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Should you be adding Social Media to your IR Policy?

Laetitia Verdier Written by: Laetitia Verdier May 31, 2012  

For the past three years social media has been hailed as the new tool for investor relations. Slowly but steadily corporations are acknowledging the advantages and exploring how to take full advantage of them. Here are three reasons why your company should at least consider adopting social media in its IR policy.

Resource optimization: When in doubt the first thing we all do today is looking for answers in the Internet. Investors are not different when having questions about any company. Every time we answer a question online, the answer is stored and indexed by search engines. Investors can then find their answers from the best and most reliable source possible: the company.

Better relations with the financial community: Through social media the company can develop its own voice among investors, analysts and financial journalists and become a reliable and frequent source of information for financial professionals. The main reason behind this is most journalists, a sizable number of analysts and a growing amount of investors and shareholders are switching from a mainly personal use of social media to communicating professionally through them.

Crisis management: A successful use of social media in IR leads to a heightened image of transparency and a higher credibility. Whenever a communication crisis arises the social media will be an important battlefield where the voice of the company cannot be missing. Building on the relations of trust already established with key analysts and journalists, the company’s message will find an eager audience if there’s already a history of successful communication with it.

These are but a few of the benefits a professional use of social media in investor relations can bring. However we should never forget social media are a tool to be handled with care and following a consistent policy. Otherwise we’ll be brewing the next communications disaster.

 
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