Case studies of companies using social media in their day-to-day IR activities
Two recent surveys give very different answers on the use of social media in the IR bag of tricks. In a survey of 371 IR professionals, the Bank of New York Mellon finds only 9 percent have actively adopted one or more social media channels in their IR mix, while fully 57 percent say they have no interest. At the other end, Q4 Web Systems, a Toronto-based IR web consultant, finds that 62 percent of 362 corporate/IR websites surveyed provide some social network option for investors.
While surveys can point to what’s hot and what’s not from 30,000 feet, IR magazine has sought out a few brave pioneers actively using social media to communicate with investors to get a street-level view.
Three themes emerge in our decidedly unscientific sample. First, effective use of social media can enhance your current IR effort. Second, it can extend your reach. And third, however you implement social media, you will have to adapt to the circumstances of your company, the needs of your audience and the realities of your market.
While the actual rate of adoption and specific channels employed may be up for debate, the two surveys are consistent on one point: it’s very much a one-way conversation from the company to investors.
Whether it's blogs, vlogs (video blogs), Twitter, Facebook, SlideShare, or another outlet, the new tools are used primarily to extend one-way communication from the company out to investors. Cyberspace has supplemented, rather than replaced, the telephone attached to the side of your face and the ubiquitous face-to-face meetings where investors and management have traditionally done business.
A normal part of the mix
Kristy Harris, senior financial consultant at Dell, and the point person for keeping DellShares, the company’s social media blog and vlog space for investors, fresh and up to date, sees the effort ‘as a logical extension of what we’re doing already’.
Dell, as a heavily followed and highly visible tech company, uses a variety of channels to efficiently manage the information flow. In addition to the blog site, the company provides a really simple syndication (RSS) feed for press releases, Facebook, LinkedIn, and Twitter and YouTube posts.
They launched DellShares about three years ago, in part to proactively address issues the company knew were on the minds of investors, Harris says. ‘How do we address the larger base, instead of taking one-off calls?’ she asks rhetorically. Recurring questions Dell hears from a recent roadshow or investor conference, for example, can be addressed in a blog post on DellShares.
The firm posts quarterly earnings vlogs with its CFO, and uses blogs and vlogs to update the street on new products and reinforce key strategic initiatives. Over the past year, Dell has posted three separate executive interviews, each focused on one element, or ‘pillar’, of the company’s strategy.
Recognizing that some institutional investors’ internal firewalls block access to sites like YouTube, Dell also posts transcripts of the vlogs. In fact, some investors prefer being able to read the transcript rather than having to watch a video, Harris reports.
The process for updating DellShare content is folded into the company’s regular disclosure process and thinking, she adds: ‘We’re using situational judgment every day, asking how we would we handle this information in a phone conversation or face-to-face meeting.’
More than half the buy side and sell side following Dell report that they actually read the blogs and watch the vlogs, Harris says, calling that ‘a pretty good response rate’. Dell also benchmarks its social media effort against peers, and is often asked for advice from other IROs. ‘We feel like we’re at the forefront at this time,’ she explains.
Once you start, however, you have to keep the cadence up, Harris cautions. ‘You can’t wait and post something three months here and six months there,’ she says, stating that you have to commit the time and resources to keep the content fresh and up to date.
Standing out from the crowd
As an American living and working in China, Douglas Menelly, IRO at electronics manufacturer SinoHub, uses social media to stand out from other China-based companies that have NYSE listings and build credibility with US institutional investors.
‘We are trying to reach globally focused, sophisticated investors, wherever they may be. It is not easy to get US investors to travel to Shenzhen, China, to tour our facilities,’ Menelly comments. As a US-listed company with all its operations and employees in China, ‘there is roughly 10,000 miles between our operations and our investors,’ he adds.
‘While YouTube, Facebook and Twitter would be great solutions… these sites are unfortunately blocked by China’s ‘Great Firewall’,’ Menelly points out. Even so, he posted a virtual video tour on YouTube, which has received a positive response from his North American investors. The company website is hosted in China, so the videos also reside on a local Chinese version of the video-sharing platform, which means China-based stakeholders also have access.
Perhaps Menelly’s greatest use of social media is in networking with other IR colleagues around the globe: he recently sought advice on how to launch and announce the video tours from IR colleagues on LinkedIn.
Rebuilding credibility
With Alberta, Canada-based TVI Pacific’s gold and copper mines located thousands of miles away in the Philippines, IRO Rhonda Bennetto faces a similar geographic challenge as Menelly, without some of the restrictions on social media.
When she joined the mining company two years ago, it had an almost exclusively retail – and poorly informed – investor base, no analyst coverage and misperceptions about the company born of previous overly optimistic statements from management.
To help address those issues, Bennetto deployed a set of social media tools, adding RSS feeds for press releases, a company Facebook site and Twitter feeds, as well as SlideShare and YouTube portals to rebuild credibility, attract institutional investors and bring the operations in the Philippines closer to her North American investor base.
Bennetto also uses SlideShare and YouTube videos to tell more complex technical stories and showcase some of the company’s community development and environmental efforts in the Philippines.
The effort has paid off – as a recent roadshow in New York demonstrated – in building an institutional buy-side following that is better informed and closer to the story, although she is still challenged by a lack of research coverage, Bennetto says.
Open shop
Patrick Kiss, head of investor and public relations for Hamburg, Germany-based Deutsche EuroShop, is experimenting with several different social media tools for the company, which owns shopping centers in Europe. ‘We use Facebook, Flickr, SlideShare, Twitter and YouTube, TwitPic, Skype, LinkedIn, XING and Wikipedia,’ Kiss says. The firm is evaluating other channels as they emerge.
Describing SlideShare as a must-have because of the very high numbers of views within a short time for presentations, Kiss has also been surprised that nearly one quarter of an admittedly small number of Facebook ‘friends’ are analysts or investors. ‘Okay, we only have 52 friends so far,’ he admits, but calls it ‘a very good ratio’.
Kiss acknowledges that the use of social media by investors and journalists ‘is more passive than active. We set up the channels and try to engage, but it obviously still takes time to establish those channels and real dialogues.’
Because the management team at Deutsche EuroShop is so small (a total of six including two executive board members), it is not heavy on process or policy.
He and one other colleague ‘have full control of what we publish on social media channels’. Kiss recognizes that larger companies ‘definitely should have clear policies and rules in place and all employees should be trained,’ but admits that at Deutsche EuroShop ‘we do this on the fly’.
