by Thomas Becktold, Senior Vice President, Global Marketing
Turns out, quite a bit. You see, within hours of his terrible injury on the basketball court, fans were flocking to Twitter to offer their support. Unfortunately, most were initially going to a fake Twitter account and weren’t engaging with Kevin Ware at all.
Following the April 2, 2013 SEC Report of Investigation that says social media accounts fall under the guidelines of their 2008 Interpretive Guidance Report on IR sites, we have put together some tips to help public companies in their IR social media efforts.
Social media engagement should be a part of the communications mosaic, but it is not a replacement for full, fair and simultaneous distribution of news achieved through Business Wire. Investor relations professionals appreciate that their audiences are diverse and dispersed and use a wide range of platforms and content sources to access material information.
Social Media Opportunities for Public Companies
- Social media channels offer the ability to gather intelligence and engage in two-way conversations, and as part of a comprehensive communications mix, are quite valuable.
- Companies should establish official IR-specific social media channels on key platforms, even if they are not ready to use them. If the channels are not active, put a disclaimer or keep them dark.
- For those with a solid understanding of social media and their investor audiences, regular, consistent use of the channels for both good news and bad news is key. Just like any other disclosure platform, don’t tweet or post only the good results and skip the bad ones. Once you commit to adding a social media channel to your communications mix, stick to it. If you discontinue use of a channel, communicate that as well.
- Establish and publish a clear policy on your company’s use of social media as a supplemental channel to alert investors of disclosure press releases and filings. Cross-reference those channels on your IR site, press releases and filings.
- Listen to conversations and track sentiment and influencers, including your company’s Twitter “Cash Tag” – tweets tagged with your ticker symbol preceded by a $. Business Wire now offers social media sentiment analysis reports for press releases via our partnership with NUVI. For real-time monitoring and engagement, the NUVI platform provides an easy visual representation of influencers and sentiment based on the terms you choose.
Social Media Cautions for Public Companies
- Full and Fair Access: According to Pew Research as reported by TechCrunch, only 16% of adult US Internet users are on Twitter.
- Privacy: Social media channels have barriers to entry and require the user to set up accounts and agree to the terms and conditions of each channel. Your company does not control those terms and they may be objectionable to those interested in your news. Chances are, your own IR site, as a best-practice, does not require visitors to agree to terms and conditions to access material news.
- Fragmentation: Where’s Waldo meets disclosure. As an IRO, do you opt for a wide, instantaneous Business Wire distribution or solely post to Twitter or Facebook and hope people find your material information? Ask yourself, how do your investors, potential investors and media currently access your news? Chances are, it’s through a widely divergent set of sources.
- Simultaneity: The fact that users must click on a link to read a full-text announcement (that will reside elsewhere) adds latency and unfairness to the disclosure process.
- Usability: Is social media going to meet the needs of your audiences? Is it realistic to ask your institutional investors to hit “Like” on Facebook to get the latest earnings release alongside their elementary school friend’s picture of their latest cake or new puppy? Should you expect your retail investor to stop relying on their brokerage account to access your news because it’s no longer there and instead subscribe to your Twitter feed?
- Security: Don’t use social media as your sole means for disclosure: Look at Kevin Ware, the Louisville basketball player and what happened on Twitter just after his recent on-court accident. Someone set up a fake account because, yes, we know it’s that easy to do. And, that fake account had more followers than his real account. Imagine potential investors searching in vain for the “real Twitter account” for your company when breaking news happens? (Or finding that the official account has been hacked, as recently happened to both Burger King and Jeep.) Want to get a “verified” account? Good luck — and it might not make a difference anyway, according to this recent Mashable article. The Business Wire slug ensures a seamless, secure, audited experience.
- Reliability: Twitter has been riddled with outages as it grows – think how many times you’ve seen the Fail Whale. Business Wire operates at 99%+ uptime. With your news widely distributed, if one site or system goes down, investors have many others to turn to.
- Liability: Leveraging a Business Wire distribution ensures full and fair distribution. Tweeting a release today is akin to walking across a frozen lake in late March. Your odds of making it across are good, not great.
Want to read what journalists and others are saying about the SEC ruling? Here are a few links – the comments sections often provide greater insight for you to consider as a communications professional:
- NY Times Dealbook: S.E.C. Sets Rules for Disclosures Using Social Media
- Bloomberg: SEC Approves Using Facebook, Twitter for Company Disclosures
- CNN/Money: SEC’s new social media policy falls short
- CNBC/Reuters: SEC Permits Company Disclosures Using Social Media
- Fortune: Random Ramblings
- IR Magazine: SEC approves communication with investors via social media
- CFO: SEC Blesses Social Media Disclosures
- PRWeek: IR execs urge caution on social media after SEC ruling
- CommPRO.biz: SEC Clears the Way for Expanded Social Media Disclosure Provided Investors Are Alerted
- Securities News Watch: The Green Light to Social Media Use for Regulation FD Purposes Looks More Like Yellow
- TheCorporateCounsel.net: Social Media: SEC Issues Reg FD Guidance (In Form of Enforcement Report)
- Cooley LLP: SEC Embraces Modernity – Sort Of
- Leonard Street and Deinard: SEC Smiles and Frowns on Use of Social Media Under Regulation FD
- Alpha IR Group Blog: SEC Issues New Disclosure Guidance Today, but Offers Little Real Clarity
- Dodd-Frank.com: SEC Smiles and Frowns on Use of Social Media Under Regulation FD