Professional Documents
Culture Documents
609
Feature
not utilising social media to source investment information are set out in Table 2. Table 2: Key findings Quick Pickers Concerns about the credibility of information Not relevant for them Concerns about security issues Other reasons including time comsuming, privacy issues, lack of awareness and did not consider social media as the right channel 36% 30% 26% 8%
Many respondents (44 per cent) felt social media communication channels should be used as needed, or by request only. This suggests that companies need a clear strategy for sharing information via this medium, rather than simply having a presence. A significant proportion (33 per cent) believed social media should actively be used as a tool to communicate investment advice to securityholders. Further, 20 per cent of the Squids believed that social media shouldnt be used by companies to communicate with securityholders. This again may suggest a lingering doubt over issues of securityholder privacy and risks of fraud. Figure 1: How should companies use social media to communicate with securityholders?
Other reasons (eight per cent) include time consuming, privacy issues, lack of awareness of social media as an investment information source and did not consider social media as the right channel to find investment information. When asked if they would be likely to use social media for investment information in the next one to three years, only nine per cent of the Quick Pickers said Yes and 23 per cent said Maybe. The remaining 68 per cent believed they would not be likely to use social media for investment information. While this group may be web savvy, they remained unconvinced of the credibility of the broader social media channels as a legitimate source of investment advice.
3%
As a tool to communicate with securityholders
20%
33%
44%
Never Other
The Squids
While the respondents in this group are in reality a subset of The Quick Pickers, the difference is that these respondents actively use social media to access investment information, marking them as the most resourceful, multi-channel users of the internet. Social media is a relatively new form of online communication which facilitates content sharing and the exchange of ideas among users in a community-style environment. Well-recognised examples include Facebook and Twitter while popular investment examples include HotCopper and Topstocks (in Australia) and SeekingAlpha and TheMotleyFool (from overseas). Even though the use of social media has skyrocketed in the past five years (Facebook today has more than 500 million active users!5), our research found only eight per cent of overall respondents use social media for investment information. Among that subset, 37 per cent are active contributors on social media sites. While 79 per cent of Fortune 100 companies have embraced social media strategies6 to engage with their customers and use it as a sales channel, other organisations are taking a wait-andsee approach. Interestingly, our research indicates that over 75 per cent of social media users believed companies should have a presence in social media channels. We believe this is due to its key benefits of immediate engagement, ease of use, and degree of interactivity.
610
November 2010
A surprising fact emerged which seemed to refute the widely held belief that the elderly are less receptive to e-communications.7 It is the 66 years and above group which shows the highest percentage of the Quick Pickers at 76 per cent. In fact, the amount of traditional users in this age group is only three per cent more than that in the supposedly more web savvy 25 years and below group. In contrast, the use of social media shows an obvious correlation with age group the older the age group, the lower the percentage of Squids. (See Figure 2.) Figure 2: Investment information channel by age group
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 25 and below 26 45 46 65 66 and over
7% 18% 21%
2 3
2 3
Companys website and e-communications Online news and professional information services (for example AFR. com.au, Forbes.com) Brokers website and e-news Financial blogs (for example, Seeking Alpha, Motley Fool) Investment forums (for example, Aussie Stock Forums, Hot Copper) Social networks (for example Facebook, Twitter, Stock Twits) Online webinars
71% 61%
75%
76%
Quick Pickers
4 5
The most interesting aspect of the results in Table 4 is that even among social media users, social media sites were deemed less trustworthy than professional and established company-branded sources. However, there may be another way of looking at the findings. If an organisation takes ownership of its own social media strategy, as opposed to an independent aggregator or third-party supplier, it is likely that investors will embrace the medium and the benefits it can provide. In addition, where a blog or website is rated highly among other social media users, it is deemed to be more trustworthy on the basis that feedback from the community helps the most beneficial or most useful sites become more popular. With trust being the key concern, companies need to address the credibility of information sources and build trust with their stakeholders proactively. Stefan Grafe, the founder of Mext Consulting and author of Trust Me, has worked with global
611
Feature
companies including Nokia, AXA, HSBC and Deutsche Bank to drive brand engagement and business growth by building trust. According to Stefan: Organisations need to understand that trust is driven by six distinct facets stability, development, relationship, benefit, competence and vision. Trust and credibility can be built by understanding which of the trust facets is best built with which medium and therefore which messaging. With social media, companies have at their disposal another channel to engage investors and customers.
media users trust a site more when it is highly rated by other users. Thus, companies could make use of this compounding power to build credibility through user endorsement. On the flipside, companies should be aware that any credibility issues not managed well could also spread as quickly, to potentially disastrous effect. All that said, while our survey points to a growing trend in the sourcing of investment information online, the question still remains how trustworthy is the source? A group of doctors based at the Princess Alexandra Hospital in Brisbane did some research where they googled the symptoms of 26 cases.10 And as it turns out, the web search came up with the right diagnosis in 15 of those cases. That equates to 57.7 per cent accuracy, or to put it more succinctly, half truths. Now thats food for thought for any investor. To learn more about investor communications strategies, contact Andrew McClintock at andrew.mcclintock@computershare.com.au.
Notes 1 Pew Research Centre, 2009, 61% of American adults look online for health information, www.pewinternet.org/Press-Releases/2009/TheSocial-Life-of-Health-Information.aspx, [8 October 2010] 2 Whyte S, 2010, Patients warned off Dr Google, The Age, 26 September, www.theage.com.au/national/patients-warned-off-drgoogle-20100925-15rob.html [8 October 2010] 3 A total of 2,179 securityholders responded to the survey, a majority of whom resided in Australia and New Zealand (97 per cent) 4 Sachoff M, 2009, Investors say Internet most important source of Information, WebProNews, 26 January, www.webpronews.com/ topnews/2009/01/26/investors-say-internet-most-important-source-ofinformation, [9 October 2010] 5 Facebook, 2010, Press Room, Facebook, http://www.facebook.com/ press/info.php?statistics, [9 October 2010] 6 Bloch E, 2010, How are companies leveraging social media?. FlowTown, 7 March, http://www.flowtown.com/blog/how-arecompanies-leveraging-social-media, [9 October 2010] 7 Computershare, 2009, Investor Research Factors Affecting e-Communications Behaviour 8 Treasury, 2004, Australias Demographic Challenges, The Treasury, Australian Government, http://demographics.treasury.gov.au/ content/_download/australias_demographic_challenges/html/adc-04. asp [8 October 2010] 9 Australian Investor Relations Association and Financial & Corporate Relations, 2010, Investors reminded to verify social media information, joint media release, 20 September, http://aira.org. au/images/stories/AIRA_PDFs/MEDIA_RELEASE_-_IR_SOCIAL_ MEDIA_20092010.pdf [8 October 2010] 10 Tang H and Ng J, 2006, Googling for a diagnosisuse of Google as a diagnostic aid: internet based study, British Medical Journal, Vol 333, pp 11431145, http://www.bmj.com/content/333/7579/1143.full. pdf?sid=88cf3585-eac8-4552-a12b-be4603f3f49f [8 October 2010]
612
November 2010