Something has changed. Communication and information sharing is becoming faster, more direct, and more interconnected. At the same time, with the prevalence of high-speed trading, equities are changing hands in microseconds while computers do most of the trading. Likewise, shorter-term investment horizons are becoming the norm with fickle shareholders moving in and out of positions with little to no warning.
These technological developments and market trends continuously shape and redefine the role of investor relations as a strategic communications function. A main challenge of an IRO in this new and ever-changing reality is maintaining a thorough understanding of a company’s stakeholder base. Whether the stakeholders are institutional or retail investors, analysts, local communities, government agencies, or other parties, IROs must resourcefully communicate to a wide-ranging audience in the most transparent and effective way possible.
As it is unlikely that the role of technology in information sharing will diminish or that trading will meaningfully slow down, IROs must adapt to stay one step ahead. Social media presents an opportunity for IROs to be more proactive in their communication strategy, providing channels that get information in front of key audiences quickly, broadly and easily. Moreover, truly listening to ‘social chatter’ is an often overlooked but essential tool in recognizing market trends, sentiments and even potential crises that can be addressed and resolved long before they escalate. In essence, an effective social media program acts as PR for your stakeholder base. IROs know that good and timely communication increases brand recognition, goodwill and, ultimately, market value.
Let’s take a look at some of the ways social media can be harnessed to maximize your investor relations strategy.
Listen and understand
Social media is an excellent tool for judging sentiment and detecting patterns in online discussions. Listening to what investors, industry experts, journalists, analysts and regulators have to say about your company, peers and industry will allow you to remain cognizant of the trends and issues your audience cares about most. Furthermore, having a thorough understanding of how you are perceived by the masses will allow you to devote resources appropriately while aligning messaging and content strategies with the values and opinions of your stakeholders.
To gather a fulsome understanding of how the investment community views your company, it is important not just to monitor conversations about your stock specifically, but also all of the topics that define it, for instance:
- Any alternate business names or misspellings;
- Company board of directors, management team and other key personnel;
- Top shareholders;
- Industry and sector news;
- Industry peers; and
- Industry associations and regulators.
If you think you need even more comprehensive social media monitoring and analytics, there are a number of professional social media listening tools available to help discover insights as well as provide metrics and analytics. A few examples are:
- Meltwater Buzz
- Sysomos
- Sprout Social
- Trendkite
Encourage and contribute
Now that you are listening to what your online community has to say, the next step is to use these insights to encourage and increase the volume of positive discussions about your company. Being an active participant on social media will allow you to cultivate a relationship with your audience, building credibility and trust. Here are some tips:
- Customize your company’s social media profiles with logos, taglines and colours that are consistent with corporate branding to increase brand awareness and recognition.
- Spot trending topics and ‘discussion starters’ to stimulate conversations and ensure that the information you share resonates with your audience.
- Identify and (if appropriate) engage with influencers, those who shape opinions among their networks by actively sharing ideas and information. Typical influencers include financial journalists, bloggers, NGOs and activists.
Consistent social media participation will indicate to your audience that the company welcomes open discussion. And when established successfully, in times of crisis your stakeholders will look directly to the company via these channels for information and clarification.
Manage and resolve
Finally, an effective social media program will allow an IRO to identify and reduce the quantity of misaligned messages. While the prevalence of social media has greatly increased our ability to connect with one another, it has also been the cause of many rumours. The amount of misinformation circulating on social media is astonishing and whether active or not, nearly all public companies receive mentions and discussions between users that are posted for mass consumption. In times of breaking news, it is usually the online community that gains traction in creating and exchanging information, rather than the official company or news channel.
However, if you can recognize early chatter surrounding an issue, you have the opportunity to address it before it spirals out of control. Whether it be writing a blog post clarifying the issue at hand, updating website content or issuing a press release, quickly (yet thoughtfully) responding to a misperception will help quiet down the chatter and steer your stakeholder to the company for information. Bear in mind, though, that this process should be thoroughly detailed in either the company’s social media policy or crisis communications policy (or both) and approved by all relevant company personnel ahead of time.
At a time when key audiences change rapidly and without warning, utilizing different channels of communication is vital to staying in touch with all stakeholders. Communication is a two-way street. Recognizing the importance of insights and feedback received from stakeholders, as well as finding the right balance, response and flow to your social media communication, takes time but definitely pays off.
Erin O’Toole is the Investor Relations Analyst at NOVAGOLD in Vancouver.