Richard L. Anderson
Richard L. Anderson

When Microsoft Corp. in May said it planned to acquire social network LinkedIn for $26.2 billion, the press release announcing the deal featured many of the elements journalists, investors and analysts have come to expect from brands and organizations distributing financial information in a post-digital age.

The press release, coinciding with a joint conference call/webcast hosted by Microsoft CEO Satya Nadella and LinkedIn CEO Jeff Weiner, included a link to an investor relations page carrying a slide deck explaining the benefits of the transaction, as well as both companies’ financials.

O'Dwyer's August '16 Financial PR/IR & Professional Services PR MagazineThis article is featured in O'Dwyer's Aug. '16 Financial PR/IR & Professional Services PR Magazine

In addition to the press release, Microsoft posted B-roll video intended for broadcast journalists containing sound bites from the two companies’ top executives and footage of the Microsoft and LinkedIn campuses. Plus, CEO Nadella’s internal staff memo about the “whys” behind the LinkedIn acquisition found its way onto Verge by 9:20 a.m. the morning of the announcement.

The media blitz is a far cry from how financial news was distributed in 1969, when I worked as a PR assistant in the corporate communications group at Textron’s corporate headquarters in Providence, RI.

The company was about to announce its acquisition of the United Fruit Co., for $1 billion, the biggest deal in Textron’s history. I was handed two envelopes and told to get on a bus and go the Wall Street Journal bureau office in Boston. (One envelope included a release announcing a done deal, and the other announced discussions between the two companies, but no official transaction.)

When I arrived at the Journal I called my boss from a pay phone, who told me to go upstairs and personally deliver envelope marked “#1” to Al Hunt, the Assistant Bureau Chief. In those days, this was the fastest way to deliver a press release to the wire services, something akin to the Pony Express.

Although the methods of information distribution have radically changed since then, the preparation and delivery of financial news and information these days remain a methodical task. IR and PR executives must ensure that when they send financial-related content to stakeholders — regardless of the channel — it conforms to all regulatory requirements and does not omit any public information that analysts and/or shareholders may consider material.

However, the accelerated pace of digital media, combined with the proliferation of social channels, is changing the game for IR. As online platforms increasingly become the core of strategic marketing, IR and PR execs are working together more cohesively in order to get their messages out more quickly than in the past, produce more original programming and steer the conversation online.

“Social is causing companies to break down the silos, where IR, PR and marketing are all working together,” said Josh Machiz, Director of Integrated Marketing at NASDAQ, the tech-heavy stock exchange. “By getting all three disciplines to message together, you’ll be able to present [financial] analysts with communications in the best way you can.”

Communicators play a critical role in shaping their brand’s social media guidelines and making sure employees know the ropes. IR and PR execs also boost their value by helping to educate C-level executives on the most effective use of social media channels.

“If they don’t have firsthand experience with social, it makes it easy for [C-level] execs to say ‘no,’” Nasdaq’s Machiz said. “You have to demonstrate why the benefits outweigh the risks and how social platforms can drive engagement and actual results. Often, the easiest way to do so is to help create a public facing social handle for [top] executives, so they can truly feel that impact of social as people they actually know and some they don’t engage with their content.”

Social channels also enable IR and PR execs to demystify their brand with stakeholders and pull back the curtain on their products and services.

Following the Brexit vote, for instance, NASDAQ ran a Facebook Live video featuring several interviews with in-house analysts discussing the financial impact of the U.K.’s decision to leave the European Union. Hosted from NASDAQ’s Market Intelligence Desk, the video included several questions from online viewers, which were posted on the company’s Facebook page.

While a growing number of IR/PR execs are eager to capitalize on social platforms to get their message out, traditional PR channels have not lost their luster.

Take Spectrum Brands Holdings, a diversified consumer products company whose brands are sold by the world’s top 25 retailers and are available in more than one million stores in approximately 160 countries.

David Prichard, VP of IR and Corporate Communications, said he prefers traditional channels to inform the company’s IR/PR strategy, such as highly targeted telephone calls, face-to-face meetings with analysts and key influencers and road shows catering to money centers in the U.S., Canada and Europe.

“You can’t replace face-to-face meetings. And with technology and video conferencing, it’s a lot easier to meet with potential investors and money managers who are interested in your story,” Prichard said. “We’re not afraid of social media, and we monitor it closely, but we’re just not getting requests at all for it” from financial analysts or portfolio managers.

No doubt, the appetite for financial information distributed via social platforms is still emerging. A recent National Investor Relations Institute study found that 297 out of 369 IR execs, or 80 percent, use social media for their work; the results are consistent since NIRI first began to track social channels for IR use in 2010.

The survey found that about half of the IR respondents indicated no interest in social media interactions/engagement with their IR departments from buy-side investors (49 percent) or the sell-side community (51 percent).

There’s been also been a push to get corporate CEOs to become more active on social media and begin to leverage the networking power of, say, Twitter. A recent Domo/ study found that only 39 percent of Fortune 500 CEOs now have a social media presence compared with just 32 percent in 2014. At the same time, only 10 percent of these CEOs have Twitter accounts, and among those who do, only 60 percent are active. So, there’s obviously no stampede to follow in the footsteps of Tesla’s Elon Musk, who has blazed new paths in disclosure through Twitter.

There’s no doubt that leveraging social media channels enhances an IR professional’s ability to communicate more quickly and more broadly to the stakeholder audience. But, at the end of day, it remains true since 1969 and before that nothing replaces personal interaction.

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Richard L. Anderson is Senior Managing Director at Feintuch Communications.