Best Practices Guide to Successfully Navigating Social Media for Publicly-Held Companies

January 16, 2014

By Serena Ehrlich, Director of Social + Evolving Media

We are excited to share our latest guide for investor relations and corporate communication professionals outlining the steps they should take (and avoid) to both engage and manage their reputation across social channels.

Business Wire Benefits of SM for IROs

This report details the opportunities and risks of using social media as both a research and communication tool in today’s investor relations programs.  Included are 12 ways investor relations professionals can leverage social media tools for a stronger, more effective engagement program, as well as 12 reasons why social media platforms are not compliant communication tools.

Embracing social media as a news sharing and engagement tool

Business Wire continues to advocate utilizing social media channels to amplify the visibility of company news.  These channels, designed to enhance the communication between organizations and their members, are perfect for brand advocacy.

Business Wire’s guidance for running a successful and legally compliant socially oriented investor communication program include:

  • How to spot an emerging crisis or reputation attack using social media monitoring
  • The importance and impact of multimedia to analysts and other key constituents
  • Real time communications, or why live tweeting earnings works so well
  • Ways to initiate and expand third party sharing of pertinent company information increasing the visibility and authority of your news

Avoiding social channels as a sole means of sharing financial or disclosure oriented news

For the last 4 months, we have taken a long hard look at the concept of utilizing social media distribution channels for financial disclosure.  While we are obviously big fans of utilizing social media as a tool to share news and information, the technology simply is not there yet for these channels to replace traditional disclosure platforms.

Business Wire’s guidance on why social media platforms are not appropriate as the sole method of disclosure includes:

  • Potential coverage limitation
  • Lack of visibility of social updates
  • The impact and risk of message modification
  • Social network demographics and usage rates

To download this free guide in its entirety, visit http://go.businesswire.com/social-media-for-financial-disclosure
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Want to schedule a time to speak with a Business Wire sales representative about social media, news distribution and disclosure compliance?  Let us know!


Investor Communications vs. Social Disclosure on Social Media

October 22, 2013
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By Thomas Becktold, Senior Vice President, Marketing
The Wall Street Journal’s Ben DiPietro (@BenDiPietro1) recently filed a story, “The Dos and Don’ts of Social Media Disclosure.” Not surprisingly, we have something to add.
Ben interviewed E. Terrell Gilbert Jr., an attorney at Arnall Golden Gregory LLP, who provides some solid advice to IROs, like this, “Where I think companies are prone to slip up is if focus solely on the new ways to communicate with investors but forget the basics of disclosure.”
Where the article falls short is that it doesn’t distinguish between investor communications and disclosure on social media. It doesn’t address ownership issues of executives’ personal social media accounts that are used for investor communications. It also lumps investors into a single homogenous group, where IROs know that buy-side and sell-side investors have significant differences in their preferred communications platforms and content.
While Gilbert rightly suggests that a CEO should send out a tweet that includes a link to a press release to provide more detail about the company, he mixes up disclosure and investor communications.Here’s why: the press release is the disclosure, not the CEO’s tweet.
The press release would be filed as an 8-K, issued on the wire and posted to the company’s website to ensure full and simultaneous distribution and access to all market participants. The CEO tweet is an additive part of investor communications, providing an opportunity for the CEO to more directly engage audiences, not unlike an open earnings conference call.
Gilbert notes that if companies want social media to be the first place they make market-moving information public, they should “take the right steps to let investors know the CEO’s Twitter account or Facebook page is the recognized channel of distribution…” I’m not a lawyer, so I don’t dispute the accuracy of what he says, but from a communications perspective, there are a lot of problems here.
First, if you’re going to establish an executive’s personal social media account as a disclosure channel, you better lock down some written ground rules to protect the company. If the executive leaves, does he take his channel and the followers with him? Is it ok for the executive to mix in personal posts (“look at my kid’s new puppy!”), photos and comments that may be of no interest to investors?
The National Investor Relations Institute’s Southern California chapters recently had a panel discussion on “The Future of Investor Communications.” I was fortunate enough to be on that panel with Ben Claremon, a research analyst at Cove Street Capital. That discussion provided a microcosm of the varying needs of investor constituents. Claremon was clear that he did not want companies using Twitter, Facebook or other social channels to disseminate material news. As he put it, investing and investor communications is serious business, and using the latest social channel “trivializes what we are doing.” He wants relevant information via trusted channels in a timely manner.
As we’ve discussed before, social media was not designed for disclosure, does not provide simultaneous delivery to all market participants and is often loaded with non-relevant content. Your followers or readers don’t see every post from their followers.
Facebook uses hundreds of factors to determine which posts a user would be most interested in seeing, all beyond the control of the disclosing company. Twitter offers promoted tweets, allowing an advertiser to jump ahead of organic tweets. In all social media platforms, the likelihood that your users actually see the content you share is a function of how frequently they visit their channel, how many people they follow, how much those folks post and the type of content they engage with, among other factors.
Gilbert points out that “the FD in regulation FD stands for fair disclosure” and we most certainly agree. Social media should be used as an additive to investor communications, but in no way does it provide a level playing field for all market participants.

Understanding the True Risks of Utilizing Social Media for Financial Disclosure

October 8, 2013

By Serena Ehrlich, Director of Social & Evolving Media

Last week, Twitter announced to the world it was filing its S-1 via its own social media platform.   While a few vendors in the IR + social media space praise the recent decision by the SEC to allow public companies to disclose material news via social channels, most realize this method is far from a best practice.

What is disclosure via social networks? 

In April 2013, the SEC announced that public companies could utilize social media networks as material disclosure distribution outlets, if they first let investors know which networks they were going to use.  This announcement came with a wide range of support and backlash. Those in favor believe this decision is forward-thinking and a solid fit for the way people communicate today.  Many others believe that this decision will lead to uneven access to content and the sharing of misinformation, ultimately creating a more volatile stock price.

Why are social networks bad platforms for disclosure? 

Before we start, let me reiterate, I am obsessed with social media.  I love Twitter.  I love Facebook.  I’m a wizard at G+, and yet I strongly believe social networks are terrible platforms for disclosure as they simply do not provide immediate, broad access to the news.  Below are several of the road blocks facing this practice that should be considered by every public company before considering this step.

  • Does the news fit the platform?:  Each social network has its own personality and fulfills different end user needs and desires, most of which are not aligned with most companies’ investor profiles.  Facebook, for example, is an excellent recommendation engine.  Pinterest is an aspirational website and Twitter is a continually updating information sharing tool.  None of these sites are being utilized by the average user as legitimate investment forums.  It is important to note that while platforms like StockTwits do bring the discussion of stocks onto Twitter, it is not reflective of Twitter’s overall market use.
  • Lack of visibility of Tweets and social updates:  As noted in this infographic, many company updates are simply not seen by page friends and fans. In fact, 84% of Facebook newsfeed stories are never seen and 71% of tweets are ignored.  This lack of visibility directly affects the success of social network disclosure posts.
  • Manipulated news visibility:  Every social network has the technology and ability to change the visibility of tweets and posts.  Twitter, Facebook, and other networks are monetized by advertising.  Paid tweets, sponsored posts and trends and more increase visibility of “popular” news and take valuable visibility away from non-paid status updates and posts.
  • Potential platform volatility:  Let’s face it, social networks sometimes go offline. Whether it is for system maintenance, too much volume or a DOS attack, when you choose to disclose over a social network, you put yourself at the mercy of a network only a handful of years old.
  • The old game of telephone:  When news is shared out across social networks, people frequently include their own opinion before resharing.   This leads to the possibility of message alteration (on Twitter, these changes are frequently noted with an MT which stands for modified tweet), which could directly impact perception of both the company and the news issued.  Rumors spread quickly on social networks and once misinformation is shared, the company must focus on message correction or risk stock instability.
  • Lack of access to social networks:  In 2011, a study of corporate CIOs shows that 31% of companies did not allow access to social networks during work hours, directly limiting access to real-time breaking news.  As the New York Times noted in 2012, financial institutions continue to struggle with providing traders and analysts with access to these channels.
  • Lack of immediate access to full-text:  The other issue with social networks is that they do not allow for very much text.  This means a company must state the impact of their news in as little as 140 characters and include a link to the full text article.  This 2-step process decreases potential visibility of the full story, and delays access to the news for end users.
  • The impact of delayed access to news:  One of the big discussions this summer in relation to the investment community was the financial impact of Thomson Reuter’s product that provides elite traders access to key information milliseconds before the rest of the financial community.  This service allows traders to buy and sell before the rest of the financial community. Every second counts on Wall Street. CNBC notes that within 10 seconds, hundreds of millions of dollars in trades can be completed.  Social networks are unable to confirm equal visibility of news and tweets, making it very easy for trades to be made before the news has fully been disseminated.
  • The security issue:  While somewhat rare, every social network, every website, faces potential security attacks and risks. Even the AP’s Twitter account was recently hacked, causing  widespread sharing of a false report of a shooting at the White House.  How are consumers supposed to know if your update is legitimate or not?  How quickly can a stock price be halted if false news impacts trading?
  • By the way, who actually uses social networks?:  While many buy-side analysts praise the use of social networks as research tools for reporting (a practice we highly recommend), most social site demographics are not aligned with investor audiences. Pew Internet notes that only 16% of Americans who utilize social networks have a Twitter account while 67% use Facebook.

Did we mention that we love social networks?!  So what should you be doing if you want to socialize your news, increasing overall awareness and engagement with your organization?  Business Wire continues to recommend a mix of tools including:

  • Use broad distribution via a commercial newswire to guarantee your full-text press release is simultaneously put in front of reporters, analysts and interested online parties.
  • Include multimedia to enhance your news – analysts love multimedia, especially video from senior team members.  Not only does multimedia increase viewership and news sharing, it has been proven to both drive deeper company-to-consumer relationships and also humanizes the brand.
  • Blog about it:  One of the best uses for corporate blogs is the ability to provide additional context for corporate news.  These are perfect vehicles to showcase the “why” of your story. And blogs that answer expected media and analyst questions help reporters provide better news coverage, ensuring further approved message permeation, decreasing message confusion and stock volatility.
  • Sharing news socially is a great idea!  Once your news has been posted to your website, share it out across your social channels.  Include Tweet this links inside your release copy to make it easy for your readers to share your highlights.
  • Live tweet:  One of the best ways to use social networks to share out news is to live tweet major events or news.  Draft tweets based on key elements of your press release and tweet them out with links back to your news. Include created multimedia to drive even higher engagement and sharing.
  • Utilize video chats: Create a video version of your blog and share each video’s embed links with key reporters and analysts. Today’s news outlets crave video content, as it both engages readers and increases the time the reader spends on their website. Analysts like the opportunity to see as well as hear from senior management. And of course, just like the blog, this content continues to drive message permeation.
  • Monitor the Conversation:  This is the number one way analysts today use social media.  They use it to see what people are saying about you, your product, your reputation and company.  The best way for organizations to utilize social media for disclosure is to listen.  What are people saying about your company, what misconceptions need to be clarified, what message points are resonating and which ones are not? Through listening you can not only find where conversations are occurring about your brand, but major themes, providing you with a roadmap for future discussion points.

There is a real, legitimate place for social media tools and platforms in the news distribution process, just not for material disclosure.

What do you think? Do social media platforms meet the requirement for consistent broad disclosure? We would love to hear your thoughts below!

Have questions about the role social media plays in the news distribution process? Let us know!


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