Patrick Kiss, Head of Investor & Public Relations at Deutsche EuroShop AG, submits for discussion:
Social media usage for investor relations is still in its early stages and I don’t want to seem a skeptic – far from it – but I’m honestly a little disappointed in how things are progressing.
Even though social media has been a hot topic of discussion in the IR community since at least 2009, it’s my view that not much progress has been made. Yes, the big IR associations have done seminars with early adopters, but often these have been consumed with endless discussions about the needed capacities and benefits of social media.
Yes, it’s now accepted wisdom that companies should at least monitor what is being said about them in social media. It’s also accepted that investors will and should inform themselves via a broad mix of channels, including social media. And blogs, Twitter, Facebook, YouTube, SlideShare and others are widely accepted platforms for information exchange and dialogue.
But there is something missing.
While an increasing number of companies are establishing social media programs for IR purposes, the target groups are very rarely actively participating on them, because they mainly follow passively. That’s especially true, in my experience, if the companies are not global consumer brand names but rather operate in specialist industries.
There are exceptions like TVI Pacific, which runs an active discussion forum on Facebook, and there is some interaction between companies and investors on specialized services like Seeking Alpha and StockTwits, but the activity is largely concentrated in North America.
In fact, I now worry that for some companies and their IROs the topic of social media for investor relations will have an “empty disco” effect. The channels for engagement are available, investors and analysts are informed about them, but they’ll look at the deserted dance floor and not want to be the first ones in if no one else is participating.
Meanwhile, companies that have already set up a social media presence will increasingly question if it still makes sense to be there. Perhaps they should just step back and watch, too.
To move social media for investor relations forward we must start to push engagement or active participation rather than merely monitoring or broadcasting information. Of course, engagement will bring a new dimension to social media. It will be more difficult, with new discussions, ideas, arguments, views and questions. This might cause some companies to step back to simply monitoring the conversation, which would be the wrong decision in my view. Every use of social media for investor relations should have a sustainable approach.
The bottom line, from my perspective, is that for progress to be achieved in investor relations in social media, monitoring is not enough. Engagement is necessary — and all members of the financial community should take part.
This is a very subjective impression, I have to admit, and I don’t have any statistics, but maybe we can share different views in a discussion.