A few weeks ago my firm published a social media audit of FTSE 100 firms. Seventy-two per cent of respondents said it was "very or slightly likely" that companies will increasingly turn to social media to report financial results.
The research found that currently only half are using Twitter to communicate financial results and of those a large percentage have little consistency in the way they address it. If these findings are true, we are going to see the arrival of a band of digital corporate pioneers intent on trialling a new suite of social media products that, if successful, will quickly become standard practice for all those involved in financial comms.
This provides huge opportunities for us as well as challenges for financial regulators. When it comes to launching consumer products, big corporates understand social media. The way Tesco Bank announced the launch of its current account was masterful. Tesco has created bespoke lists of target contacts in advance of each announcement. That enabled Chancellor George Osborne to immediately tweet to his 67,000 followers: "Good to see @Tesco entering current account market. More choice is best way to deliver a banking sector that works for customers."
We have seen billionaire investor Carl Icahn’s tweet add $17bn to Apple’s share price following a meeting with its CEO Tim Cook and a hacked Associated Press tweet falsely claiming the White House had been bombed wipe 150 points off the Dow Jones Industrial Average. However, we are yet to see the full armoury of social media deployed in financial comms. Who needs a proxy adviser when you can tweet stakeholders directly?
Tweeting is going to be a powerful tool. The 140 character limit on tweets may impose restrictions on what can be said, but it is still sufficient to release information that has real value to stakeholders. Twitter itself used its own platform to communicate throughout the IPO process.
For many companies, a financial results day is the time they are discussed most. If companies are to influence these conversations then they need to increase their share of voice – across all media platforms. Some companies are already doing it; British Land is now tweeting throughout analyst presentations, Standard Chartered uses infographics well. That is all very well when it comes to sharing good news, but what if the news is unremittingly bad, like we are seeing at RSA, the FTSE 100 insurance group? If we get used to social media just being outlets for good news, they will lose their effectiveness as comms media.
We will hopefully see a lot of experimentation this year – it will be a shame if we don’t. JP Morgan had a PR nightmare when the #AskJPM hashtag it designated for its Twitter question and answer session was ambushed by pressure groups and customers.
It will be fascinating to see how regulators keep pace with this change as the application of social media is exploited. We have seen how social media have challenged libel laws and they will do the same with the release and flow of financial information.
John Waples is senior MD and UK head of strategic comms at FTI Consulting