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Dec 20, 2015

Investors and analysts prefer apps to social media

Worldwide investment community has little enthusiasm for social media, finds IR Magazine research

For as long as social media platforms have been part of how people and companies communicate, the medium has been considered a valid channel for IR teams to tell their companies’ stories. So why are investors still not interested?

This is one of the questions asked of investors and analysts as part of a new piece of IR Magazine research, titled ‘Investment community sentiment report’, which compares respondents’ satisfaction with standards and practices in IR around the world. The report is based on research undertaken over the past year to find IR Magazine’s award winners in Asia, Canada, Europe and the US. When it comes to the technological side of IR, investors and analysts have very mixed views.

For the majority, specific aspects of modernized IR are attractive: webcasts are generally popular, for example, and most respondents are keen on accessing the transcripts of presentations online for as long as possible.

Social media, however, prompts far less enthusiasm. Most say it has little to offer them because it does not offer anything that traditional forms of communication do not improve on in some way, particularly in terms of speed. ‘Social media doesn’t give huge value because we get the information faster by talking,’ writes a Canadian sell-sider.

Another Canadian – this time from the buy side – has yet to see evidence of ‘anything interesting’ in the field. ‘I think it’s a lot easier and more productive to give someone a call,’ he adds.

Others say face-to-face interaction is still utterly necessary when addressing the Street. ‘Technology doesn’t have a place in IR,’ says a US sell-sider. ‘It is the Wall Street analyst’s role to go beyond reading a transcript: he or she has to read body language and ask direct questions of a CEO.’

Some are more equivocal: one Canadian buy-sider describes social media as a ‘game changer’, adding that ‘more access and more communication can never be a bad thing.’

Videoconferencing is a far more popular option, largely because of the opportunity it offers for saving travel time and costs. ‘I can’t always travel so videoconferencing is a handy solution for me,’ says a buy-sider from Singapore. ‘It’s really useful when you can’t meet face to face.’

According to another Singaporean respondent from the buy side, Asian companies are less enthusiastic about the effectiveness of videoconferencing. ‘In the US and Europe [webcasts] are used to good effect but they are not catching on in Asia, though I am strongly encouraging companies to take them up.’

Apps and other improvements that bundle together IR information are largely praised, due mostly to their time-saving capabilities. ‘I find them incredibly helpful,’ says a US respondent on the buy side. ‘I get around 500 emails a day, so to get an app alert on my iPad is very useful.’

For most of the survey’s respondents it seems anything that makes their investing life easier – saving time, collating information or giving further insight – is of interest. The great social media experiment, on the other hand, still needs to convince.