To date, interest in leveraging social channels by IR has been constrained by the perceived risks of violating the disclosure process regulated by the SEC.

Although reservations regarding how to leverage these various digital mediums in a regulated environment are justified there are simple procedures which can mitigate the associated risks when implemented properly.

Challenge #1: Need for clear corporate guidance on the use of social media
Solution: Create a Social Media Policy

Challenge #2: Need for supporting infrastructure to implement social media
Solution: Determine your objectives and gather the infrastructure and capabilities needed to achieve them.

Challenge #3: Need to understand the added value social media brings.
Solution: Establish agreed upon KPIs and baseline prior to initiating a campaign. (note: some of these will be qualitative as well as quantitative and merely being a part of the conversation has intrinsic value).

The above video won widespread applause, including writeups from David Blackwell in the Financial Times as well as on IR Web Report where Dominic Jones noted that “the unedited nature of the video stream, along with Tucker’s easy-going demeanor and product demonstrations added a rare authenticity and credibility to the company’s story”^[1].

He contrasted it with the overpolished nature of the quarterly video Q&As done by many large-cap companies “which are usually carefully scripted and edited and reveal little passion or excitement by executives for their companies”.

The Effect of Using Video Versus Text as a Disclosure Venue

“The degree to which a communication venue conveys the physical presence of its users reflects its “social presence.” (Short et al. 1976). Communication venues high in social presence, such as video (Christie 1973), facilitate the communication of information regarding users’ characteristics and intentions via both visual and auditory cues.”

Key Executive Interview: Brian Gladdent, CFO of Dell

“Consequently, videos attract viewers’ attention, engage them, and elicit affect (Short et al. 1976). Affect exerts significant influence on information processing and judgment (see Clore and Storbeck 2006 for a review).” ^[2]

The use of video for IR is gaining wide spread acceptance and adoption due to:

References

1. ^ Jones, Dominic. “Investors applaud CEO’s “live TV” webcast.” IRWebReport. Dominic Jones, 30 JAN 2011. Web. 15 Jul 2011. http://irwebreport.com/20110130/investors-applaud-ceos-live-tv-webcast.
2. ^ Elliott, W. Brooke, Hodge, Frank D. and Sedor, Lisa M., Using Online Video to Announce a Restatement: Influences on Investor Trust and Investment Decisions (July 14, 2010). Available at SSRN: http://ssrn.com/abstract=1467856. (accessed August 20, 2010).