Social media is not getting a “like” among many people in the investment community, according to new surveys by the National Investor Relations Institute and Corbin Perception Group LLC.
The NIRI survey of investor relations (IR) professionals shows that a majority (72 percent) do not use social media for their IR work. NIRI says it inquired about IR social media use (where the investment community is the primary audience), the recent SEC announcement concerning social media use for corporate disclosure, broad corporate policy concerning social media, and organizational staff changes as a result of social media.
Consistent with the results of NIRI’s 2010 social media study, respondents report not using social media for IR primarily due to a lack of interest by the investment community. Almost half of the professionals (49 percent) who do not currently use social media in their IR program plan to reassess the issue within the next 12 months.
Separately, in an effort to objectively evaluate how the buy side consumes social media — defined as financial blogs, message boards and social networking sites — Corbin Perception surveyed 87 global buy side professionals across a diverse set of industry segments and market-caps on the impact social media has on their investment process.
More than half (52 percent) of survey respondents use social media as part of their research process, and the vast majority of these respondents indicate that it has influenced their investment decisions at least occasionally. But 92 percent consider the information gleaned from social media sites as either somewhat or not at all reliable.
According to the entire Corbin survey group, social media is the lowest-rated information source in terms of influence.
“The timing of NIRI’s survey was ideal as it was conducted one month after the SEC’s announcement that companies may use social media to disclose key information after alerting investors about which social media will be used,” Jeffrey Morgan, NIRI President and CEO said in a statement.
“Companies will obviously choose the methods that best meet the communications needs of their constituents, but important in making an informed decision is an understanding of the current state of IR practice provided by these survey results,” Morgan said.
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