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Misuse of Social Media in an IR context

misuse_of_social_media

While many people see Social Media as simply “Facebook and Twitter”, we prefer to describe it as more than just the networks we use each day. In reality, Social Media is the practice of engaging with like-minded people, to establish connections and to encourage discourse. But that doesn’t mean you can’t find examples of the misuse of Social Media.

We’ve seen the best and the worst of Social Media consultants in the past few years. But we’re still consistently surprised by the lack of professionalism and knowledge of Social Media best-practices that is exhibited by so called “experts”.

In the past we’ve named, a company¬†from Vancouver, Canada, that seemed to readily demonstrate how to misuse Social Media. From spamming followers to automated follow/follow back strategies and buying followers for their clients, they are a great example of how not to do things. We don’t name and shame anymore, but we will outline some of the major Social Media errors that can lead to the misuse of Social Media in an IR context.¬†

ASKING FOR DMs

One of the most frustrating things to be hit with as a Twitter user is unwanted SPAM, even from people/companies/personalities that you happen to be following. The most frustrating part of this is the automation. Direct Messages (DMs) in Twitter are an inherently personal action saved for direct, private communication between users. When users receive automated messages instructing or begging them to continue to Facebook or a blog without any personal connection they’re very often turned off and un-follow the company immediately. This is a sign that the company has not developed a social engagement strategy prior to Tweeting their ‘followers’. This is a major indication that the account is automated and that the “person” on the other end is absent.

Some new IROs fall victim to this practice when they’re first starting out to save time with retail shareholders. Without following the person to whom this IROs profile has been sending DMs, her profile was caught spamming users recently with this following automated message.

 

DMs AND FOLLOWING

A simple reality of the Twitter platform is that a user cannot send a Direct Message (DM) to another user unless they are a follower. In the instances both above and below, we have received DMs from Viral Network asking us to do something which we simply cannot even if we wanted to. As this company below is not following @IRSmartt on Twitter for example, we cannot respond privately to this request below.

The reality of something like this is a frustration for the retail investor receiving the communication and a fundamental lack of respect shown by the company to their followers. It leaves a bitter taste is is definitely not something you want to be doing to your investors or analysts.

BUYING FOLLOWERS

This is a simple practice, designed to artificially inflate the followers of a Social Media profile. There are dozens of websites available that allow you the ability to pay a few hundred $$$ to receive a large number of likes on Facebook or followers on Twitter. The companies that provide this service retain thousands of Social Media profiles created specifically for this purpose. They can deliver an exact number of likes of follows anytime they choose which represents absolutely no value to the IRO. But don’t confuse this for an investor relations tool, it’s not.

If you’re lazy, this is a simple work around as it gives you the ability to tell your clients (or your CFO) that they’re getting huge numbers of followers without you doing any work. The reality is that this is the most negative aspect of Social Media.

Examples of websites for buying followers include:

  • https://boostlikes.com/
  • http://www.buyactivefans.com/
  • http://www.likesandfollowers.com/
  • http://www.buyilikes.com/
  • http://www.socialkik.com/

There are many many problems with this practice. Mostly, it’s tantamount to fraud. But from a social perspective it marginalizes the legitimate followers that a company actually has. Real stakeholders, people with an interest in the company. Because these kinds of accounts are automated, it’s very very rare that legitimate requests for information are ever heard by the company. In this way, the profile, whether it be Facebook, Twitter or anything else, actually serves to damage the company’s reputation rather than enhancing it.

But don’t take our word for it. As far back as early 2008 there have been people writing prolifically about how bad this practice is for an actual campaign.

  • http://outspokenmedia.com/social-media/buying-facebook-fans/
  • http://www.techinasia.com/5-reasons-why-businesses-should-not-buy-facebook-fans/
  • http://www.socialmedia.biz/2011/04/18/the-danger-of-buying-facebook-fans/

Spotting Fraudulent Social Profiles

It’s actually quite easy. Just look for a large number of followers, with very little engagement on the Facebook page. It’s also a good idea to check the market cap of a company against the number of followers they have. For example:

BARRICK GOLD: Market Cap = 38.56B, Facebook Followers = 8,665

EDGEWATER EXPLORATION: Market Cap = 29.71M, Facebook Fans = 7,880

HOW TO SPOT FRAUDULENT TWITTER PROFILES

Twitter campaigns to inflate followers actually use what’s known as a “Follow / Follow-Back” strategy. The automated software the company runs will follow a number of Twitter users. If they respond by following back, the software continues to follow them. If however, they recognize this as SPAM, they don’t follow back.

In this way, the software is able to create a large number of followers while simultaneously following a large number of users. This is the way to see who’s trying to beat the system. Twitter accounts that are automated will very often have almost exactly the same number of followers and following with Following always being slightly higher. Legitimate company profiles tend to follow far far fewer people, while still maintaining good following numbers as illustrated below.

OWNERSHIP OF MEDIA

This is an interesting one. Media companies have long sought to control branding and align themselves in media coverage with the public companies they represent. In this way, the media company is able to increase it’s own market share and influence to the detriment (and expense) of the public company. Using the example below, we see the the media company has kept the content, paid for (either directly or in-directly) by the public company on their own Social channel.

This practice is inherently misleading in that it does little to support or increase the social connections of the company and instead really serves to leverage their content. So while the media company has increased their followers and views of their channels (shown below), the public company has no new access to connections and is forced to become more reliant on the media company for future content releases. This is almost the same practice as was previously conducted by email newsletter organizations.

data visualization wins investors

Tim Howard

Tim is our CEO at IR Smartt Inc. He leads the strategy and business development teams, driving the company forward. Tim's previous professional experience included extensive work in Journalism and Online Publishing.