German-speaking investment community warms up to social media
The use and acceptance of social media within the German-speaking financial community has been gradually increasing, according to a recent report by IR Club and DVFA, the German society of investment professionals.
The survey, which has been conducted bi-annually since 2011, looks at how analysts and investors based in Germany, Austria, Switzerland and Benelux countries use information posted on social networks in their investment decisions and recommendations.
‘During the first rounds of the survey I nearly lost the hope that social media would one day make it into the capital markets world,’ comments IR Club general manager Patrick Kiss tells IR Magazine. ‘But findings from our latest edition show that it just takes time. Social media offers speedy information, but the slow rate of acceptance of these tools by the investment community means they are not yet widespread.’
While information on traditional media, both print and online, are still considered the most relevant by roughly nine out of 10 respondents, social media postings were deemed ‘rather important’ at least by more than 60 percent of respondents, with 20 percent rating the latter as ‘important’ or ‘very important’ and 38 percent admitting social media sites and blogs had become more prevalent sources of information over the past few years.
Social media postings are also likely to have an influence on investment decisions or recommendations for about half of the analysts and investors surveyed; they have also prompted the same amount of respondents to dig deeper into a subject.
But users aren’t only followers: a third of members of the German financial community actively post business or investment information on social media, 13 percent on blogs and 11 percent on message boards.
More than half of respondents would like to see IR information such as company news, voting rights notifications or consensus, posted on social media; 47 percent believe it’s a good way to engage in dialogue with a firm; and 30 percent would be keen to see postings from the CEO or CFO.
As far as networks were concerned, LinkedIn and Xing were cited as the most popular, with two thirds of analysts and investors using them, followed by YouTube, Twitter and Facebook, used by 29, 25 and 24 percent, respectively. Twenty one percent of respondents were reportedly using none.
Asked which network they would prefer companies to use for communications, 42 percent voted for LinkedIn, 38 percent for Xing, 31 percent for Twitter and 24 percent for YouTube.
Sixty nine percent of respondents said they would be likely or very likely to use social media if a CEO, CFO or IRO of a company they cover or invest in were to use it to engage with the investment community, up from 58 percent two years ago. Moreover, 68 percent of analysts and investors believe information delivered via this channel will play an increasingly important role in investment decisions and recommendations in the future.
Those not using information from social media sources cited lack of relevance, of value, and non-reliability - or simply that they had all the information at hand already.
‘The most important finding of the survey is that the use and acceptance of social media within the German speaking investment community is increasing steadily, albeit slowly,’ Kiss concludes.