Europe’s IROs reassess social media

Aug 18, 2015
<p>European companies give their social media verdict in the <em>Investor Perception Study &ndash; Europe 2015</em></p>

Social media and IR are still somewhat at odds with each other, according to information in the Investor Perception Study – Europe 2015, as increasing numbers of companies are reassessing whether Twitter and other networks are suitable routes for disclosure.

The question has been raised again in light of Nestlé’s decision to wind down its dedicated IR handle – @nestleIR – in favor of merging the account with its main corporate feed. In fact, of the top 10 companies that make up the IR Magazine Euro Top 100, only two German firms maintain dedicated IR twitter accounts: BASF, in second spot, and RWE, ranked sixth.

Both companies’ IROs use the accounts for disseminating useful messages to investors, though RWE’s is particularly useful for distributing its short, YouTube-style videos that often include interviews with the firm’s CEO or CFO. For other companies, however, it’s a matter of assessing which communications channels investors or analysts are accessing.

For most, this is an easy call to make when there is little interest from the investment community in using said channels. Ricardo Jiménez, head of IR at Spanish firm Ferrovial, reports having increased social media activities throughout the year but admits: ‘We see very little – if any – interaction with institutional investors or analysts.’

Steffen Kindler, head of IR at Nestlé, says something very similar in the study – a statement made before the decision was even made to discontinue the firm’s dedicated IR Twitter account.

‘I’m not absolutely sure how much value [social media accounts] offer when everything’s available on Nestlé.com so our focus is to make as much as possible available on our IR site,’ he notes. ‘We look at the statistics and see just a handful of people using our iPad app so I think a comprehensive and easy-to-navigate corporate website may be the best way to go.’

Is this actually what analysts and investors think? According to feedback from IR Magazine’s survey, yes it is: many more respondents say they are either not involved in social media, or think it is actively harmful to a company’s perception, than say it is useful.

‘They all seem to be having a go but I don’t use [social media] because it’s not very useful,’ writes one UK sell-side respondent. ‘You need all the numbers in your model and this takes too much time to look through. I think it’s aimed at a different audience.’

Some say that, in particular, they do not want to see anything resembling a tweet from the C-suite. ‘Some managements tweet but we typically ignore them,’ says one Italian on the buy side. Another UK buy-side respondent is less complimentary: ‘Several of our CEOs had Twitter accounts and I actually followed them until I realized how pointless it all was.’

Another common complaint is that the information gained over social media is too shallow to be meaningful. ‘Some companies blog but the usefulness is debatable because the content is so superficial,’ explains a UK sell-sider.

On the other hand, some respondents are still hopeful social media will earn its place in the IR toolkit, and say companies need to improve how they use outlets like Twitter in the future. ‘The way we get our morning news is changing and I check my Twitter feed first thing,’ notes a UK sell-sider. ‘This way we can select only what interests us. It’s definitely a good thing.’

The scene is poised to change in the near future, it seems, as the general public begins to consume more and more information via social media. As one German member of the buy side puts it, though apps and podcasts are widely used, they are not yet of use to him. ‘It might be useful for the next generation, though; I think [companies adopting apps and social media] is definitely a good move,’ he adds.

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