The Rising Use of Twitter in Investor Relations: Guest Post by John Muzzy

The business world has come to embrace social media and investor relations seems to be the next big field to do so as well. In just the past few years the impact Twitter has had on IR has gone up dramatically. While investors still primarily rely on the companies themselves for information, Twitter has become increasingly important.

The Brunswick group recently conducted a survey of over 500 investors and sell side analysts in Europe, US, and Asia and the results showed 30% use Twitter, which is a 19% increase from the last time this study was conducted two years ago. One eighth of those surveyed say they made an investment decision based off something they saw on Twitter. Twitter has also proven to be a very important first step for investors. 28% of those surveyed said they searched for information on an issue they originally saw on Twitter. Stocktwits, the IR specific Twitter related social networking site created in 2008, now has a community of over 200,000 investors, marketing professionals, and private companies.

While the usage of digital media continues to rise traditional media sources are become less and less used. The number of investors who see the importance of traditional business media online was down 13% from where it was two years ago. However, even with these changes in the media landscape, getting information directly from the company is still the preferred information gathering method for investors. While that is currently the norm, the future of social media is not lost on those investors. Social networking sites like Twitter are constantly growing industries and 56% of the investors in this survey see the role of digital and social media increasing as time goes forward. Here is the infographic from Brunswick on the left.

Right now the more common practice is to use Twitter as an information gatherer rather than an information distributor, but both practices are on the rise. One plan some companies have developed is creating a specific Twitter account for IR. World Wrestling Entertainment (WWE) has the most followed company specific IR Twitter account with over 11,000 followers. For them it was all about understanding their audience and the correct way to direct their message. WWE’s proactivity in this field is what has led to their success. They quickly and effectively advertised the creation of their IR account which helped garner followers. Their investors have enjoyed having one simple source to gather information and it’s made their lives easier, something that investors always appreciate.

The WWE has become the example for other companies on how to establish and execute an IR specific account. Those managing these IR Twitter accounts continue to find ways to utilize them including but not limited to sharing stories, providing links to previously disclosed materials, live tweeting meetings, directing followers to other social media outlets, and engaging with followers. As companies continue to understand the ways in which they can utilize social media the use of these resources will continue to rise, especially Twitter, which has the potential to become a highly used intermediary between companies and their investors. This is still a fairly new medium for companies to apply and all signs point to a continuous significant growth in the utilization of Twitter in the coming years.