Social media has become the important part of the investors-relation revolution. Twitter, Facebook, YouTube, Slideshare and blogging are no longer just in the dominion of the individual. The social media space has unquestionably transferred the power resolutely into the hands of the investor as the information they now have access to, is no longer opinioned by large corporate and conventional media agendas.

Conceivably the most important product of this bucket of choice presented by new media is the change in investor prospect, not only in the means and frequency of information, but in the nature of its substance too. Social media demands a versatile, three-dimensional online presence – stakeholders need to feel as though they are face to face with a real human being. Therefore appointing an individual who can keep Corporation’s personality with accuracy and authenticity is the need of the hour. People are more prone to believe on whom they are linked to on virtual communities rather than reading quotations from company spokesperson on a news agency’s website.

This faith can turn into a powerful tool in the event of a crisis. If tough associations are built with stakeholders via social media in the good times, this environment of clearness and investor confidence will give the company a sound traction in bad times. Also, with online communities the investor relation officer can address any negative publicity quickly with accuracy and on multiple platforms at a time, once again not having to depend on mainstream media, to decide on the story’s news               value     and possibly misrepresent      stakeholders.

Today, it is easier to guess what investors and stakeholders want from the company in the social and online media platforms. Of course, in the public relations business all this information has to be dispersed with a certain amount of poise and a good helping approach, which is where the investor relations officer plays a very important role. It must be kept in mind that these new communication tools are just that – tools. They are not wonder workers and cannot replace a communication strategy. Just as any company plans and makes the strategy for mainstream media, online or social media also demands careful thought and consideration even though some consider it as a very spontaneous medium. Casual and passing posts may be good enough as an individual, but as a company they could have redundant consequences.

Social media impacts the Investor relations, and this can be seen in various activities like Stock fluctuation, Insider information and speculation, Board Issues, Shareholder organizing, which occur due to influence of social media.

Increasing penetration of Social media

In 2010 PR firm Burson Marsteller studied the 100 largest companies in The Fortune  500 list and concluded that 79% of the companies use Twitter, Facebook, YouTube or other corporate blogs to reach the customers and other stakeholders. The firm divided its finding by region (North America, Europe, Asia-Pacific and Latin America) and network.

In the research, Twitter turned out to be the most accepted platform that the companies use; two-thirds of the Fortune 100 has at least one Twitter account, and on an average have 4.2 Twitter accounts. Fifty-four percent has at least one Facebook fan page, 50% have at least one YouTube channel, and 33% have at least one corporate blog. Twenty percent of the companies use all four social media platforms.

Social networks like Twitter and Facebook are generally West-oriented; Asia-Pacific companies don’t use them as much, instead they choose corporate blogs. When they do use Twitter or Facebook, it’s typically to connect consumers in Europe and North America.

Compliance risk

Though, Social media has been the hot favorite of Companies to engage with customers and stakeholders, but hundred of companies have exposed their firms to possible compliance risk because they have botched to play an active role in monitoring, managing and engaging in their company’s activities like Facebook and Twitter.

These agreement issues are arising generally because investor relations departments have taken a casual move towards their companies’ social media activities, even though investors and analysts are progressively using these channels to keep well-versed about their holdings.

Although the massive and influential presence of Social media in Investor relation cannot be denied, but Companies need to take care of the information authenticity which is displayed on these social daises.



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