When it comes to social media for IR, the jury’s been out for a while. Research by NIRI last year shows the majority of IROs (72 percent) do not use social media for work – a number that the world’s largest IR institute says has remained consistent since it began looking into social media for IR in 2010.
But KCSA says that for small and micro-caps at least, companies are missing a trick if they’re not using social media to get their story out there. And what it’s about is thinking creatively, according to Todd Fromer, partner at the strategic communications firm.
‘We know what [small-cap] companies need to disclose and we try our best to make them disclose it in a way that is clever and holistic,’ he says. ‘But it has to go beyond that now because these firms are competing for capital with thousands of other companies and, in order for them to do that, they have to have some awareness above and beyond traditional investor programs.’
One example fellow partner Jeffrey Goldberger offers is that of clinical life science companies. One issue these firms deal with is the gap between one news item and the next, he says. They have operational update calls every quarter and talk about what’s been going on at the clinic and they can live-tweet from conferences – but outside of that there can very easily be a news void. What Goldberger advises firms to do is get in on the discussion around their work.
‘We have a company that is in gene editing where there is a tremendous amount being written in the cancer space,’ he explains. ‘Some of it good, some of it bad but this firm has been getting in on the discussion: about the gene-editing perspective, about the cost perspective – because a lot of the treatments for cancer are astronomical – it is doing bylined articles to talk about industry trends.’
All this helps firms to fill the void and gives them content to push through social media channels, though that doesn’t have to be an IR-only effort, of course.
Small companies should also be taking advantage of the social media connections they can make with their larger peers, adds Fromer. ‘They should be posting their milestone information and attaching their hashtags to other companies that are leaders in the industry,’ he says. ‘There is absolutely nothing wrong with doing it and it gives all of these Wall Street traders some insight into who you are.’
He likens the effect, for some companies, to ‘a debutant coming out for the first time’. ‘We had this one little company getting hundreds of followers in the first 60 days of its program, just because it was attaching the hashtag in some of its news to four or five of the largest players in its industry that it does business with.’
The level of detail analysts are often looking for ‘puts a tremendous onus on a small company to communicate a lot of information clearly and often,’ continues Fromer, but getting yourself into trade magazines and having an opinion that can get you a byline offers an extra level of endorsement, while mixing that content with your flow of press releases and quarterly statements not only catches more eyes, but also helps to answer questions about your company.
In fact, Fromer says if a small cap on a lean budget is able to go just a little beyond the minimum on IR, ‘investing in doing more and more press releases is not the optimal approach. I would rather see it reaching out to the trade publications in its industry and getting that third-party validation and endorsement of its business.’
