What happens on social media marketing does not stay on social media. Individual Tweets and community discussions impact the real world—from impacting on what movie gets honored at the Oscars , to causing a 2500% increase in application downloads. But its ability to impact markets is what makes social media with regard to investor relations so important.
The influence of social media on the entire world is here to stay. Investor relationships leaders have an opportunity to reshape their engagement strategy to harness this powerful communications route. From the path to the public market, to publishing investor messages and understanding perception, let us explore how social media may enhance investor relations techniques.
The advantages of using social media for buyer relations
According to recent data, 75% of investors at this point use social media to inform purchase decisions. The role of investor relationships is changing —and requires collaboration with more internal stakeholders than ever before.
“Social media has become a key platform for investor relationships professionals to gauge essential conversations around their company and the broader market, ” Sprout Social’s Corporate Marketing communications Strategist Abigail Schmitt lets us know. “Particularly in recent years, platforms like Reddit and Twitter are becoming popular destinations for retail and institutional investors to discuss and analyze market styles. ”
From an education and link standpoint, it is critical to ensure that the ideal content, facts and buyer messaging come directly from the business for investors to find upon social. Investors large and small are increasingly using social to research new investment decision ideas—on TikTok alone, the #stocks topic has accumulated 5. 2 billion views. And Business Insider reports that membership on the subreddit r/FinancialPlanning saw 87% growth between June 2020 and June 2021.
IR departments have an chance to reduce friction from this procedure and empower decision making having a proactive social content strategy.
“Dating back just ten years ago, trader presentations, facts and purchase information was gated towards the world’s largest institutional money managers. This information is now democratized on social to encourage all investors to make the most effective decisions with the most relevant details, ” says Sprout Social’s Head of Investor Relations and Corporate Development Jason Rechel. “At the same time, IR leaders now understand the strength that a group of vocal traders on social can have with an individual stock price. ”
Social also has billions of data points that can be harnessed in real time to help keep IR leaders informed about corporate brand health, employer brand name health, competitive changes, consumer product sentiment, investor belief and more. Harnessed in the right way, this information can help senior management remain in front of potential crises and manage investor Q& A appropriately.
Now that you know the exactly why, here’s how you can use social networking to empower your buyer relations team and technique.
Connect to future investors and find your own influencers
The pandemic spurred a new wave of retail investors. A Charles Schwab survey revealed that 15% of current retail investors began investing in 2020. And members of Gen Z are usually more committed to the stock market than financial assets—including cryptocurrency.
Social media made investment education more available. Financial influencers on “ Stock Tok ” amass thousands of followers. And in a new survey, 41% of 18-24 year old investors said they turn to social media platforms like Reddit, Instagram and TikTok to learn.
“For IR leaders, it is table buy-ins to have a social media strategy, ” Jason tells us. “Understanding that your audience now actively looks for out investment information on interpersonal means that IR leaders have to proactively meet this audience on social with appropriate financial information, KPIs plus messaging to democratize the particular investment process. ”
If you’re not within the same channel as future investors, you’re missing the chance to connect with a new audience. Use social media to listen to the discussions your future investors may be getting, understand what motivates them and also to see what content resonates with them.
Monitor conversations and sentiment
Think about being able to get wind of market volatility months before considering a head. It does not take psychic powers—using social listening can help you stay well informed about developments and new importation on social, which can happen months before impacting a stock price.
When GameStop’s stocks infamously skyrocketed in early 2021, Nasdaq used social media to match conversations with unusual trading exercise. This is social listening in action—tuning into digital discussions to understand what’s being stated about a topic and how individuals feel about it.
" We all definitely have seen a significant embrace retail participation in the market throughout every season, " says @adenatfriedman . " We do have technology that examines social media chatter… and go with that up against unusual trading activity– we will potentially stop that stock. " pic. twitter. com/UWvg53YFI6
— Squawk Box (@SquawkCNBC) January 27, 2021
Given the ever-changing character of the market, listening empowers you to see conversations and sentiment that may impact your organization and its stock so you can shift with the market and type proactive responses.
“IR leaders can use equipment like social listening to maintain a constant pulse on external events and investor belief that might impact the fundamentals of the business or corporate brand, ” Jason tells us. “Using social listening is an incredibly powerful tool to stay in front of what might be rapidly changing business or market conditions. ”
To use social listening efficiently, a tool is essential. Sprout Social’s Listening tool can evaluate conversations across social media platforms and the web to give you a 360-degree view of the topics that matter most to you and your investors.
Anticipate investor questions
Being an investor relations leader without using social media is a lot like leading a book club without actually reading the book—you’re less informed than everyone else in the room.
When building trust with investors, the last thing you desire is to be unprepared to answer their questions.
As Jason puts it, “Social is rapidly becoming exactly where many investors go first for company news and information. ”
With more store and institutional investors using social to learn about stocks and shares, it’s crucial for you to maintain the same space. Knowing what assets your investors are consuming can better inform plus prepare you for queries they might have.
Pro tip: Social listening may empower you here, too. Using social listening amounts the playing field, expanding your knowledge base and giving you access to the same information retail and institutional investors see.
— Twitter Investor Relations (@TwitterIR) February 10, 2022
Tips for mastering social media for investor relations
Given that you know how powerful social media can be, here are a few actionable methods make it an integral part of your investor relations strategy.
Tap into your teams
Experiencing social media for your investor relations strategy requires collaboration. At Sprout, we have a regular strategy meeting between our Investor Relations, PR, Corporate Communications, Social Media and Legal teams.
Work across teams to create your strategy, align your messaging and ensure content on social follows SEC guidelines. You need people to see the same, consistent tone and message—regardless of where your brand turns up.
“We shoot for consistency of message, consistency of content and timeliness and legality of content to ensure that all of our stakeholders receive the most relevant news at most appropriate time, ” Jason tells us. “Social is really a key channel in this effort, and we plan content accordingly to keep our audience engaged. ”
Work together to incorporate input from your communications teams across the most important events for your investor audience, like earnings. Are you currently hitting the right buttons in your messages? How do your posts perform?
As Abigail puts it, “Collaborating with the teams who already understand the social landscape can help you develop a plan that will best complement your ongoing IR strategy and your brand. This could mean developing an IR presence for your company on social, or it may mean simply using social media to gauge sentiment before large events or announcements. ”
— Sprout Social (@SproutSocial) February 23, 2022
You can even use the social team to amplify messages on your brand’s channels by turning sound bites from earnings calls into shareable messages on your brand channels.
Choose your channels
While it’s not a requirement, having your personal channels for investor relations communications enables you to connect directly with your investors and the media. It ultimately precipitates to whether you have the bandwidth.
If you do want dedicated channels, the next step is to decide which social platforms to use. Here are a few to take into account and why they might be beneficial to you.
Twitter also makes it simple for investors to find details about your stock, and for you to find conversations about it with $cashtags. A $cashtag is similar to a hashtag in that it directs people to relevant conversations, but it’s hyper-specific to your brand and stock. Create your $cashtag by putting a dollar register front of your ticker symbol. For example , Sprout’s is $SPT .
Reddit may be the home of many financial communities that have grown in popularity during the pandemic.
Use Reddit to share company updates that the Reddit financial communities can build relationships and to monitor conversations around your company. As one of the platforms that Sprout’s Listening tools pull conversations from, it’s also valuable for gathering insights about your company and competitors.
LinkedIn is an important platform for your business to share content illustrating your successes, growth and news. With social media playing more of a role in institutional investors’ primary research methods , give your company’s LinkedIn Page an audit to make sure it’s up to date.
Embrace social listening
From understanding sentiment around your stock to identifying potential market volatility, here are a few ways social networking listening can help your strategy.
Track fluctuations in conversations
When GameStop’s stock exploded in 2021, conversations mentioning the company and r/WallStreeetBets increased 2, 805% over the course of a week—not over night.
Using social listening, you can identify spikes—or dips—in conversations and what might be contributing to them to have ahead of potential crises.
Changes in how people feel about your brand and stock can reveal larger underlying problems. This can help you understand what’s going on in the marketplace and can help you make better internal predictions about your stock.
Connect to your audience
If you only look at posts you’re tagged in, you’re missing a huge part of the conversation. If you use a tool like Sprout that scours social for keywords , you will find comments and questions about your brand and stock even when you’re not tagged.
Keep close track of competitor news
How does the conversation around other company stocks compare to yours? Tracking chatter and sentiment about your competition can alert you to industry changes that could affect your market standing.
Be smart about your content
For instance , the topic of K-pop music alone wouldn’t make sense for Twitter’s investor relations channels and website. However , a article about K-pop Tweet volume reaching new highs demonstrates the platform’ s worldwide reach and popularity—all of which could inspire investors.
When it comes to social media for investor relations, ask yourself what counts to an audience of investors.
— Sprout Social Investor Relations (@SproutSocialIR) January 13, 2022
Here are a few forms of content that work well for investor relations-specific channels.
- Announce relevant events (e. g., quarterly earnings calls)
- Quotes or thought leadership highlights from investor events and earnings calls
- Company, customer or acquisition news
- Performance-related thought leadership
- Q& As
- Company press
- Company and employee successes and celebrations
- Shares of relevant and exciting use cases, mentions and more
For the fourth consecutive year, we' re honored to be recognized by @SPGlobal for our leadership in corporate sustainability. The #DJSI feature the world’s top-performing companies predicated on analysis of economic, environmental and social performance. https://t.co/uPRtqWpdiK pic. twitter. com/9XUQ4KMqWE
— General Mills (@GeneralMills) November 15, 2021
Bet on social media for investor relations
Lately, we’ve seen the rise of stocks influenced by conversations in online spaces.
Retail investors saved Hertz from bankruptcy in 2020 after bidding up shares 825%.
AMC narrowly avoided filing for bankruptcy after investors on Reddit provided them with capital.
Social media has fundamentally changed the financial world. It can—and should—change how you work. You don’t need to be a social media pro to tap into social insights. You just need the right tools , the right team collaboration and the right goals.
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