‘Micro-influencers – those with between 1,000 and 50,000 followers – tend to be somewhat better trusted than mega-influencers,’ Virginia Brailey, CEO of Xemoto, tells IR Magazine. ‘They have a smaller following and they aren’t just ‘pushing out’ information: there’s an opportunity for people in their community to talk to each other and ask questions of each other, so it just feels more like a natural community. That’s a much more trusted environment.’
Brailey heads up a firm that offers companies access to a roster of almost 200 financial influencers – or ‘finfluencers’ – which she says have a combined reach of about 37 mn social media users across around 250 channels.
‘An IR professional or agency can go onto our platform, sign up and pick a package based on the desired reach,’ she explains. ‘For example, people might want to go across 10 social media channels and reach about 250,000 users. They input a piece of news or infographic or a video – something that’s hosted on their website – which then gets distributed across our finfluencer base.’
With fees ranging from $700 to $5,000 per campaign, Xemoto looks like an affordable solution to reach retail investors – and reach them, as Brailey says, ‘through a trusted source in the place they are spending their time.’
Adding to the IR plate
For many in IR, who have been accustomed to dealing with institutional holders and larger stakeholders, retail can seem like a side point. ‘Retail has suddenly been added to their plate,’ Brailey says. But individual investors are increasingly being recognized as important, she notes, adding that retail holders can even act as a counterbalance in times of market volatility.
The problem for many companies is that they don’t necessarily have a robust plan for reaching retail investors and some are overwhelmed by the apparent deluge, fueled by the rise of commission-free trading apps and the pandemic.
Brailey says companies should take note of the Japanese approach. ‘In Japan, companies group all retail investors into a single idea: Mrs Watanabe – and that’s useful,’ she explains. ‘Don’t think about them as hundreds of thousands of retail investors: treat them as one. They like snackable content, they’re on social media.’
Retail investors are also diverse in their investment approaches, Brailey notes. For example, Xemoto has finfluencers specifically focused on a number of spaces including tech, real estate, mining and cryptocurrency. But ‘we do find that retail investors look for information from influencers who cover different industries because they’re seeking to diversify their portfolios,’ she says.
The finfluencer effect
So how does this all work in practice? Once a company has chosen its package and uploaded its information for influencers to view, it is then up to these social media gurus to share that information with their followers. But that doesn’t guarantee content will get picked up.
‘Our finfluencers have control over the content they choose to disseminate. They know what fits and will work for their followers,’ explains Brailey, which is why she says it’s important to work with a large number of finfluencers to make it easier to reach the client’s goals.
There are also things companies can do to make it more likely their content will get picked up and shared. ‘The guidance we give our customers is that if you take a huge, long news release of your quarterly financial results and post that on social media, you’re probably not going to get a lot of attention from retail investors,’ says Brailey.
‘But if you take what you currently have – and we’re amazed sometimes at the potential companies are missing in their own content – whether it’s a news release or an analyst briefing, and repurpose it to make it snackable, that really makes it accessible.’
Finfluencers themselves will also appy their own, social-media savvy take to company content, of course – turning it into something their followers want to hear about and engage with. But that also means companies have to give up a degree of control. How do they feel about that?
‘We do have companies that – understandably – are concerned about a loss of control,’ admits Brailey. ‘Our advice is to try to be open to using a different approach to reach a new audience: for example, an authentic and engaging post may have a headline that is a bit provocative to grab attention and work for the specific social media channel. That said, our influencers sign a contract, follow our posting guidelines and use the accurate, publicly available material provided by our customers.’
Being accurate, transparent and authentic is key, says Brailey – both for Xemoto and for the firms and influencers it works with. ‘It actually plays better to the retail investor,’ she says. ‘If someone uses #ad or #sponsored – which is what we ask our finfluencers to do – it doesn’t make that information any less credible. Quite the opposite, in fact.’
This handing over of control to social media influencers boasting followers on platforms you might never use yourself is not all about risk, of course. As well as the potential to reach retail investors, these fininfluencers also bring new eyes to your content.
‘What we love about our finfluencers is they can sometimes take a really dry, mining news release from a small cap and turn it into something really interesting – because they’re posting it on TikTok and doing a really cool little video about it,’ explains Brailey. ‘So it’s not about creating a whole batch of new content; it’s repurposing the content you have so that retail investors connect with it more.’
Branka Petrovic, marketing manager at Xemoto, agrees and explains that engagement is also different across different platforms.
‘If IROs don’t have the resources to repurpose their own content, the influencers will often do it as part of what they do,’ she says. ‘For example, if it’s a press release and our TikTok influencers pick it up, they create videos from it. Or on Twitter, they can post it and sometimes start a conversation with it – within the comments, they might start pulling what they find interesting from the press release. That’s something we’ve seen get a lot of engagement from followers as well.’