When used appropriately, social media can be an important communication channel for every business, and small caps are no exception.
We find that only a handful of our clients are still resistant to using social media; most conversations are centred around which platforms they should be on and how they could be better using them.
While there are no real hard and fast rules when it comes to using social media for business, listed companies do need to mind the ASX’s continuous disclosure rules regarding social media. Companies that are particularly risk-adverse should get familiar with laws around publishing and defamation, because many of these carry over to social media (especially Facebook).
In this Australian Financial Review report examining the sometime murky waters of business marketing prompted by a Creso share issue in February, senior journalist Jemima Whyte writes:
“Increasingly, particularly in the world of micro-cap trading, social media is as important – if not more so – than online trading forums such as HotCopper”.
A slew of research (some old, some new) backs White’s statement, showing that social media and its interplay with content publishing is one of, if not the most, powerful ways for a small cap company to amplify messages and influence all types of investors.
In 2015, Greenwich Associates reported the findings of 256 interviews with institutional investors about their social media use, revealing that nearly one-third of those investors confirmed that the information they had consumed through social media had, in fact, impacted their investment decision process.
In January 2017, Victoria University lecturer Maria Prokofieva released outcomes from studying 3,516 ASX releases published 2008 – 2013, finding that corporate information sent out on Twitter attracted greater investor attention and can unintentionally influence investor decision-making. While the world’s view of Twitter has rapidly changed since Prokofieva’s study period, her findings still make a strong argument for the broad role of social media in investor relations.
The whys and hows of your own use of social media as a small or microcap should be considered as part of a broader communication strategy, which in turn should be governed by your business strategy.
We’re going to explore the pros and cons of the most popular social platforms in our next article in this series on social media for small and micro cap companies.
About Ilona Marchetta - PR and digital account lead
Ilona has more than 15 years’ experience in communications, spanning journalism, public relations, copywriting and digital marketing.
She has worked across the listed company, government, private and not-for-profit sectors.
Ilona is passionate about working with entrepreneurs and developing compelling brand stories across content platforms. She's experienced at working with influencers, handling the commercial aspects of content and giving guidance on brands can increase their digital ‘currency’.
About IR Department
Established in 2007, Investor Relations Department Pty Ltd (IR Department) is an independent corporate and financial communications agency, known for delivering outstanding results for clients.
Our experienced consultants understand the importance of matching business objectives with communications campaigns. We translate complex data and messaging into understandable investor communications that form the backbone of successful investor engagement strategies, and support appropriate valuations.
We provide expert consulting services across the areas of investor relations, public relations, marketing and communications. We like to do what we say we’re going to do – delivering to brief and reporting to clients as we go, so our clients aren’t left guessing about what we’re doing, and they can measure our collective success along the way.