AMID the hype that often surrounds the use of social media in investor relations comes a new survey that provides a valuable dose of reality on the adoption of new media by European investment professionals.
The joint survey by Deutsche EuroShop AG and DVFA, the society of investment professionals in Germany, finds that industry professionals still rely heavily on traditional disclosure channels like email (79%) and the mainstream business media (71%), while 86% view information provided via social media as being less important relative to other channels.
However, the survey of 74 mostly German investment professionals also finds that more than half (53%) of the respondents expect new media such as blogs and social networking sites to play an increasingly important role in investment decisions in the future. And a slim majority (51%) say they would likely use social media platforms if CEOs, CFOs and IROs used them to engage with the investment community.
Meanwhile, 31% said they have read information posted on a blog that prompted them to investigate an issue further for their work, while 22% said information on social networks had prompted them to do so.
74% spend more than 2 hours online per day
The survey also provides valuable insights into current technology usage among European investment professionals, finding that almost three-quarters (74%) spend more than 2 hours online each day. Interestingly, most of the respondents use more than one web browser, with Internet Explorer (73%) being the most popular followed by Firefox (52%).
While desktop computers (84%) and notebooks (71%) are the most common hardware used, 56% report using a smartphone, of which 56% own BlackBerrys and 30% iPhones. iPads are used by 14% of respondents.
Asked which information sources have become more important to them in recent years, 71% said mainstream online business media, followed by real-time subscription services like Bloomberg and Reuters (55%).
Blogs, message boards and chatrooms were rated increasingly important by 15% and social networking sites by 16%, trailing even business print media, which was rated by 18% as having increased in importance.
Reliability and relevance of new media doubted
The primary reason for investment professionals to say they don’t use new media is a perceived lack of reliability, cited by 52%, and a lack of relevance, mentioned by around 35%. Less than 20% of the respondents said their firms do not allow them to access new media sites.
In a blog post commenting on the results, DES AG’s head of investor relations Patrick Kiss said: “The survey participants commented that they don’t want to be pushed or forced to use social media. They fear the “noise” on social media most and they are afraid that they are currently not able to filter this noise.”
The most commonly used social network for professional purposes is Xing (49%), a European professional social network similar to LinkedIn (31%). Asked which social networks they would like companies to communicate through, 62% said “none.”
Trailing US counterparts
The findings of the survey suggest that European investment professionals are less enthusiastic about social media than their US counterparts.
As we reported in March, a survey by American Century Investments found that 86% of the US respondents have a business or personal social media profile, while 77% said they planned to use social media for business purposes mostly to monitor and share news and commentary.
The full European survey results are embedded below: