Sonja Galton, Agnico-Eagle Mines Ltd.
Merriam-Webster defines a paradox as “something (such as a situation) that is made up of two opposite things and that seems impossible but is actually true or possible”. At first blush that was certainly the consensus among my colleagues as we chatted one evening.
I had tossed out a challenge to name the first thing that came to mind when I said the words ‘investor relations’ and ‘social media’ together. The responses were fast and furious, and all the same: they don’t belong together!
And on the surface that seems all too true and obvious.
On one hand, you have a field that is carefully regulated and centered on the consistent and controlled release of specific data sets and information to very clearly defined audiences.
On the other hand, you have social (or digital) media – a communications medium where reach and speed trump almost everything else and where trying to exert control over your carefully crafted messages (even as you’re being forced to relinquish control of them) becomes an exercise in frustration and a possible liability.
Those initial responses reflect what I suspect many of us in investor relations grapple with in trying to strike the right balance. We need to serve our existing audiences reliably and with integrity. However, we also need to stay current with emerging technologies to accommodate and encourage the new generation of analysts, brokers and shareholders because of the future they represent. But we don’t want to achieve this at the expense of exposing our organizations to additional risk as a result of our choices.
Is there a case for doing the digital thing?
Recently, Darrell Heaps, CEO of Q4 Web Systems and a frequent blogger on the convergence between investor relations and social media, and Jason Golz, Director of the Brunswick Group, held an online discussion on the Brunswick Group’s latest survey: Trends in the Use of Digital and Social Media by the Investment Community.
In reviewing the survey results, I found no real surprises. The overall percentage of analysts who list digital media as one of their top three influential media sources is still extremely low at 14% in 2012. What was interesting to see, though, was that this number had more than doubled in only two years’ time, up from 6% in 2010.
Geographically speaking, investors in Asia were shown to be leading the way in both choosing to interact digitally with companies and taking action based on the information they derive from digital sources.
When asked whether they saw the role of social media in the investment decision process increasing, the majority agreed and their responses were consistent across the globe: 52% in the United States, 56% in Europe and 61% in Asia.
Perhaps the most intriguing statistic was the emergence of micro-blogging services (Twitter, for example) as an information source that spurs investors to further investigate issues in the course of their work. Up from only 11% in 2010, the use of micro-blogs as an information source prompting further research jumped to 28% in 2012.
This upward trend is evident to varying degrees throughout the study, with overall usage and reliance on digitally published information showing small but steady gains. It’s this forward momentum that highlights inevitability, which companies and investors alike are starting to see: they must begin to participate in social media activities in some way.
So how do you find the right fit?
This is where people will tell you it gets complicated! Determining how to best use the staggering array of digital channels is a decision that leaves even some of the most stalwart proponents of technological advancement stuck in ‘analysis paralysis’. It’s a situation where you can quite literally analyze yourself into a stalemate.
Use common sense – it’s not one size fits all!
Similar to our previous discussion on implementing a social media policy, once again taking a step back and allowing common sense to guide you will win the day.
When I'm asked for my opinion on social media’s status as the 'be-all and end-all' of future communications I like to ask the following question: if you’re selling Depend® incontinence products (Kimberly-Clark Corporation, NYSE: KMB) is it a safe bet that Facebook wouldn’t be your marketing communications channel of choice?
Is the question a bit cheeky? Perhaps. But you see my point. If we simply take a few moments to reflect on the nature of our companies and the businesses we are in, the process of elimination alone can make identifying viable digital opportunities less daunting.
Now, speaking from the perspective of a mining company, one of the early wins we’ve had is, interestingly enough, with Facebook. But not in the way you might think.
By their nature, mining organizations are typically geographically dispersed, with employees making their homes in a wide variety of far-flung places. Thus, one of the inherent challenges is building and maintaining employee cohesiveness and a unified spirit.
For Agnico-Eagle, Facebook became an unofficial external company-hub that was then quickly adopted by the company and made an official channel. This service is where employees, and indeed mine sites, will often opt to send each other good wishes and congratulations, whether related to winning Mine Rescue competitions, participating in hockey tournaments, or achieving health and safety milestones.
Another benefit is that employees who can’t access Facebook from work, either because they are underground or hold other jobs where access to the Internet is not commonplace, can easily check in from home in the evening and join the festivities.
Over time we have noticed steadily increasing engagement and the numbers bear out the viability of this channel, for this particular purpose, for us.
Of course, this approach isn’t without risks. It almost goes without saying that the common sense rule must be applied before assuming that your company should take this approach.
Those at high risk of being ‘spammed’ (flooded with annoying, tedious and irrelevant postings) or worse, ‘flamed’ (vigorously and often erroneously disparaged through posts made by special interest groups or individuals with an axe to grind) might find Facebook on their ‘easily eliminated’ list, as the amount of time to moderate and oversee this channel may far outweigh any benefits.
Benefits and measures…and the need for another column!
All of this brings me nicely to my next point and some questions that still require answering before we decide to take the leap and join the digital revolution: What exactly are the benefits? And more importantly, how do we measure the results?
Should we be attempting to apply a standard return on investment type of metric to our efforts? Or is it possible that the use of social media should be handled as more of a price-of-entry activity – a cost of doing business in the future?
Stay tuned for the answers in the next edition of IR leader!
Sonja Galton is Web and Communications Specialist at Agnico-Eagle Mines Ltd. in Toronto.