According to Edelman Digital and Financial, the SEC isn't the only regulator taking notice of social media. FINRA and the Federal Financial Institutions Examination Council have proposed regulations that require companies to have concrete social media processes and documents for IR practices. All of a sudden, social media for investor relations is moving to the mainstream - IROs can no longer ignore these channels and need to find a way to incorporate them into their communications strategy. How do you determine which channel to prioritize? A recent study by the Stanford Graduate School of Business and the University of Michigan reports that Twitter is IR professionals' new technology of choice for breaking firm news. Particularly for smaller companies, Twitter can play the role of an equalizer by allowing them to make up for lack of media exposure by communicating via social media. And the study results prove that social media isn't just fluff - Twitter has helped companies achieve more market liquidity for their stocks.
All this can overwhelming - there's a ton of information out there about the merging of investor relations and social media. Based on these two articles and my work at Northwestern University, here are three action items you should implement immediately. They are:
- Get the Word Out - The SEC allows social media disclosure only in cases where investors are aware of the company's policy, so let your investors know that you will be disclosing material information via social media. The more transparent you are with investors, the less potential for regulatory backlash. Issue a press release, update your website, and/or organize a conference call to share your new policy.
- Optimize Your Channels - As is the case with all corporate communications, you need to develop a unique IR strategy for each of your social media channels. If Twitter is your primary source for disclosing material information, make that clear to your investors so they're not visiting your Facebook page for news. If you're planning on using all your social media channels for material news, make sure you have a plan for disclosing information simultaneously across channels. It's not enough to have one uniform strategy for all your social media channels - monitor your investors' online behaviors and strategize accordingly.
- Be Bold, Explore Multimedia - Most companies are still struggling to learn "social IR" so this is an opportunity to stand out and be a leader in communicating to investors in innovative ways. Why restrict yourself to Facebook and Twitter when investors are also using YouTube, Google+ and LinkedIn? Exploring multimedia social channels beyond Facebook and Twitter will make media and investors take notice. Multimedia messages are a more effective way of reaching your investors across multiple touch points and telling a compelling story.
While the SEC's new rule on social media disclosure is still new and confusing, there are many concrete steps that companies can take to communicate more transparently with investors and get ahead with their "social IR" strategy.
Godhuli Chatterjee is a full-time Masters student at @NorthwesternU's Integrated Marketing Communications program @MedillSchool. Prior to her studies, she worked in financial communications at a leading global public relations firm. She is passionate about investor relations, financial communications and social media marketing. Follow her at @gchatter.