Investor Relations and Social Media

Reaching
Shareholders
Online:
Trends
and
Best
 Practices
in
Online
Communication
and
Social
 Media
in
Corporate
Investor
Relations

 Presented
by
David
A.
Hogan,
APR
 Instructor,
Abilene
Christian
University
 The
2009
Annual
Conference
of
the
International
 Association
of
Online
Communicators,
Washington,
D.C.,
 October
1‐2,
2009

 About
the
Presenter
 Dave
Hogan,
APR,
is
experienced
in
corporate
communications
 and
investor
relations.

He
has
served
as
an
investor
relations
 officer
for
three
U.S.
public
companies.

Hogan
currently
splits
 his
time
between
teaching
public
relations
in
the
Department
 of
Journalism
and
Mass
Communication
at
Abilene
Christian
 University
in
Texas
and
working
as
director
of
investor
relations
 and
corporate
communications
for
First
Financial
Bankshares,
 Inc.
(Nasdaq:
FFIN).

Active
in
the
National
Investor
Relations
 Institute
for
more
than
a
decade,
Hogan
is
a
member
of
the
 Dallas/Fort
Worth
NIRI
chapter
and
is
a
co‐founder
and
former
 officer
of
the
Greater
Charlotte
(N.C.)
NIRI
chapter.

He
is
an
 accredited
(APR)
member
of
the
Public
Relations
Society
of
 America,
treasurer
of
the
Abilene
Public
Relations
Organization
 and
active
in
the
Texas
Public
Relations
Association.


 For
more
information,
see
Hogan’s
profile
on
LinkedIn
at

 http://www.linkedin.com/in/dahogan76
or
follow
him
on
 Twitter
@dahogan.

 Reaching
Shareholders
Online:
Trends
and
Best
 Practices
in
Online
Communication
and
Social
 Media
in
Corporate
Investor
Relations

 A
revolution
is
taking
place
in
how
organizations
communicate
 with
their
target
audiences,
both
internal
and
external.



The
 transition
in
organizational
communications
that
began
with
 the
advent
of
the
World
Wide
Web
and
the
popularity
of
 broadband
Internet
service
took
a
giant
leap
forward
earlier
 this
decade
when
several
new
online
services
appeared
for
the
 first
time,
including
Myspace
(2003),
Facebook
(2004),
 YouTube
(2005)
and
Twitter
(2006).


Collectively,
these
and
 similar
new
services
came
to
be
known
as
“social
media.”

 Communications
consultant
Merrie
Spaeth
has
described
the
 impact
of
social
media
as
being
even
more
significant
than
the
 advent
of
earlier
new
communications
tools
such
as
radio
and
 television
(Spaeth,
2009).


 This
paper
focuses
on
how
online
communication
tools,
and
especially
social
 media,
are
changing
the
communication
practices
of
corporate
investor
 relations
departments
at
public
companies
of
all
sizes.

It
also
examines
the
 question
of
why
corporate
investor
relations
departments
have
been
slower
 to
adopt
social
media
communications
tools
than
their
counterparts
in
other
 corporate
communications
specialties
and
in
marketing.
 While
numerous
academic
studies
exist
on
the
role
of
corporate
Web
sites,
 the
issue
of
how
social
media
is
impacting
investor
relations
practices
has
 not
been
explored
in‐depth
in
academic
research.


This
is
most
likely
due
to
 the
newness
of
this
phenomenon
and
the
relatively
few
examples
of
early
 adaptors
available
for
study
until
recently
among
public
companies.


 Appropriately,
many
of
the
most
valuable
sources
for
information
for
this
 study
came
from
social
media
itself,
especially
from
bloggers
who
write
in
 this
space
and
from
Twitter
messages
(including
valuable
links
to
online
 resources).


Social
media
sharing
tools
including
Delicious
and
Slideshare
 also
played
a
valuable
role
in
assembling
this
research.


 The
Role
of
Communications
in
Investor
Relations
 The
National
Investor
Relations
Institute,
the
 
largest
professional
organization
in
the
world
 
for
investor
relations
officers,
defines
investor
 
relations
as
“a
strategic
management
responsibility
that
integrates
 finance,
communication,
marketing
and
securities
law
compliance
to
 enable
the
most
effective
two‐way
communication
between
a
 company,
the
financial
community,
and
other
constituencies,
which
 ultimately
contributes
to
a
company's
securities
achieving
fair
 valuation”
(NIRI
2003).


It
is
important
to
note
the
emphasis
on
 “communications”
and
“marketing”
in
this
definition.

Investor
 relations
officers
are
inherently
and
inextricably
communicators,
no
 matter
what
their
previous
academic
or
career
backgrounds
may
have
 been.


Nearly
a
fourth
of
all
NIRI
members
engaged
in
corporate
 investor
relations
work
came
from
career
backgrounds
in
corporate
 communications
or
public
relations,
second
only
to
“corporate
 finance”
as
a
career
background
(NIRI,
2008).
 The
Role
of
Communications
in
Investor
Relations
 (continued)
 
Of
special
interest
to
this
study,
the
NIRI
definition
describes
the
role
 of
investor
relations
as
“to
enable
the
most
effective
two‐way
 communication
between
a
company,
the
financial
community,
and
 other
constituencies.”

Online
communication,
and
in
particular
social
 media,
is
ideally
suited
to
helping
investor
relations
officers
fulfill
this
 mission.

Social
media
excels
in
offering
two‐way
communication
 channels
and
provides
investor
relations
officers
with
a
promising
 new
platform
for
full
disclosure,
transparency
and
dialogue.



 Based
on
this
definition,
one
might
expect
investor
relations
 departments
to
have
enthusiastically
and
whole‐heartedly
embraced
 social
media
tools
to
help
them
better
achieve
their
objectives,
but
 such
has
not
been
the
case.
 Investor
Relations:
Letting
Others
Take
the
Lead
 The
evidence
is
clear
that
investor
relations
is
slow
in
joining
the
 social
media
party.

A
recent
study
of
the
Fortune
100
companies
in
 the
United
States
conducted
by
McKenna
Partners
found
that
“very
 few
companies
are
delving
into
social
media
for
IR”
(McKenna
2009).


 An
informal
survey
of
270
investor
relations
officers
and
chief
 financial
officers,
conducted
earlier
this
month
by
Bulldog
Reporter’s
 IR
Alert,
found
that
only
12.5
percent
of
respondents
use
social
media
 to
disseminate
financial
information
to
shareholders
and
the
financial
 markets.

Large
companies,
defined
in
the
study
as
those
with
$500
 million
or
more
of
annual
sales,
fared
even
worse.

Only
three
percent
 of
large
companies
use
social
media
as
part
of
their
investor
relations
 communications
(Bulldog
Reporter,
2009).
 Investor
Relations:
Letting
Others
Take
the
Lead
 (continued)
 An
academic
study
earlier
this
year
confirmed
that
other
institutions
are
 outpacing
corporations
in
adopting
social
media.

Nonprofit
(charitable)
 organizations
and
academic
institutions
have
both
embraced
blogs
and
 other
social
media
tools
at
a
higher
rate
than
have
corporations.

More
 than
half
(57
percent)
of
all
large
charities
use
blogs,
compared
with
41
 percent
for
colleges
and
universities
and
only
16
percent
for
Fortune
500
 corporations
(Barnes
and
Mattson,
2009).



Further,
only
28
percent
of
the
 corporate
blogs
linked
to
Twitter
accounts,
21
percent
linked
to
corporate
 videos
and
only
10
percent
linked
to
podcasts
(Barnes
and
Mattson,
2009).


 Investor
Relations:
Letting
Others
Take
the
Lead
 (continued)
 This
reluctance
on
the
part
of
investor
relations
departments
to
pursue
social
 media
is
all
the
more
surprising
given
that
the
primary
target
audiences
for
 investor
relations
‐‐
institutional
investors
and
analysts
‐‐
are
using
social
 media
tools
for
both
business
and
personal
reasons.


Intuitively,
institutional
 investors
and
analysts
would
seem
to
be
ideally
suited
for
social
media.

They
 are
highly
educated,
affluent
and
very
mobile.

Blackberry
or
iPhone
use
is
 almost
universal
among
this
crowd.


Studies
confirm
the
interest
of
 professional
investors
in
social
media.

The
Brunswick
Group,
for
example,
 surveyed
455
analysts
and
institutional
investors
in
July
2009
and
learned
 that
nearly
half
(42
percent)
read
blogs
and
that
a
comparable
percentage
of
 the
respondents
said
they
have
followed
up
on
corporate
information
found
 on
a
blog.

Twenty
percent
of
the
respondents
said
information
on
a
blog
had
 contributed
to
an
investment
decision
or
recommendation.

Most
 respondents
(58
percent)
believe
social
media
will
become
increasingly
 important
in
helping
them
make
investment
decisions
(Joyce,
2009).


 Investor
Relations:
Letting
Others
Take
the
Lead
 (continued)
 Professional
investors
already
are
regular
users
of
corporate
Web
sites.

The
 SEC
acknowledged
this
fact
in
its
2008
update
and
even
said
that
“in
very
 limited
circumstances”
a
company’s
Web
site
could
serve
as
“a
standalone
 method
of
providing
information
to
investors
…
“
(SEC,
2008).

A
study
by
the
 Rivel
Research
Group
found
that
75
percent
of
institutional
investors
look
for
 information
on
corporate
Web
sites
“weekly
if
not
daily”
(Rivel,
2007).



 Darrell
Heaps,
president,
CEO
and
founder
of
Toronto‐based
Q4
Web
 Systems,
made
the
case
in
a
recent
blog
post
that
companies
need
to
 recognize
that
the
quality
of
their
investor
relations
Web
sites
and
social
 media
may
impact
reputation
and
stock
valuation.
 "Some
think
that
Web
sites
are
only
for
retail
investors,
and
if
you’re
largely
 held
by
institutions
then
the
Web
site
doesn’t
matter,”
Heaps
said.

“In
 today’s
market,
this
simply
isn’t
the
case.
Your
Web
site
and
how
you
use
the
 social
Web
have
a
direct
impact
on
your
company’s
reputation
and
in
many
 cases
the
value
of
your
stock"
(Heaps,
2009).
 Investor
Relations:
Letting
Others
Take
the
 Lead
(continued)
 Evidence
is
growing
that
institutional
investors
and
 analysts,
already
accustomed
to
searching
corporate
 Web
sites
for
information,
are
now
turning
to
social
 media.

A
host
of
new
online
and
social
media
 services
are
proving
appealing
to
these
investors.

 They
include
Seeking
Alpha,
which
aggregates
 articles
from
financial
blogs
and
newsletters
and
 claims
four
million
unique
users
per
month;
 StockTwits,
which
allows
investors
to
search
Twitter
 messages
using
stock
ticker
symbols;
and
Wikinvest,
 a
contributor‐driven
investment
research
site.


 Not
Yet
Convinced
 While
the
momentum
is
growing
for
greater
adoption
of
social
media
in
 investor
relations,
not
everyone
in
the
profession
is
convinced
of
its
value.

 Beth
Kurth,
president
of
Kurth
&
Company
and
a
former
investor
relations
 and
public
relations
director
for
a
public
company,
recently
said
in
an
online
 article
that
Twitter
does
not
have
a
place
in
investor
relations.

She
criticized
 Twitter
as
“time
consuming”
and
a
distribution
channel
that
fails
to
“meet
 the
demands
of
full
disclosure.”


 “Twitter
doesn’t
really
matter
to
IROs
because
it’s
social
media,”
Kurth
said.

 “And
by
definition,
social
media
is
not
business
media.

Rather,
it
is
a
media
 that
is
designed
to
be
used
by
friends,
pals,
buddies
and
social
acquaintances
 …
it
is
not
a
method
to
disclose
material
information
in
a
full
and
public
 manner”
(Kurth,
2009).


 Not
Yet
Convinced
 (continued)
 John
Palizza,
a
popular
investor
relations
blogger,
also
questioned
the
value
 of
social
media
in
a
recent
blog
post.
 “I
confess
that
Twitter
and
Facebook
have
me
stymied,”
Palizza
said.

“I
just
 don’t
get
it.

Twitter
because
I’m
incapable
of
saying
anything
in
140
 characters
or
less
and
Facebook
because
why
would
you
want
to
put
all
that
 information
out
there
in
the
public
domain?”
(Palizza,
2009).
 Both
Kurth
and
Palizza
received
a
barrage
of
comments
following
their
 articles,
indicating
the
intensity
of
interest
on
both
sides
of
this
topic
among
 investor
relations
practitioners.


 Legal
and
Regulatory
Concerns
 While
some
investor
relations
officers
say
they
are
holding
off
on
 implementing
social
media
programs
because
they
simply
do
not
yet
see
the
 value
of
social
media,
the
primary
reason
cited
for
investor
relations’
slow
 adoption
of
social
media
is
concern
about
legal
and
regulatory
issues.

 Investor
relations
officers
in
the
United
States
work
in
a
maze
of
regulations,
 primarily
from
the
U.S.
Securities
and
Exchange
Commission
but
also
from
 state
regulators
and
the
stock
exchanges
–
including
the
New
York
Stock
 Exchange
and
Nasdaq.

These
regulations
are
designed
to
protect
 shareholders
and
to
create
a
more
level
playing
field
in
terms
of
disclosure
of
 information
between
professional
and
retail
shareholders.

A
mistake,
such
 as
disclosing
non‐public,
material
information
in
a
manner
not
deemed
 appropriate
by
the
SEC,
can
explode
into
a
major
public
relations
scandal
for
 a
company
and
lead
to
shareholder
lawsuits,
fines
and
even
criminal
charges.


 Legal
and
Regulatory
Concerns
 (continued)
 “IR
is
trapped
in
a
box
of
regulations
and
legal
liability,”
Palizza
said
in
a
blog
 post.

“Moving
outside
the
box
requires
more
time,
effort
and
political
 capital
than
it’s
worth”
(Palizza,
2008).


By
nature,
blogs
are
supposed
to
be
 “quick,
spontaneous
and
resonate
with
the
voice
of
the
writer,
“
Palizza
said,
 all
of
which
is
difficult
to
do
in
a
traditional
investor
relations
environment
 that
emphasizes
extensive
internal
review
and
tight
control
over
every
 document
that
is
released.


 Brian
Solis,
principal
of
FutureWorks,
a
public
relations
and
new
media
 agency
and
an
advocate
for
using
social
media
in
investor
relations,
also
 pointed
out
the
inherent
pitfalls.
 “One
wrong,
irresponsible
or
casual
post,
comment,
tweet
(or)
status
update
 can
produce
a
domino
effect
of
consequences
that
have
yet
to
establish
 precedence,”
Solis
wrote
in
a
recent
blog
post.

“While
a
tweet,
for
example,
 may
seem
harmless,
the
activity
and
response
sparked
by
an
update
could
 result
in
repercussions
that
trigger
SEC
and
shareholder
retaliation”
(Solis,
 2009).


 Legal
and
Regulatory
Concerns
 (continued)
 
The
SEC
has
both
encouraged
public
companies
in
their
use
of
social
media
 and
continued
to
issue
warnings
about
the
possible
risks.

In
August
2008,
 the
SEC
issued
an
update
titled
“Commission
Guidance
on
the
Use
of
 Company
Web
sites.”

The
report
praised
the
role
of
online
communications
 in
“modernizing
the
disclosure
system”
and
“promoting
transparency,
 liquidity
and
efficiency
in
our
trading
markets.”

It
praised
the
Internet
for
 allowing
companies
to
make
information
available
to
investors
“quickly
and
 in
a
cost‐effective
manner”
(SEC,
2008).


 The
SEC
report
pointed
out
that
the
commission
was
an
early
promoter
of
 disseminating
corporate
and
financial
results
electronically
when
it
 implemented
its
Electronic
Data
Gathering,
Analysis
and
Retrieval
(“EDGAR”)
 system,
first
introduced
in
the
early
1980s.


Today,
all
public
companies
in
 the
U.S.
must
file
their
proxy
statement,
10‐K,
10‐Q,
8‐K
and
other
SEC
forms
 electronically
on
EDGAR
where
they
are
available
for
public
viewing
(SEC,
 2008).




 Legal
and
Regulatory
Concerns
 (continued)
 At
the
same
time,
the
2008
SEC
report
continued
to
sound
warnings
that
are
 sufficient
to
chill
the
enthusiasm
for
social
media
in
many
corporate
suites.

 It
cautioned
that
the
antifraud
provisions
of
federal
securities
laws
apply
to
 blogs
and
to
electronic
shareholder
forums
in
the
same
way
they
do
to
 traditional
forms
of
corporate
communication.


 “While
blogs
or
forums
can
be
informal
and
conversational
in
nature,
 statements
made
there
by
the
company
(or
by
a
person
acting
on
behalf
of
 the
company)
will
not
be
treated
differently
from
other
company
statements
 when
it
comes
to
the
antifraud
provisions
of
the
federal
securities
 laws”
(SEC,
2008).
 While
the
SEC
may
not
have
given
the
definitive
green
light
to
social
media
 that
some
investor
relations
officers
and
securities
attorneys
would
have
 preferred,
others
believe
the
SEC
is
showing
tolerance,
understanding
that
 corporations
are
in
a
time
of
transition,
trying
to
figure
out
the
best
ways
to
 use
the
newer
forms
of
online
communication
for
the
benefit
of
both
 corporations
and
their
shareholders.


 Legal
and
Regulatory
Concerns
 (continued)
 “The
SEC
is
not
looking
at
social
media
as
a
new
way
to
get
companies,”
said
 Serena
Ehrlich,
a
social
programs
officer
with
the
StartUp
Army,
in
a
recent
 webinar
sponsored
by
Q4
Web
Systems.

“They
just
want
to
make
sure
that
 Reg.
FD
(the
SEC’s
Regulation
Fair
Disclosure)
is
being
followed.”

Ehrlich
is
a
 long‐time
NIRI
board
member
who
is
active
on
Twitter
and
other
social
 media
platforms.

She
noted
that
the
SEC
has
not
filed
a
single
complaint
 against
any
company
stemming
from
its
social
media
programs,
despite
a
 wide
range
of
experimentation
that
is
going
on
among
the
first
wave
of
 companies
that
are
using
social
media
for
investor
relations
purposes
 (Ehrlich,
2009).
 There
is
broad
consensus
within
the
investor
relations
field
that
social
media
 is
a
supplement
to
existing
disclosures
and
won’t
replace
news
releases,
SEC
 filings
or
conference
calls
in
the
near
future,
if
ever.
 Legal
and
Regulatory
Concerns
 (continued)
 “You
should
do
social
media
on
top
of
what
you
are
already
doing,
not
as
a
 replacement,”
said
Carol
Stubblefield,
a
securities
and
corporate
law
 specialist
with
the
law
firm
of
Baker
and
McKenzie,
in
a
recent
webinar
 hosted
by
Business
Wire.

“Social
media
is
not
yet
widely
enough
 disseminated
to
be
a
primary
or
sole
distribution”
(Stubblefield,
2009).

 Stubblefield
also
emphasized
the
importance
of
establishing
social
media
 disclosure
policies
and
informing
employees
about
the
company’s
policy
 toward
their
use
of
Twitter,
blogs
and
other
channels
for
discussing
company
 business.

 Social
Media
Pioneers
 
 
 
 
 
 
Despite
the
ambiguity
of
the
legal
and
 
 
 
 
 
 
regulatory
issues,
a
small‐but‐growing
 
 
 
 
 
 
number
of
companies
are
venturing
into
the
 water
and
learning
to
integrate
social
media
tools
successfully
with
 more
traditional
investor
relations
approaches.

Within
this
group,
 Twitter
has
emerged
as
the
early
favorite
among
social
media
tools
 for
investor
relations,
thanks
to
its
simplicity
and
the
ability
to
link
 Twitter
messages
back
to
news
releases,
conference
call
 announcements
and
other
disclosure
information
on
the
company’s
 Web
site.


 Social
Media
Pioneers
 (continued)
 A
recent
study
by
Q4
Web
Systems
identified
80
public
companies
with
 Twitter
accounts.

More
than
half
(55
percent)
of
these
companies
are
using
 Twitter
for
investor
relations
purposes.

According
to
the
Q4
study,
these
 companies
use
Twitter
as
follows:
 •  68
percent
provided
a
link
to
their
earnings
release
only.
 •  7
percent
provided
a
link
to
their
conference
call
notice
only.
 •  11
percent
provided
a
link
to
their
earnings
release
and
notice
of
their
 conference
call.
 •  11
percent
provided
a
link
to
their
earnings
release
and
quarterly
 investor
webcast
only.
 •  7
percent
provided
a
link
to
their
conference
call
notice,
earnings
release
 and
webcast
(Q4
Web
Systems,
2009).


 Social
Media
Pioneers
 (continued) 
 A
handful
of
public
companies
in
North
America
go
much
further
with
their
 use
of
Twitter
for
investor
relations
purposes.

They
include
U.S.‐based
eBay
 and
Canada’s
CGI
Group.

Both
companies
send
a
series
of
“live”
tweets
 during
their
quarterly
conference
calls
with
investors,
following
release
of
 their
earnings.

In
effect,
they
have
become
internal
reporters,
“covering”
 the
conference
calls
and
reporting
the
results
to
the
world
via
Twitter,
140
 characters
at
a
time.
 “It
(Twitter)
is
a
new
way
to
reach
more
people
and
expand
our
audience,”
 said
Colin
Brown,
communications
and
investor
relations
specialist
with
CGI
 Group
(Brown,
2009).


 Social
Media
Pioneers
 (continued)
 
 Even
though
CGI
is
a
Canadian
company,
it
also
trades
on
the
New
York
 Stock
Exchange,
meaning
it
must
comply
with
U.S.
SEC
regulations.

In
an
 interview
for
this
research
paper,
Brown
said
the
company
is
not
worried
 about
its
use
of
Twitter
because
it
only
tweets
information
that
is
already
in
 the
public
domain
(Brown,
2009).

Brown
said
the
company
would
never
 send
a
news
release
first
on
Twitter
before
it
has
been
distributed
using
 more
conventional
means.

Even
the
tweets
during
the
conference
calls,
 which
may
appear
spontaneous,
are
typed
out
ahead
of
time
based
on
the
 wording
from
the
conference
call
script,
so
Brown
knows
he
is
only
posting
 words
on
Twitter
that
his
company
executives
are
saying
on
the
conference
 call.

 Social
Media
Pioneers:
CGI
Group
on
Twitter
 Social
Media
Pioneers
 (continued)
 At
eBay,
Richard
Brewer‐Hay,
senior
manager
of
corporate
communications,
 does
not
work
for
the
investor
relations
department
but
he
regularly
sends
 investor‐focused
content
on
Twitter
and
on
the
corporate
blog,
titled
eBay
 Ink.



Perhaps
more
than
anyone
else,
Brewer‐Hay
has
successfully
walked
 the
tightrope
of
complying
with
SEC
and
company
regulations
while
still
 maintaining
a
degree
of
irreverence,
personality
and
independence
as
the
 social
media
voice
of
eBay.


 When
he
first
came
to
eBay
two
years
ago,
Brewer‐Hay
said
he
was
 concerned
about
the
reaction
he
might
get
from
the
investor
relations
and
 legal
departments.


 “I
was
concerned
I’d
be
shot
down,”
he
said
during
a
recent
webinar.

To
the
 contrary,
Brewer‐Hay
said
both
departments
have
been
cooperative.

 Together,
they
have
developed
a
set
of
rules
to
guide
the
company’s
 unprecedented
exposure
on
Twitter
and
the
company’s
blog.


 Social
Media
Pioneers
 (continued)
 Prior
to
covering
an
investor
relations
conference
call
or
similar
event
on
 Twitter,
for
example,
Brewer‐Hay
first
sends
a
series
of
four
disclaimer
 tweets,
which
he
worked
out
collaboratively
with
eBay’s
legal
and
investor
 relations
teams.

The
disclaimer
tweets
are
as
follows:
 Tweet
one:
“Important
information
about
the
nature
of
this
session.

 Forward‐looking
statements
and
non‐GAAP
financial
measures.

Click
here.”
 Tweet
two:
“This
session
will
contain
non‐GAAP
financial
measures.”
 Tweet
three:
“The
presentation
of
this
financial
information
is
not
intended
 to
be
considered
in
isolation
or
as
a
substitute
for
GAAP
financial
measures.”
 Tweet
four:
“A
reconciliation
of
these
measures
to
the
nearest
comparable
 GAAP
measures
can
be
found
by
clicking
on
the
following
link.”
 Social
Media
Pioneers
 (continued)
 Brewer‐Hay
defends
the
use
of
Twitter

 to
cover
eBay’s
investor
conference
calls

 and
other
presentations.
 “It
expands
the
audience
and
adds
to
the
transparency,”
said
Brewer‐Hay
in
 a
webinar.

“Not
everyone
on
Twitter
is
going
to
listen
to
a
conference
 call”
(Brewer‐Hay,
2009).
 Social
Media
Pioneers:
eBay’s
blog
 Social
Media
Pioneers
 (continued)
 eBay’s
new
corporate
Web
site,
introduced
in
October
2009,

incorporates
 the
look
of
a
blog
and
offers
many
social
media
features.


 Social
Media
Pioneers
 (continued)
 The
variety
of
uses
for
Twitter
seem
almost
endless.

A
few
public
 companies,
including
Johnson
&
Johnson
and
EMC
Corp.,
have
used
Twitter
 to
report
about
proceedings
at
their
annual
shareholders’
meetings,
while
 eBay
has
used
Twitter
to
send
reports
about
“analyst
days,”
which
are
 invitation‐only
events
hosted
by
companies,
usually
at
their
headquarters,
 for
securities
analysts
and
institutional
investors.



 In
all
of
these
instances,
the
net
effect
of
Twitter
is
to
expand
the
reach
of
 traditional
investor
relations
activities
that
would
typically
attract
only
a
 relatively
small
audience,
thereby
enhancing
corporate

transparency.
 Social
Media
Pioneers
 (continued)
 Dell’s
IR
Blog
 One
of
the
most‐watched
social
media
developments
in
investor
relations
 has
been
the
Dell
Shares
blog,
launched
in
November
2007
by
computer
 maker
Dell,
Inc.,
and
believed
to
be
the
first
corporate
blog
dedicated
to
 investor
relations.

Nearly
two
years
later,
Dell
Shares
still
stands
virtually
 alone.

While
several
companies
place
investor
relations
information
on
 more
general‐purpose
corporate
blogs,
no
one
else
has
moved
as
boldly
as
 Dell
to
create
a
blog
focused
exclusively
on
the
company’s
investor
relations
 disclosures.




 “Our
job
is
to
communicate
information
so
investors
can
make
informed
 decisions,”
said
Robert
Williams,
director
of
investor
relations
at
Dell,
in
an
 interview
for
this
paper.

“Anyway
you
can
find
to
get
information
out
‘one
 to
many’
more
efficiently
is
a
good
thing”
(Williams,
2009).
 Social
Media
Pioneers
 (continued)
 Williams
described
blogs
as
a
“very
efficient”
channel
for
communicating
 with
investors.

Contrary
to
the
concerns
some
express
about
blogs,
he
said
 Dell
has
found
that
their
blog
actually
saves
staff
time
by
reducing
the
 amount
of
time
spent
on
the
phone
explaining
financial
results
and
other
 corporate
developments.

 “When
we
saw
how
effective
our
colleagues
(at
Dell)
were
in
 communicating
with
our
customers
and
other
constituents,
we
felt
it
was
a
 natural
extension
(to
use
a
blog
to
communicate
with
investors),”
Williams
 said.

“It’s
a
great
way
to
democratize
information”
(Williams,
2009).
 Social
Media
Pioneers:
Blogs
and
Video
 (continued)
 One
of
Dell’s
more
innovative
uses
of
its
Dell
Shares
blog
is
to
post
video
 interviews
(“Vlogs”)
with
key
company
executives.


Each
quarter,
Dell
 records
a
video
conversation
with
its
chief
financial
officer
to
announce
and
 explain
recently
disclosed
earnings
results.

Other
recent
videos
on
Dell
 Shares
include
interviews
with
the
Dell
executives
in
charge
of
sustainability
 and
small‐business
ventures.

Far
beyond
merely
posting
news
releases,
Dell
 uses
its
blog
to
provide
context
that
helps
investors
and
other
stakeholders
 better
understand
the
company,
its
strategic
direction
and
its
financial
 performance.


 Social
Media
Pioneers:
Dell’s
IR
vlogs
(videos)
on
Dell
Shares
 Social
Media
Pioneers
 (continued)
 Contrary
to
critics
who
say
analysts
and
institutional
investors
do
not
want
 or
use
social
media
tools
as
part
of
their
work,
Williams
said
Dell’s
 experience
is
that
institutional
investors
are
the
primary
audience
for
Dell
 Shares
(Williams,
2009).

 Williams
said
he’s
“surprised”
that
more
large‐capitalization
companies
have
 not
followed
Dell’s
lead
and
established
investor
relations
blogs.

In
a
recent
 interview,
Williams
cited
three
possible
reasons:

 • The
small
size
of
most
investor
relations
departments.

Unlike
Dell,
which
 has
seven
members
on
its
investor
relations
team,
the
average
company
has
 only
one
or
two
employees
dedicated
to
investor
relations.

 • 
A
lack
of
understanding
about
blogs.

Williams
said
many
corporate
 executives
worry
that
blogs
will
be
difficult
to
manage
and
that
they
won’t
 be
able
to
answer
users’
questions.
 • The
fear
of
disclosure
mistakes
and
shareholder
lawsuits
(Williams,
2009).
 Social
Media
Pioneers
 (continued)
 Williams
conceded
it
would
be
difficult
for
a
small
(one
or
two
person)
 investor
relations
department
to
manage
a
blog
along
with
all
the
other
 expected
tasks,
but
for
larger
companies,
he
listed
in
a
recent
webinar
 (Williams,
2009)
five
things
to
consider
before
starting
an
investor
relations
 blog:
 • The
blog
should
not
be
used
as
a
substitute
for
news
releases,
SEC
filings
 and
the
traditional
means
for
communicating
material
information.
 • It
must
be
credible
by
communicating
factual
and
accurate
information
and
 avoid
expressing
opinions
on
investor
issues.
 • It
should
be
strictly
for
investor
communications
and
should
not
be
used
 for
marketing
the
company’s
products
and
services.
 • An
IR
blog
can
be
an
effective
tool
to
counter
misperceptions
about
the
 company
without
responding
to
specific
market
rumors.
 • It’s
important
to
view
the
blog
not
only
as
a
means
for
distributing
 information,
but
as
a
way
of
listening
to
what
your
investors
are
saying
(Dell,
 2009).
 Social
Media
Integration
 Pioneering
public
companies
with
social
media
are
finding
they
can
 leverage
their
time
and
investment
by
coordinating
their
efforts
using
 multiple
social
media
tools
together.


Dell
and
eBay,
for
instance,
both
 use
Twitter
to
announce
new
postings
on
their
blogs.

Dell
posts
its
 Vlogs,
created
initially
for
the
Dell
Shares
blog,
on
YouTube.


This
can
 significantly
expand
the
audience
and
drive
more
traffic
back
to
the
 companies’
Web
sites
and
blogs.


 Dell’s
use
of
Twitter
for
Investor
Relations
 (continued) 
 Pioneering
public
companies
with
social
media
are
 finding
they
can
leverage
their
time
and
investment
 by
coordinating
their
efforts
using
multiple
social
 media
tools
together.


Dell
and
eBay,
for
instance,
 both
use
Twitter
to
announce
new
postings
on
their
 blogs.

Dell
posts
its
Vlogs,
created
initially
for
the
 Dell
Shares
blog,
on
YouTube.


This
can
significantly
 expand
the
audience
and
drive
more
traffic
back
to
 the
companies’
Web
sites
and
blogs.


 Social
Media
Integration:
Cisco
Systems
 Another
innovative
leader
in
using
social
media
for
investor
relations
 purposes
is
Cisco
Systems
Inc.

Like
Dell,
Cisco
produces
video
interviews
 each
quarter
featuring
corporate
executives
talking
about
the
recently
 announced
earnings
results.

Also
like
Dell,
Cisco
posts
its
investor
 relations
Vlogs
on
YouTube
to
expand
its
audience
and
tweets
on
Twitter
 when
new
videos
are
available.

Unlike
Dell,
however,
the
investor
 relations
department
does
not
manage
Cisco’s
corporate
blog,
titled
The
 Platform,
and
the
content
comes
from
a
variety
of
corporate
sources,
 not
just
investor
relations
(Cisco,
2009).


 Facebook,
LinkedIn,
Flickr
and
YouTube
 Initially,
far
more
companies
are
using
Twitter
for
investor
relations
 purposes
than
are
using
other
popular
social
media
sites
such
as
Facebook,
 LinkedIn
and
YouTube.


Facebook’s
blog‐like
qualities
and
social
networking
 power
make
it
a
popular
choice
for
many
companies,
but
so
far
most
of
 these
companies’
Facebook
pages
appear
to
be
managed
by
corporate
 communications,
public
relations
or
marketing
departments,
not
by
investor
 relations.

However,
that
is
not
to
say
Facebook
and
YouTube,
especially,
do
 not
have
their
roles
to
play
in
disseminating
corporate
investor
relations
 news.


Cisco’s
Facebook
page,
for
example,
carries
much
of
the
same
 content
as
its
corporate
blog,
including
the
quarterly
earnings
videos
and
 other
investor
relations
announcements.

Many
companies
include
links
 from
their
corporate
Web
sites
or
blogs
to
accompanying
information
on
 Twitter,
Facebook,
LinkedIn,
Flickr
and
YouTube.

The
major
loser
in
this
race
 appears
to
be
MySpace,
one
of
the
largest
U.S.‐based
social
networking
 sites.

During
this
research,
no
public
companies
were
identified
that
use
 MySpace
for
investor
relations
purposes.


 IR
Uses
for
Document‐Sharing
Sites
 Popular
sites
such
as
Twitter
and
Facebook
 may
steal
most
of
the
limelight
in
the
 discussion
about
corporate
uses
of
social
 media,
but
another
category
of
tools
is
proving
 to
be
of
significant
value.

These
are
 document‐sharing,
or
“content”
sites
that
 allow
investor
relations
officers
to
expand
the
 distribution
and
improve
the
display
of
existing
 types
of
corporate
documents,
such
as
news
 releases,
PowerPoint
presentations
and
SEC
 filings.


 IR
Uses
for
Document‐Sharing
Sites:
Slideshare
 One
of
the
more
popular
document‐sharing
sites
is
Slideshare,
which
 allows
companies
(and
individuals)
to
post
PowerPoint
presentations,
 PDFs
and
other
document
formats
on
a
public
site
where
they
can
be
 viewed.

Slideshare
is
growing
rapidly,
with
17
million
monthly
visitors
 and
50
million
monthly
page
views.
Heaps,
of
Q4
Web
Systems,
 described
Slideshare
in
a
recent
webinar
as
“the
YouTube
of
 presentations”
(Heaps,
2009).

His
company
has
been
one
of
the
first
to
 incorporate
Slideshare
into
corporate
investor
relations
Web
sites,
 including
Barrick
Gold
Corp.

 IR
Uses
for
Document‐Sharing
Sites:
Slideshare
 Heaps’
analogy
to
YouTube
is
on
the
mark.

Like
YouTube,
what
makes
 Slideshare
powerful
is
that
information
can
be
easily
shared.

To
use
 YouTube
terminology,
Slideshare
makes
it
possible
for
a
company’s
 PowerPoint
presentation
to
“go
viral”
and
be
spread
from
investor
to
 investor,
either
via
e‐mail,
embedding
on
a
blog
or
Web
site,
or
through
 a
host
of
other
sharing
tools.


While
it
is
not
likely
that
any
company’s
 next
quarterly
earnings
presentation
is
going
to
get
millions
of
hits
like
 some
of
the
more
popular
videos
on
YouTube,
Heaps
said
it
is
possible
 for
a
company
to
double
its
normal
presentation
viewership
using
 Slideshare.


 IR
Uses
for
Document‐Sharing
Sites:
DocStoc
 Docstoc
is
similar
to
Slideshare,
although
its
emphasis
is
not
on
PowerPoint
 presentations.

Companies
are
using
Docstoc
to
place
a
variety
of
content
 online,
including
news
releases,
which
can
then
be
shared
by
readers
or
 embedded
on
their
Web
sites
and
blogs.




 IR
and
Social
Media:
Looking
Ahead
 Social
media
has
the
power
to
help
investor
relations
officers
fulfill
one
of
the
key
 objectives
of
their
trade,
“to
enable
the
most
effective
two‐way
communication
 between
a
company,
the
financial
community
and
other
constituencies”
(NIRI,
 2009).


Social
media
can
provide
an
added
dimension
and
depth
to
the
 conversation,
as
perhaps
seen
best
with
eBay
and
Dell,
while
allowing
investor
 relations
officers
the
opportunity
to
both
talk
and
listen
to
their
shareholders,
 analysts
and
other
constituents.

Aside
from
the
potential
need
for
additional
 staffing
in
smaller
investor
relations
departments,
the
cost
of
using
most
social
 media
tools
is
nominal.


 The
voices
speaking
in
favor
of
using
social
media
as
part
of
the
investor
relations
 communications
mix
are
growing.
 “The
benefits
of
communicating
to
investors
with
corporate
social
media
and
 interactive
data
are
highly
attractive,”
said
Steve
Carr,
managing
director,
Dresner
 Corporate
Services,
in
a
recent
article.

“Corporate
social
media
and
interactive
data
 (are)
definitely
on
the
way,
and
to
some
extent
(are)
already
here.

The
time
to
 prepare
is
now”
(Carr,
2009).
 IR
and
Social
Media:
Looking
Ahead
 Jeff
Morgan,
president
and
CEO
of
NIRI,

 recently
urged
all
investor
relations
to
get

 familiar
with
social
media
skills,
whether
 
they
currently
plan
to
use
them
in
their

 work
or
not.
 “We
need
to
understand
these
communications
vehicles,”
Morgan
said.

 “It’s
incumbent
for
any
IR
person
to
try
blogging,
Twitter
and
using
social
 mediums
to
bring
the
discussion
back
to
the
company.

Become
an
expert
in
 it”
(Morgan,
2009).

 IR
and
Social
Media:
Looking
Ahead
 Heaps,
through
his
work
at
Q4
Web
Systems,

 his
company
blog
and
frequent
speaking
events

 at
NIRI
meetings,
has
emerged
as
a
champion
for

 using
social
media
for
investor
relations.


 “Disseminating
information
through
traditional
channels
and
making
 financial
statements
available
in
one
format
are
no
longer
enough,”
Heaps
 said
in
a
recent
blog
post.

“The
world
is
adopting
social
media
in
record
 numbers
…
Adding
social
channels
to
distribute
information
…
will
increase
 your
audience
reach,
empower
people
to
engage
with
your
company
and
 give
them
a
better
understanding
of
your
investment
proposition.”
(Heaps,
 2009).


 IR
and
Social
Media:
Looking
Ahead
 If
many
of
the
arguments
now
being
used
by
critics
against
social
media
 sound
familiar,
then
that
is
because
they
are
some
of
the
same
arguments
 used
in
the
1990s
when
corporate
Web
sites
first
began
to
be
used
for
 investor
relations
purposes.


At
that
time,
some
critics
said
investors
and
 analysts
were
not
interested
in
accessing
corporate
information
online.

We
 now
know
that
is
not
the
case.


Others
raised
concerns
about
the
impact
of
 adding
the
responsibility
for
investor
relations
Web
sites
onto
the
workloads
 of
limited
staffs.

Still
others
preferred
to
maintain
the
status
quo
and
did
 not
fully
appreciate
the
potential
for
investor
relations
Web
sites
as
a
 communications
tool.



Today,
just
a
decade
later,
it
is
hard
to
imagine
how
 any
corporate
investor
relations
department
functioned
without
a
robust
 Web
site.
 IR
and
Social
Media:
Looking
Ahead
 (continued)
 Social
media
is
here
to
stay.

It
marks
a
revolutionary
change
in
how
 organizations,
both
private
and
public,
communicate
internally
and
 externally.

No
company
today
can
totally
ignore
social
media.

At
the
very
 least,
it
is
necessary
for
all
companies
to
monitor
comments
about
them
 and
their
industry
online,
including
in
social
media.


Only
by
doing
so
can
 they
be
aware
of
misinformation
or
rumors
that
may
be
spreading
online
 and
that
could
impact
their
stock
performance.


 IR
and
Social
Media:
Looking
Ahead
 (continued)
 A
growing
number
of
investor
relations
officers
already
understand
the
 potential
of
social
media,
and
it
may
be
only
a
matter
of
time
before
social
 media
tools
become
as
mainstream
as
Web
sites
and
conference
calls
in
 modern
corporate
investor
relations
work.


 The
SEC
could
encourage
this
development
by
providing
more
definitive
 instructions
to
guide
companies
as
they
chart
their
way
through
these
new
 waters.


Those
instructions
would
help
eliminate
the
most
worrisome
 objection
to
the
use
of
social
media
at
this
time,
the
fear
of
regulatory
and
 legal
risk.


Hopefully
the
SEC
will
partner
with
NIRI,
the
stock
exchanges
and
 other
interested
parties
to
develop
practical
guidelines
for
the
use
of
social
 media
in
corporate
investor
relations
practice.
 #
#
#
#
#
 References
 •  Barnes,
N.G.,
&
Mattson,
E.
(2009,
April
22).
Nonprofit
organizations
lead
the
 way
in
social
media
adoption
according
to
Society
for
New
Communications
 Research
Chair
Dr.
Nora
Ganim
Barnes
and
Eric
Mattson
of
Financial
Insite,
 Society
for
New
Communications
Research.

Retrieved
from
 http://sncr.org/2009/06/28/nonprofit‐organizations‐lead‐the‐way‐in‐social‐ media‐adoption‐according‐to‐society‐for‐new‐communications‐research‐chair‐ dr‐nora‐ganim‐barnes‐and‐eric‐mattson‐of‐financial‐insite/
 Brewer‐Hay,
R.
(2009,
September
17).

Monitoring
social
media
for
investor
 relations,
webinar
sponsored
by
Q4
Web
Systems.

Retrieved
from
 http://www.q4blog.com/2009/09/18/webinar‐replay‐–‐monitoring‐social‐media‐ for‐investor‐relations/
 Brown,
C.
(2009,
August
20).

Telephone
interview.


 Bulldog
Reporter’s
IR
Alert
(2009,
September
17).

Survey
reveals
investor
 relations
professionals
slowly
embrace
social
media,
especially
smaller
 companies
–
and
which
IR
blogs
they
read.

Retrieved
from
 http://www.iralert.com/ME2/Sites/dirmod.asp? sid=9545E49F1F9042C48E6DBCF5610426C5&nm=IR+Technology +Update&type=Publishing&mod=Publications%3A% 3AArticle&mid=8F3A7027421841978F18BE895F87F791&SiteID=9545E49F1F904 2C48E6DBCF5610426C5&tier=4&id=C81A7BA8FEB749EBA5BB3700C6010620
 •  •  •  References
 •  eBay.com
(2009,
March
6).

New
social
media
guidelines
for
reporting
company
 information.

Retrieved
from
 http://ebayinkblog.com/2009/03/06/new‐social‐media‐guidelines‐for‐reporting‐ company‐information/
 Ehrlich,
S.
(2009,
September
17).

Monitoring
social
media
for
investor
relations,
 webinar
sponsored
by
Q4
Web
Systems.

Retrieved
from
 http://www.q4blog.com/2009/09/18/webinar‐replay‐–‐monitoring‐social‐media‐ for‐investor‐relations/
 Heaps,
D.
(2009,
July
1).

Q4
Web
Systems
introduces
social
media
and
XBRL
to
 investor
relations
Web
sites.

Bulldog
Reporter’s
IR
Alert.


Retrieved
from
 http://www.iralert.com/ME2/Sites/dirmod.asp? sid=9545E49F1F9042C48E6DBCF5610426C5&nm=IR+Technology +Update&type=Publishing&mod=Publications%3A% 3AArticle&mid=8F3A7027421841978F18BE895F87F791&SiteID=9545E49F1F904 2C48E6DBCF5610426C5&tier=4&id=904DFFF8A09F46529EFA4732D1FE0C32
 Joyce,
S.
(2009,
September
23).

Institutional
investors
and
analysts
increasingly
 using
blogs
and
social
networks
for
research.

Message
posted
to
the
Q4
Blog,
 http://www.q4blog.com/2009/09/23/institutional‐investors‐and‐analysts‐ increasingly‐using‐blogs‐and‐social‐networks‐for‐research/
 •  •  •  References
 •  Kurth,
B.
(2009,
September
23).

Don’t
believe
the
hype:
Twitter
doesn’t
matter
 to
IROs,
Bulldog
Reporter’s
IR
Alert.

Retrieved
from
 http://www.iralert.com/ME2/Sites/dirmod.asp? sid=C72F51EDD8C248ABBD0B2AD3521017C5&nm=Full +Disclosure&type=Publishing&mod=Publications%3A% 3AArticle&mid=8F3A7027421841978F18BE895F87F791&SiteID=9545E49F1F904 2C48E6DBCF5610426C5&tier=4&id=A39E6F40BAB740E49DFEA7CB05A18631
 McKenna,
Francine
(2009,
August
21).

Investor
relations
and
Web
2.0.
Re:
The
 Auditors.

Retrieved
from
 http://retheauditors.com/2009/08/21/investor‐relations‐web‐20‐2/
 Morgan,
J.
(2009,
July
8).

Obama’s
regulatory
tsunami,
possible
Reg
FD
 crackdown,
social
media
shifts:
NIRI’s
Morgan
blows
the
whistle
on
pending
 threats
to
IROs

‐‐
and
offers
timely
coping
tips,
Bulldog
Reporter’s
IR
Alert.

 Retrieved
from
 http://www.iralert.com/ME2/Sites/dirmod.asp? sid=9545E49F1F9042C48E6DBCF5610426C5&nm=Thought +Leader&type=Publishing&mod=Publications%3A% 3AArticle&mid=8F3A7027421841978F18BE895F87F791&SiteID=9545E49F1F904 2C48E6DBCF5610426C5&tier=4&id=B9BCFD112D9449038E0280F9540CBB37
 National
Investor
Relations
Institute
(2003,
March).

Definition
of
investor
 relations.

Retrieved
from
http://www.niri.org/FunctionalMenu/About.aspx

 •  •  •  References
 •  National
Investor
Relations
Institute
(2008,
April
7).

NIRI
releases
summary
 results
of
inaugural
NIRI
–
Korn/Ferry
International
IRO
compensation
study.

 Retrieved
from
 http://www.niri.org/Main‐Menu‐Category/resource/publications/Executive‐ Alert/2008‐Executive‐Alerts/2008‐Comp‐Study.aspx
 Older,
Stephen
E.
(2009,
September
16).

Corporate
disclosure:
The
Twitter
 effect.

Law.com
Legal
Technology.

Retrieved
from
 http://www.law.com/jsp/legaltechnology/PubArticleFriendlyLT.jsp? id=1202433819094
 Palizza,
J.
(2009,
September
1).

Investor
relations
and
social
media.

Messag
 posted
to
the
Investor
Relations
Musings
blog.

Retrieved
from
 http://investorrelationsmusings.blogspot.com/2009/09/investor‐relations‐and‐ social‐media.html
 Palizza,
J.
(2008,
June
16).

Blogging
and
investor
relations.

Message
posted
to
 the
Investor
Relations
Musings
blog.

Retrieved
from
 http://investorrelationsmusings.blogspot.com/2008/06/blogging‐and‐investor‐ relations.html
 Q4
Web
Systems
(2009,
August
26).

Public
companies
and
their
use
of
Twitter
for
 investor
relations:
An
analysis
of
corporate
reporting
using
social
media.”

 Retrieved
from
http://www.q4blog.com/about/research‐reports/
 •  •  •  •  References
 •  Solis,
Brian
(2009,
July
9).

Social
media
and
the
SEC:
Where
do
you
stand
in
the
 investor
broadcasting
vs.
investor
relations
debate?
Bulldog
Reporter’s
IR
Alert.

 Retrieved
from
 http://www.iralert.com/ME2/Sites/dirmod.asp? sid=C72F51EDD8C248ABBD0B2AD3521017C5&nm=Full +Disclosure&type=Publishing&mod=Publications%3A% 3AArticle&mid=8F3A7027421841978F18BE895F87F791&SiteID=9545E49F1F904 2C48E6DBCF5610426C5&tier=4&id=70B80636A5964A88AB1C152FA1BA744B
 Stubblefield,
C.
(2009,
July
30).

Press
releases,
public
companies
and
social
 media:
What
to
do?”

Webinar
sponsored
by
Business
Wire.


 U.S.
Securities
and
Exchange
Commission
(2008).

Commission
guidance
on
the
 use
of
company
Web
sites
(SEC
Release
Nos.
34‐58288,
IC‐28351;
File
No.
 S7‐23‐08).


Washington,
D.C.
 Williams,
R.
(2009,
September
1).

Telephone
interview.


 Williams,
R.
(2009,
August
14).

Keep
your
friends
close
&
your
enemies
closer:
A
 lesson
on
social
media.

Webinar.


 •  •  •  •