From legal reasons to misconceptions, many IROs avoid the blogosphere — but in doing so, they’re missing out on a unique opportunity for investor and analyst engagement.
Great IR is more than simple disclosure — it’s about going beyond the numbers to find new ways of captivating and educating shareholders, which is why blogging seems like such an obvious channel for the IR world. Yet, according to BusinessWire, 72% of IR professionals surveyed in 2016 do not use any form of content marketing for work functions (a 2% decline from 2013). So why, despite the proven benefits of blogging, do so few IR programs maintain an active blog?
Lack of Interest?
For some, it may be a matter of managing risk. As Sheryl Joyce, director of marketing and communications at Q4 Web Systems, notes, “blogs may represent too much of a sustained effort or be viewed as high-risk in terms of disclosure.”
Attorney Tom McCoy, a partner at O’Melveny & Myers, agrees, stressing that “there has to be a compelling purpose” for companies to maintain investor-centric blogs. They need to focus “on what is really important to the business,” he says, including employees, customers, and business partners. O’Melveny partner Marty Dunn warns that the casual and unscripted communication via blogs can come dangerously close to selective disclosure, and therefore requires discretion.
Common Misconceptions
Differing views on social media and its role in the financial sector, which most frequently flare up between IROs and institutional investors, also deter many from blogging. IR teams tend to falsely assume that the platforms are not used by their shareholders and analysts, and therefore do little to improve the team’s communication efforts. Yet despite the alleged lack of interest among the investment community, nearly 80% of institutional investors report that social media influences their investment decisions.
Such substantial engagement from institutional investors clearly makes IR involvement on such media platforms particularly vital, a view long-held by Dell and one of its IROs, David Mehok. The firm’s IR team keeps a regularly updated blog to “keep the company top of mind with tech investors.”
“The bottom line,” says Mehok, “is that people will be talking about your company in social media whether you want them to or not. IROs should take a proactive approach – they need to be a part of, and help form, the conversation.”
Benefits of the Blog
Not only can writing your own IR blog be an effective way to “help form the conversation,” but posting on other blogging networks can prove equally influential. This is especially true for small-cap companies, says Ezra Marbach of Seeking Alpha blogging network, which need to stand out “from the clutter of online financial information.” Such networks offer the perfect platform for IROs to broadcast their stories, to interact with current and potential investors, and organically grow traffic to corporate websites.
More importantly, coupled with the anytime, anywhere capabilities (including other social media platforms) of our now ubiquitous mobile devices, blogging can play a key role in communicating during a time of crisis or uncertainty. Even attorney McCoy recognizes its importance: “We’re past the day when an organization can scratch its head and puzzle over social media.”