Two excellent surveys by Q4 Web Systems and the WSJ have suggested that investors are increasingly using Social Media for decision making. As social media gains in its importance as a stock research tool, it makes sense for us to start thinking about how we can position our companies and clients (if you’re an ir firm) for this kind of online research.
SOCIAL FOR RESEARCH
The increasing popularity in social media is playing a greater role in how professional market participants make investing decisions, according to a new survey conducted by Brunswick Group. The study doesn’t go so far as to say that investors using social media are more effective than their counterparts, but it does show using investors using social media as a research tool is an upward trend.
DOES IT DRIVE TRADING?
The study indicates that there is a correlation between online activity and market activity. Which makes sense. The more investors’ social media accounts are tweeting, the more often you’ll find they’re taking that same behavior to their broker. But does a single Tweet or really online activity generally drive trading? The jury is still out. Though the Brunswick report is a great base, the impact of social messaging on the financial markets is still unknown. Having said that, developing a digital investor relations strategy now will help you implement a social media strategy in the future.
IT DOES DRIVE TRAFFIC
While you can say definitively from this data whether there’s a huge impact on trading volume from social media, you can make some assumptions based on key indicators. Website traffic is one of them. Your website provide should be able to show you the most recent Google Analytics data for your website. Therein, you’ll most likely see that social traffic to your website is a key indicator of future increases in trading volumes. If you’re not equipped with this kind of information, consider an inbound ir solution to give you further insights into your website traffic.
HOW YOU SHOULD REACT
Investors are making decisions based on what’s released in your digital investor content. That means blogs, (so let your company’s blog become a resource) micro-blogging services, (so tweet your official information out to the masses, monitor and drive conversations about the company) message boards (so share your company’s own content on places like SeekingAlpha, and engage with posts and comment-based conversations about you) and social media sites (so be aware of what’s being said about you, and share your own information to a wide, engaged audience). The top-ranked source of information is companies themselves, and your website and social media engagement are a part of that source. Use them effectively to give investors what they’re clearly looking for.
There’s so much bad information on the Internet that anything so much as above average can go a long way. Activist investors have been using visuals to win proxy battles for some time now. If you’re ready to take their lead, consider graphing your earnings data for your investors so that they can quickly compare results over time.