Social Media and Institutional Investors: a “New-Born” Relationship

 

In his book The Credible Company, D’Aprix credits the most important upsides of technology innovation for communication professionals to be  the ability to deliver unfiltered news to employee public almost instantly and provide for a more democratic information exchange between leadership and employees. Furthermore, he elaborates on the usage of social media and the fact that it has provided its users with the ability to broadcast their views and ideas without the usual gatekeepers. In other words, everyone now has the capability to be both author and publisher.

An article by Chris Daniels published in PRWeek discusses the impact social media may have in decisions of institutional investors and analysts, and finds its role to be very limited. In other words, a recent poll of investors and sell-side analysts found that only 4% ranked “new media” as the top influencer when making investment decisions. However, this does not diminish the power and influence of new media among many constituencies. According to the previously mentioned survey, 58% stated that they believe new media will become increasingly important in helping them make investment decisions.  See full size image                                    

Acknowledging the power social  media has on today’s generation, and it’s potential impact on today’s organizations, it is of uttermost importance to be aware of the challenges it imposes on the communication profession. Information professionals are at challenge of determining how to use and manage information from social networking sites and deliver them properly to a skeptical audience of employees and investors. Undesputable is the recognition that technology has opened up a Pandora’s box and revolutionized the way we interact in corporations and the ways in which we will do business going forward. It has also raised expectations about the role of internal communication professional relating to effective information management and delivery.

Social media might not serve as a direct source investors and analysts turn to (after all, it doesn’t carry the same credibility as more traditional communication tools) but it is certainly becoming a stepping stone that initiates conversations and creates frames.

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