have I only just found this? Great write-up guys!

  12. I can not understand the defensiveness. Especially in this business information is relevant. What exactly are the real fears of the companies?

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